Imperial College London
Alternate

Professor Kalyan Talluri

Business School

Professor of Analytics and Operations
 
 
 
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Contact

 

kalyan.talluri Website CV

 
 
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Location

 

387ABusiness School BuildingSouth Kensington Campus

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Summary

 

Publications

Citation

BibTex format

@article{Strauss:2017:10.1111/poms.12685,
author = {Strauss, AK and Talluri, K},
doi = {10.1111/poms.12685},
journal = {Production and Operations Management},
pages = {1359--1368},
title = {Tractable consideration set structures for assortment optimization and network revenue management},
url = {http://dx.doi.org/10.1111/poms.12685},
volume = {26},
year = {2017}
}
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RIS format (EndNote, RefMan)

TY  - JOUR
AB  - Discrete-choice models are widely used to model consumer purchase behavior in assortment optimization and revenue management. In many applications, each customer segment is associated with a consideration set that represents the set of products that customers in this segment consider for purchase. The firm has to make a decision on what assortment to offer at each point in time without the ability to identify the customer's segment. A linear program called the Choice-based Deterministic Linear Program (CDLP) has been proposed to determine these offer sets. Unfortunately, its size grows exponentially in the number of products and it is NP-hard to solve when the consideration sets of the segments overlap. The Segment-based Deterministic Concave Program with some additional consistency equalities (SDCP+) is an approximation of CDLP that provides an upper bound on CDLP's optimal objective value. SDCP+ can be solved in a fraction of the time required to solve CDLP and often achieves the same optimal objective value. This raises the question under what conditions can one guarantee equivalence of CDLP and SDCP+. In this study, we obtain a structural result to this end, namely that if the segment consideration sets overlap with a certain tree structure or if they are fully nested, CDLP can be equivalently replaced with SDCP+. We give a number of examples from the literature where this tree structure arises naturally in modeling customer behavior.
AU  - Strauss,AK
AU  - Talluri,K
DO  - 10.1111/poms.12685
EP  - 1368
PY  - 2017///
SN  - 1059-1478
SP  - 1359
TI  - Tractable consideration set structures for assortment optimization and network revenue management
T2  - Production and Operations Management
UR  - http://dx.doi.org/10.1111/poms.12685
UR  - http://hdl.handle.net/10044/1/52506
VL  - 26
ER  -
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