New Bounds for Assortment Optimization Under the Nested Logit Model

Kunnumkal, S (2018) New Bounds for Assortment Optimization Under the Nested Logit Model. Working Paper. SSRN. (Unpublished)

Full text not available from this repository. (Request a copy)

Abstract

We consider the assortment optimization problem under the nested logit model and obtain new bounds on the gap between the optimal expected revenue and an upper bound based on a certain continuous relaxation of the assortment problem. Our bounds can be tighter than the existing bounds in the literature and provide more insight into the key drivers of tractability for the assortment optimization problem under the nested logit model. Moreover, our bounds scale with the nest dissimilarity parameters and we recover the well-known tractability results for the assortment optimization problem under the multinomial logit model when all the nest dissimilarity parameters are equal to one. We extend our results to the cardinality constrained assortment problem where there are constraints that limit the number of products that can be offered within each nest.

Affiliation: Indian School of Business
ISB Creators:
ISB CreatorsORCiD
Kunnumkal, Shttp://orcid.org/0000-0002-6832-0508
Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Nested Logit Model, Assortment Optimization
Subjects: Operations Management
Operations Management > Supply Chain Management
Depositing User: Veeramani R
Date Deposited: 02 Apr 2019 13:58
Last Modified: 02 Apr 2019 13:58
URI: http://eprints.exchange.isb.edu/id/eprint/734
Publisher URL: http://dx.doi.org/10.2139/ssrn.3087537
Related URLs:

Actions (login required)

View Item View Item
Statistics for DESI ePrint 734 Statistics for this ePrint Item