Assortment optimization under the multinomial logit choice model with product-specific capacities

We consider assortment optimization with product-specific capacities under the multinomial logit (MNL) choice model, wherein each product has a finite capacity, i.e., a limited number of units for sale. The number of customers served by each product is the smaller of its demand and capacity. We assu...

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Vydáno v:Operations research letters Ročník 59; s. 107238
Hlavní autoři: Huh, Woonghee Tim, Liu, Siyue
Médium: Journal Article
Jazyk:angličtina
Vydáno: Elsevier B.V 01.03.2025
Témata:
Assortment optimization
Fully polynomial-time approximation scheme (FPTAS)
Product-specific capacities
Fully polynomial-time approximation scheme (FPTAS)
Assortment optimization
Product-specific capacities
ISSN:0167-6377
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Shrnutí:We consider assortment optimization with product-specific capacities under the multinomial logit (MNL) choice model, wherein each product has a finite capacity, i.e., a limited number of units for sale. The number of customers served by each product is the smaller of its demand and capacity. We assume the demand of each product is deterministic as a function of the assortment offered. We show that this assortment optimization problem is NP-hard. We devise a 1/2-approximation algorithm and a fully polynomial-time approximation scheme (FPTAS) by exploiting its connection to a series of knapsack problems.
ISSN:0167-6377
DOI:10.1016/j.orl.2024.107238