Huseyin Topaloglu Cornell University

School of ORIE

Jake Feldman Cornell University

School of ORIE

Upper Bounds on the Optimal Expected Revenue for Assortment

Optimization under the Mixed Multinomal Logit Choice Model

Problem Basics

Motivation

BestBuy.com – Purchasing T.V.

Modeling ChoiceTypes of ShoppersModeling Customer Choice

Modeling ChoiceTypes of ShoppersModeling Customer Choice

Types of ShoppersModeling ChoiceTypes of ShoppersModeling Customer Choice

Types of ShoppersModeling Customer Choice

Parameters of Choice Model

Mixed-Multinomial Logit Choice Model

Problem Formulation

Problem Difficulties

Background

Upper Bound Approach

Decoupling Customer Types

Decoupling Customer Types

Decoupling Customer Types

Decoupling Customer Types

Decoupling Customer Types

Remaining Difficulties

Side-Stepping Nonlinearity

Side-Stepping Nonlinearity

Side-Stepping Nonlinearity

Side-Stepping Nonlinearity

Gridding No-purchase Probability

Gridding No-purchase Probability

Maintain Upper Bound

Maintain Upper Bound

Maintain Upper Bound

Maintain Upper Bound

Full Problem

Full Problem

Full Problem

Full Problem

Computational Experiments

Computational Experiments

Results

GurobiCTDLagrangian

Results

GurobiCTDLagrangian

Results

GurobiCTDLagrangian

Summary of Results

Thank you