Optimizing revenue while showing relevant assortments at scale

DOI10.1016/J.EJOR.2021.08.006zbMATH Open1495.62121arXiv2003.04736OpenAlexW3193326062MaRDI QIDQ2116864FDOQ2116864

Authors: Theja Tulabandhula, Deeksha Sinha, Saketh Karra 

Publication date: 18 March 2022

Published in: European Journal of Operational Research (Search for Journal in Brave)

Abstract: Scalable real-time assortment optimization has become essential in e-commerce operations due to the need for personalization and the availability of a large variety of items. While this can be done when there are simplistic assortment choices to be made, the optimization process becomes difficult when imposing constraints on the collection of relevant assortments based on insights by store-managers and historically well-performing assortments. We design fast and flexible algorithms based on variations of binary search that find the (approximately) optimal assortment in this difficult regime. In particular, we revisit the problem of large-scale assortment optimization under the multinomial logit choice model without any assumptions on the structure of the feasible assortments. We speed up the comparison steps using advances in similarity search in the field of information retrieval/machine learning. For an arbitrary collection of assortments, our algorithms can find a solution in time that is sub-linear in the number of assortments, and for the simpler case of cardinality constraints - linear in the number of items (existing methods are quadratic or worse). Empirical validations using a real world dataset (in addition to experiments using semi-synthetic data based on the Billion Prices dataset and several retail transaction datasets) show that our algorithms are competitive even when the number of items is $sim10^5$ ($10imes$ larger instances than previously studied).

Full work available at URL: https://arxiv.org/abs/2003.04736

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zbMATH Keywords

data sciencee-commercelarge-scale optimization

Mathematics Subject Classification ID

Statistical aspects of big data and data science (62R07) Large-scale problems in mathematical programming (90C06) Applications of mathematical programming (90C90)

Cites Work

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• Exact and Approximate Maximum Inner Product Search with LEMP
• Dynamic assortment optimization with a multinomial logit choice model and capacity constraint
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• Approximate nearest neighbor: towards removing the curse of dimensionality
• Exact First-Choice Product Line Optimization
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• Customer Choice Models vs. Machine Learning: Finding Optimal Product Displays on Alibaba

Cited In (3)

• Optimizing assortment and pricing of multiple retail categories with cross-selling
• A two-stage integer programming model considering transaction equivalence for privacy preservation
• Assortment optimization: a systematic literature review

Uses Software

• bayesm
• Scikit
• SPMF
• GitHub
• Eclat
• LEMP

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