Constrained Assortment Optimization Problem under the Multilevel Nested Logit Model

We study the choice‐based constrained assortment optimization problem under the multilevel nested logit model with a no‐purchase option in every choice stage. For this problem, each candidate product is associated with a fixed profit. The goal is to identify the optimal assortment satisfying a cardinality constraint to maximize the expected profit per customer. There is a cardinality limitation imposed on nodes in the second lowest level. A polynomial‐time algorithm with computational complexity O( nmax{ m, k}) is provided to locate the optimal assortment for the m‐level nested logit model with n products, where k is the maximum number of products within any node in level m − 1.

• 저널Production and Operations Management · 30(10) · 3467–3480
• 토픽Supply Chain and Inventory Management · Management Information Systems
• DOI10.1111/poms.13443
• 저자Yanqiao Wang, Zuo‐Jun Max Shen