Technical Note—A Conic Integer Optimization Approach to the Constrained Assortment Problem Under the Mixed Multinomial Logit Model
Alper Şen, Alper Atamtürk, Philip Kaminsky
Operations Research · 2018 · Volume 66 · Issue 4
Abstract
We consider the constrained assortment optimization problem under the mixed multinomial logit model. Even moderately sized instances of this problem are challenging to solve directly using standard mixed-integer linear optimization formulations. This has motivated recent research exploring customized optimization strategies and approximation techniques. In contrast, we develop a novel conic quadratic mixed-integer formulation. This new formulation, together with McCormick inequalities exploiting the capacity constraints, enables the solution of large instances using commercial optimization software.
Keywords
assortment optimization, mixed multinomial logit, conic integer optimization
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