A branch and cut algorithm for the product assortment problem under customer choice behavior

ISABEL MÉNDEZ-DÍAZ; JUAN JOSÉ MIRANDA BRONT; GUSTAVO VULCANO; PAULA ZABALA

Bonn

Conferencia; 23rd European Conference on Operational Research; 2009

The Association of European Research Societies

We consider a revenue management problem with fixed prices and a general model of market segmentation. Consumers within each segment choose according to a multinomial logit model. The seller has to decide the optimal set of products to offer in order to maximize the instantaneous revenue rate. We formulate the problem as a MIP, and develop a branch-and-cut to solve it effectively. Our numerical experiments provide evidence of the potential of our approach.