“Choice Modeling and Assortment Optimization” - Session II - Prof. Huseyin Topaloglu

This module overviews static and dynamic assortment optimization problems. We will start with an introduction to discrete choice modeling and discuss estimation issues when fitting a choice model to observed sales histories. Following this introduction, we will discuss static and dynamic assortment optimization problems when customers choose according to various choice models. In the static setting, assortment optimization problems have combinatorial nature, so we will go over exact and approximate strategies to deal with the combinatorial aspects of the problem. In the dynamic setting, we can formulate assortment optimization problems as dynamic programs, so we will discuss strategies to deal with high-dimensional state variables.
Session 2: Static assortment optimization