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research article

Assortment optimization using an attraction model in an omnichannel environment

Vasilyev, Andrey  
•
Maier, Sebastian  
•
Seifert, Ralf W.  
2023
European Journal Of Operational Research

Making assortment decisions is becoming an increasingly difficult task for many retailers worldwide as they implement omnichannel initiatives. Discrete choice modeling lies at the core of this challenge, yet existing models do not sufficiently account for the complex shopping behavior of customers in an om-nichannel environment. In this paper, we introduce a discrete choice model called the multichannel at-traction model (MAM). A key feature of the MAM is that it specifically accounts for both the product substitution behavior of customers within each channel and the switching behavior between channels. We formulate the corresponding assortment optimization problem as a mixed integer linear program and provide a computationally efficient heuristic method that can be readily used for obtaining high-quality solutions in large-scale omnichannel environments. We also present three different methods to estimate the MAM parameters based on aggregate sales transaction data. Finally, we describe general effects of the implementation of widely-used omnichannel initiatives on the MAM parameters, and carry out nu-merical experiments to explore the structure of optimal assortments, thereby gaining new insights into omnichannel assortment optimization. Our work provides the analytical framework for future studies to assess the impact of different omnichannel initiatives. (c) 2022 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license ( http://creativecommons.org/licenses/by/4.0/ )

  • Details
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Type
research article
DOI
10.1016/j.ejor.2022.08.002
Web of Science ID

WOS:000903755100013

Author(s)
Vasilyev, Andrey  
Maier, Sebastian  
Seifert, Ralf W.  
Date Issued

2023

Published in
European Journal Of Operational Research
Volume

306

Issue

1

Start page

207

End page

226

Subjects

Management

•

Operations Research & Management Science

•

Business & Economics

•

retailing

•

omnichannel

•

assortment optimization

•

discrete choice modeling

•

multinomial logit model

•

implementation

•

channel

•

demand

Editorial or Peer reviewed

REVIEWED

Written at

EPFL

EPFL units
TOM  
TOM  
Available on Infoscience
January 30, 2023
Use this identifier to reference this record
https://infoscience.epfl.ch/handle/20.500.14299/194423
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