Assortment Optimization Under the Mallows model

A common problem that arises in many applications in practice is to determine the subset (or 3 assortment) of items to offer to a user. We focus on the concrete setting in which a retailer must 4 decide the subset of products to offer to each arriving customer (either online or in a brick-and-mortar 5 store). The retailer chooses the subset from a large universe U of products with the objective of 6 maximizing either the expected revenue/profit1 earned from each customer. Determing the best 7 offer set requires: (a) a demand model and (b) a set optimizer. The demand model specifies the 8 expected revenue from each offer set, and the set optimizer finds (an approximation of) the revenue 9 maximzing subset. 10