Item Selection By “ Hub - Authority ” Profit

A fundamental problem in business and other applications is ranking items with respect to some notion of profit based on historical transactions. The difficulty is that the profit of one item not only comes from its own sales, but also from its influence on the sales of other items, that is, the “cross-selling effect”. In this thesis, we draw an analogy between this influence and the mutual reinforcement of hub/authority web pages, and we present a novel approach to the item-ranking problem based on this analogy. The idea is ranking items by profit in a way similar to ranking web pages by authority, while taking into account the cross-selling effect. We also address several issues unique to the item ranking. This ranking approach can be applied to solve two selection problems. In the sizeconstrained selection, the maximum number of items that can be selected is fixed. In the cost-constrained selection, there is no maximum number of items to be selected, but there is some cost associated with the selection of each item. In both cases, the question is what items should be selected to maximize the profit. An empirical study shows that our approach finds profitable items in the presence of cross-selling effect.