Markdown Optimization via Approximate Dynamic Programming

Markdown Optimization via Approximate Dynamic Programming

We consider the markdown optimization problem faced by the leading apparel retail chain. Because of substitution among products the markdown policy of one product affects the sales of other products. Therefore, markdown policies for product groups having a significant crossprice elasticity among eac...

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Bibliographic Details
Main Authors: Özlem Coşgun, Ufuk Kula, Cengiz Kahraman
Format: Article
Language:English
Published: Atlantis Press 2013-02-01
Series:International Journal of Computational Intelligence Systems
Subjects:
Approximate Dynamic Programming
Multinomial logit model
Cross-price elasticity
Markdown optimization
Pricing
Online Access:https://www.atlantis-press.com/article/25868369.pdf
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spelling doaj-bdec3449725547498c377235679fb69b2020-11-25T02:20:13ZengAtlantis PressInternational Journal of Computational Intelligence Systems 1875-68832013-02-016110.1080/18756891.2013.754181Markdown Optimization via Approximate Dynamic ProgrammingÖzlem CoşgunUfuk KulaCengiz KahramanWe consider the markdown optimization problem faced by the leading apparel retail chain. Because of substitution among products the markdown policy of one product affects the sales of other products. Therefore, markdown policies for product groups having a significant crossprice elasticity among each other should be jointly determined. Since the state space of the problem is very huge, we use Approximate Dynamic Programming. Finally, we provide insights on the behavior of how each product price affects the markdown policy.https://www.atlantis-press.com/article/25868369.pdfApproximate Dynamic ProgrammingMultinomial logit modelCross-price elasticityMarkdown optimizationPricing
collection DOAJ
language English
format Article
sources DOAJ
author Özlem Coşgun
Ufuk Kula
Cengiz Kahraman
spellingShingle Özlem Coşgun
Ufuk Kula
Cengiz Kahraman
Markdown Optimization via Approximate Dynamic Programming
International Journal of Computational Intelligence Systems
Approximate Dynamic Programming
Multinomial logit model
Cross-price elasticity
Markdown optimization
Pricing
author_facet Özlem Coşgun
Ufuk Kula
Cengiz Kahraman
author_sort Özlem Coşgun
title Markdown Optimization via Approximate Dynamic Programming
title_short Markdown Optimization via Approximate Dynamic Programming
title_full Markdown Optimization via Approximate Dynamic Programming
title_fullStr Markdown Optimization via Approximate Dynamic Programming
title_full_unstemmed Markdown Optimization via Approximate Dynamic Programming
title_sort markdown optimization via approximate dynamic programming
publisher Atlantis Press
series International Journal of Computational Intelligence Systems
issn 1875-6883
publishDate 2013-02-01
description We consider the markdown optimization problem faced by the leading apparel retail chain. Because of substitution among products the markdown policy of one product affects the sales of other products. Therefore, markdown policies for product groups having a significant crossprice elasticity among each other should be jointly determined. Since the state space of the problem is very huge, we use Approximate Dynamic Programming. Finally, we provide insights on the behavior of how each product price affects the markdown policy.
topic Approximate Dynamic Programming
Multinomial logit model
Cross-price elasticity
Markdown optimization
Pricing
url https://www.atlantis-press.com/article/25868369.pdf
work_keys_str_mv AT ozlemcosgun markdownoptimizationviaapproximatedynamicprogramming
AT ufukkula markdownoptimizationviaapproximatedynamicprogramming
AT cengizkahraman markdownoptimizationviaapproximatedynamicprogramming
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