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Abstract: In the rapidly evolving retail landscape, assortment planning is crucial for business success. With the rise of sponsored products and their growing prominence in online marketplaces, retailers face new challenges in effectively managing their product assortment.
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Research Background: Previous research in assortment planning largely overlooks the existence of sponsored products and their potential impact on overall recommendation effectiveness, commonly simplifying the assumption that all products are either organic or non-sponsored. This research gap highlights the need for a more thorough investigation of the assortment planning challenge in the presence of sponsored products.
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Problem Definition: We formulate the assortment planning problem with sponsored products as a combinatorial optimization task. The ultimate objective is to compute an assortment plan that optimizes expected revenue while considering the specific requirements for strategically placing sponsored products.
Blogger's Review: This article delves into the impact of sponsored products on assortment planning in the retail sector, proposing a combinatorial optimization approach that holds significant theoretical and practical implications. It would be interesting to see more real-world applications stemming from this research.