Assortment Planning with Sponsored Products

Shaojie Tang, Shuzhang Cai, Jing Yuan, Kai Han

Abstract: In the rapidly evolving landscape of retail, assortment planning plays a crucial role in determining the success of a business. With the rise of sponsored products and their increasing prominence in online marketplaces, retailers face new challenges in effectively managing their product assortment in the presence of sponsored products. Remarkably, previous research in assortment planning largely overlooks the existence and impact of sponsored products. Instead, they often simplify by assuming that all products are non-sponsored, allowing any product to be freely added to or omitted from the recommendation list. This research gap highlights the need for a more comprehensive investigation into the assortment planning challenge, particularly when sponsored products are involved. We formulate the assortment planning problem in the presence of 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 of placing sponsored products strategically.

External IDs:dblp:conf/cocoon/TangCYH24