Data-driven methods for personalized product recommendation systems
Thesis: Ph. D., Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2018.
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| Other Authors: | |
| Format: | Thesis |
| Language: | eng |
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Massachusetts Institute of Technology
2018
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| Online Access: | http://hdl.handle.net/1721.1/115655 |
| _version_ | 1826190442194010112 |
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| author | Papush, Anna |
| author2 | Georgia Perakis and Pavithra Harsha. |
| author_facet | Georgia Perakis and Pavithra Harsha. Papush, Anna |
| author_sort | Papush, Anna |
| collection | MIT |
| description | Thesis: Ph. D., Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2018. |
| first_indexed | 2024-09-23T08:40:18Z |
| format | Thesis |
| id | mit-1721.1/115655 |
| institution | Massachusetts Institute of Technology |
| language | eng |
| last_indexed | 2024-09-23T08:40:18Z |
| publishDate | 2018 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/1156552019-04-09T19:07:43Z Data-driven methods for personalized product recommendation systems Papush, Anna Georgia Perakis and Pavithra Harsha. Massachusetts Institute of Technology. Operations Research Center. Massachusetts Institute of Technology. Operations Research Center. Operations Research Center. Thesis: Ph. D., Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2018. Cataloged from PDF version of thesis. Includes bibliographical references. The online market has expanded tremendously over the past two decades across all industries ranging from retail to travel. This trend has resulted in the growing availability of information regarding consumer preferences and purchase behavior, sparking the development of increasingly more sophisticated product recommendation systems. Thus, a competitive edge in this rapidly growing sector could be worth up to millions of dollars in revenue for an online seller. Motivated by this increasingly prevalent problem, we propose an innovative model that selects, prices and recommends a personalized bundle of products to an online consumer. This model captures the trade-off between myopic profit maximization and inventory management, while selecting relevant products from consumer preferences. We develop two classes of approximation algorithms that run efficiently in real-time and provide analytical guarantees on their performance. We present practical applications through two case studies using: (i) point-of-sale transaction data from a large U.S. e-tailer, and, (ii) ticket transaction data from a premier global airline. The results demonstrate that our approaches result in significant improvements on the order of 3-7% lifts in expected revenue over current industry practices. We then extend this model to the setting in which consumer demand is subject to uncertainty. We address this challenge using dynamic learning and then improve upon it with robust optimization. We first frame our learning model as a contextual nonlinear multi-armed bandit problem and develop an approximation algorithm to solve it in real-time. We provide analytical guarantees on the asymptotic behavior of this algorithm's regret, showing that with high probability it is on the order of O([square root of] T). Our computational studies demonstrate this algorithm's tractability across various numbers of products, consumer features, and demand functions, and illustrate how it significantly out performs benchmark strategies. Given that demand estimates inherently contain error, we next consider a robust optimization approach under row-wise demand uncertainty. We define the robust counterparts under both polynomial and ellipsoidal uncertainty sets. Computational analysis shows that robust optimization is critical in highly constrained inventory settings, however the price of robustness drastically grows as a result of pricing strategies if the level of conservatism is too high. by Anna Papush. Ph. D. 2018-05-23T16:28:54Z 2018-05-23T16:28:54Z 2018 2018 Thesis http://hdl.handle.net/1721.1/115655 1036985368 eng MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission. http://dspace.mit.edu/handle/1721.1/7582 160 pages application/pdf Massachusetts Institute of Technology |
| spellingShingle | Operations Research Center. Papush, Anna Data-driven methods for personalized product recommendation systems |
| title | Data-driven methods for personalized product recommendation systems |
| title_full | Data-driven methods for personalized product recommendation systems |
| title_fullStr | Data-driven methods for personalized product recommendation systems |
| title_full_unstemmed | Data-driven methods for personalized product recommendation systems |
| title_short | Data-driven methods for personalized product recommendation systems |
| title_sort | data driven methods for personalized product recommendation systems |
| topic | Operations Research Center. |
| url | http://hdl.handle.net/1721.1/115655 |
| work_keys_str_mv | AT papushanna datadrivenmethodsforpersonalizedproductrecommendationsystems |