Approximate Resolution of Stochastic Choice-Based Discrete Planning

Abstract

Stochastic choice-based discrete planning is a broad class of decision-making problems characterized by a sequential decision-making process involving a planner and a group of customers. The firm or planner first decides a subset of options to offer to the customers who, in turn, make selections based on their utilities of those options. This problem has extensive applications in many areas, including assortment planning, product line design, and facility location. A key feature of these problems is that the firm cannot fully observe the customers’ utilities or preferences, which results from intrinsic and idiosyncratic uncertainties. Most works in the literature have studied a specific type..