Models and Heuristics for Product Line Selection

TLDR

Recent marketing literature has focused on single product design optimization. This study aims to extend product design optimization research to product line decisions. The authors formulate two problem variants, characterize them, and evaluate heuristic approaches due to the computational intractability of optimal solutions. The paper discusses applications to synthetic and real data and concludes with remarks on related problems and future application areas.

Abstract

Recently, a number of articles have appeared in the marketing literature dealing with (single) product design optimization. The present paper represents a start toward extending this research to product line decisions. We first formulate two versions of the problem and describe their various characteristics. Since finding the optimum solution is computationally prohibitive, even for modest size problems, various heuristic approaches are presented and evaluated. Applications involving synthetic and real data are discussed. The paper concludes with comments on related problems and future application areas.