Assortment Optimization for the Multinomial Logit Model with Repeated Customer Interactions

This paper presents the multinomial logit model with repeated customer interactions. In each period, the same customer selects a product from the recommended assortment or opts out. From the seller’s perspective, the choice probability in the current period is updated based on the purchase history of the customer. We derive this conditional choice probability and study the adaptive assortment recommendation strategy. Although the problem is generally intractable, we discover the structures of the optimal assortment when the customer interacts with the seller for two periods and the available products to recommend are identical in the two periods. For a general number of periods, we find that the optimal fixed assortments that are not adapted to the purchase history can achieve 50% of the optimal expected revenue, and the approximation ratio increases to 68.47% when the available products across periods are disjoint. Using real-world data sets, we demonstrate that the model with repeated customer interactions can better predict the purchase behavior and generate higher revenues. This paper was accepted by Chung Piaw Teo, optimization. Funding: The authors gratefully acknowledge the funding support from Meituan. C. Wang’s research was supported by the National Science Foundation of China [Grants 72495133, 72172104] and China Postdoctoral Science Foundation [Grant 2025M780760]. P. Gao’s research was supported by the National Natural Science Foundation of China [Grants 72522026, 72201234, and 72192805], Collaborative Research Funding [Grant C6032-21G] of the Hong Kong Research Grants Council, and the Guangdong Provincial Key Laboratory of Mathematical Foundations for Artificial Intelligence [Grant 2023B1212010001]. Y. Wang’s research was supported by the National Natural Science Foundation of China [Grant 12371513] and the Major Program of National Fund of Philosophy and Social Science of China [Grant 23&ZD135]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.02419 .

Authors

Institutions

Publication Details

Journal
Management Science
Published
2026-08-18
DOI
https://doi.org/10.1287/mnsc.2023.02419
Primary Topic
Supply Chain and Inventory Management
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Assortment Optimization for the Multinomial Logit Model with Repeated Customer Interactions

Pin Gao, Ningyuan Chen, Yao Wang, Chenhao Wang et al.
Management Science
Supply Chain and Inventory Management
article

Assortment Optimization for the Multinomial Logit Model with Repeated Customer Interactions

Pin Gao, Ningyuan Chen, Yao Wang, Chenhao Wang, Su Zhao
article en

Abstract

This paper presents the multinomial logit model with repeated customer interactions. In each period, the same customer selects a product from the recommended assortment or opts out. From the seller’s perspective, the choice probability in the current period is updated based on the purchase history of the customer. We derive this conditional choice probability and study the adaptive assortment recommendation strategy. Although the problem is generally intractable, we discover the structures of the optimal assortment when the customer interacts with the seller for two periods and the available products to recommend are identical in the two periods. For a general number of periods, we find that the optimal fixed assortments that are not adapted to the purchase history can achieve 50% of the optimal expected revenue, and the approximation ratio increases to 68.47% when the available products across periods are disjoint. Using real-world data sets, we demonstrate that the model with repeated customer interactions can better predict the purchase behavior and generate higher revenues. This paper was accepted by Chung Piaw Teo, optimization. Funding: The authors gratefully acknowledge the funding support from Meituan. C. Wang’s research was supported by the National Science Foundation of China [Grants 72495133, 72172104] and China Postdoctoral Science Foundation [Grant 2025M780760]. P. Gao’s research was supported by the National Natural Science Foundation of China [Grants 72522026, 72201234, and 72192805], Collaborative Research Funding [Grant C6032-21G] of the Hong Kong Research Grants Council, and the Guangdong Provincial Key Laboratory of Mathematical Foundations for Artificial Intelligence [Grant 2023B1212010001]. Y. Wang’s research was supported by the National Natural Science Foundation of China [Grant 12371513] and the Major Program of National Fund of Philosophy and Social Science of China [Grant 23&ZD135]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.02419 .

Management Science
Tongji University (CN), University of Toronto (CA), Chinese University of Hong Kong, Shenzhen (CN), Xi'an Jiaotong University (CN)
Openalex Percentile: Top 5%
Supply Chain and Inventory Management
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.