The Approximability of Assortment Optimization Under Ranking Preferences

Abstract

The main contribution of this paper is to provide best-possible approximability bounds for assortment planning under a general choice model, where customer choices are modeled through an arbitrary distribution over ranked lists of their preferred products. From a technical perspective, we show how to relate this model to the computational task of detecting large independent sets in graphs, allowing us to argue that general ranking preferences are extremely hard to approximate with respect to various problem parameters. These findings are complemented by a number of approximation algorithms that attain essentially best-possible factors, proving that our hardness results are tight up to lower-order terms.