Conjoint Optimization: An Exact Branch-and-Bound Algorithm for the Share-of-Choice Problem

Jeffrey D. Camm (), James J. Cochran (), David J. Curry () and Sriram Kannan ()
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Jeffrey D. Camm: Department of Quantitative Analysis and Operations Management, University of Cincinnati, Cincinnati, Ohio 45221
James J. Cochran: Department of Marketing and Analysis, Louisiana Tech University, Ruston, Louisiana 71272
David J. Curry: Department of Marketing, University of Cincinnati, Cincinnati, Ohio 45221
Sriram Kannan: Sabre Travel Technologies, Bangalore, India

Management Science, 2006, vol. 52, issue 3, 435-447

Abstract: Conjoint analysis is a statistical technique used to elicit partworth utilities for product attributes from consumers to aid in the evaluation of market potential for new products. The objective of the share-of-choice problem (a common approach to new product design) is to find the design that maximizes the number of respondents for whom the new product's utility exceeds a specific hurdle (reservation utility). We present an exact branch-and-bound algorithm to solve the share-of-choice problem. Our empirical results, based on several large commercial data sets and simulated data from a controlled experiment, suggest that the approach is useful for finding provably optimal solutions to realistically sized problems, including cases where partworths contain estimation error.

Keywords: integer programming; combinatorial optimization; product design; marketing; conjoint analysis; optimization (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (23)

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