Journal
MANAGEMENT SCIENCE
Volume 52, Issue 3, Pages 435-447Publisher
INFORMS
DOI: 10.1287/mnsc.1050.0461
Keywords
integer programming; combinatorial optimization; product design; marketing; conjoint analysis; optimization
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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.
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