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Algorithmica

, Volume 60, Issue 4, pp 1004–1016 | Cite as

Algorithms for Marketing-Mix Optimization

  • Joachim Gudmundsson
  • Pat Morin
  • Michiel Smid
Article
  • 389 Downloads

Abstract

Algorithms for determining quality/cost/price tradeoffs in saturated markets are considered. A product is modeled by d real-valued qualities whose sum determines the unit cost of producing the product. This leads to the following optimization problem: given a set of n customers, each of whom has certain minimum quality requirements and a maximum price they are willing to pay, design a new product and select a price for that product in order to maximize the resulting profit.

An O(nlog n) time algorithm is given for the case, d=1, of products having a single quality, and O(n(log n)d+1) time approximation algorithms are given for products with any constant number, d, of qualities. To achieve the latter result, an O(nk d−1) bound on the complexity of an arrangement of homothetic simplices in ℝ d is given, where k is the maximum number of simplices that all contain a single points.

Keywords

Algorithms Computational geometry Marketing Market-mix 

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.National ICT Australia, School of IT Building, J12University of SydneySydneyAustralia
  2. 2.School of Computer ScienceCarleton UniversityOttawaCanada

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