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dc.contributor.advisorDimitris Bertsimas.en_US
dc.contributor.authorMišić, Velibor Ven_US
dc.contributor.otherMassachusetts Institute of Technology. Operations Research Center.en_US
dc.date.accessioned2016-10-25T19:18:05Z
dc.date.available2016-10-25T19:18:05Z
dc.date.copyright2016en_US
dc.date.issued2016en_US
dc.identifier.urihttp://hdl.handle.net/1721.1/105003
dc.descriptionThesis: Ph. D., Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2016.en_US
dc.descriptionThis electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.en_US
dc.descriptionCataloged from student-submitted PDF version of thesis.en_US
dc.descriptionIncludes bibliographical references (pages 204-209).en_US
dc.description.abstractModern business decisions exceed human decision making ability: often, they are of a large scale, their outcomes are uncertain, and they are made in multiple stages. At the same time, firms have increasing access to data and models. Faced with such complex decisions and increasing access to data and models, how do we transform data and models into effective decisions? In this thesis, we address this question in the context of four important problems: the dynamic control of large-scale stochastic systems, the design of product lines under uncertainty, the selection of an assortment from historical transaction data and the design of a personalized assortment policy from data. In the first chapter, we propose a new solution method for a general class of Markov decision processes (MDPs) called decomposable MDPs. We propose a novel linear optimization formulation that exploits the decomposable nature of the problem data to obtain a heuristic for the true problem. We show that the formulation is theoretically stronger than alternative proposals and provide numerical evidence for its strength in multi-armed bandit problems. In the second chapter, we consider to how to make strategic product line decisions under uncertainty in the underlying choice model. We propose a method based on robust optimization for addressing both parameter uncertainty and structural uncertainty. We show using a real conjoint data set the benefits of our approach over the traditional approach that assumes both the model structure and the model parameters are known precisely. In the third chapter, we propose a new two-step method for transforming limited customer transaction data into effective assortment decisions. The approach involves estimating a ranking-based choice model by solving a large-scale linear optimization problem, and solving a mixed-integer optimization problem to obtain a decision. Using synthetic data, we show that the approach is scalable, leads to accurate predictions and effective decisions that outperform alternative parametric and non-parametric approaches. In the last chapter, we consider how to leverage auxiliary customer data to make personalized assortment decisions. We develop a simple method based on recursive partitioning that segments customers using their attributes and show that it improves on a "uniform" approach that ignores auxiliary customer information.en_US
dc.description.statementofresponsibilityby Velibor V. Mišić.en_US
dc.format.extent209 pagesen_US
dc.language.isoengen_US
dc.publisherMassachusetts Institute of Technologyen_US
dc.rightsM.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.en_US
dc.rights.urihttp://dspace.mit.edu/handle/1721.1/7582en_US
dc.subjectOperations Research Center.en_US
dc.titleData, models and decisions for large-scale stochastic optimization problemsen_US
dc.typeThesisen_US
dc.description.degreePh. D.en_US
dc.contributor.departmentMassachusetts Institute of Technology. Operations Research Center.en_US
dc.identifier.oclc960816883en_US


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