Optimizing Customer Assignments to Direct Marketing Activities: A Binary Linear Programming Formulation

Bigler, Tamara; Baumann, Philipp; Kammermann, Manuel (16 December 2019). Optimizing Customer Assignments to Direct Marketing Activities: A Binary Linear Programming Formulation. In: IEEE International Conference on Industrial Engineering and Engineering Management (IEEM). Macau. 15.-18.12.2019.

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Direct marketing has become a fundamental advertising method in many industries. In direct marketing, companies target specific customers with personalized product offers. By optimally assigning customers to direct marketing activities, the effectiveness of direct marketing campaigns can be greatly increased. In this paper, we study a real-world customer assignment problem of a leading telecommunications provider in Switzerland. The planning problem contains many business and customer-specific constraints that have not yet been covered in the literature. We propose a binary linear programming formulation that solves instances involving up to one million customers and over 100 direct marketing activities to optimality in short running time. The novel formulation delivers substantially better solutions in terms of expected profit than the current practice at the company.
Keywords—Direct marketing, customer assignment, realworld
problem, binary linear programming

Item Type:

Conference or Workshop Item (Paper)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Financial Management > Professorship for Quantitative Methods in Business Administration

UniBE Contributor:

Bigler, Tamara; Baumann, Philipp and Kammermann, Manuel Stanley

Subjects:

600 Technology > 650 Management & public relations

Series:

Proceedings of the 2019 IEEM International Conference on Industrial Engineering and Engineering Management

Language:

English

Submitter:

Juliana Kathrin Zurbrügg

Date Deposited:

21 Jan 2020 11:28

Last Modified:

21 Jan 2020 11:28

BORIS DOI:

10.7892/boris.138865

URI:

https://boris.unibe.ch/id/eprint/138865

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