{"title":"A predict-and-optimize approach to profit-driven churn prevention","authors":"Nuria Gómez-Vargas, Sebastián Maldonado, Carla Vairetti","doi":"10.1016/j.ejor.2025.02.008","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.02.008","url":null,"abstract":"In this paper, we introduce a novel, profit-driven classification approach for churn prevention by framing the task of targeting customers for a retention campaign as a regret minimization problem within a predict-and-optimize framework. This is the first churn prevention model to utilize this approach. Our main objective is to leverage individual customer lifetime values (CLVs) to ensure that only the most valuable customers are targeted. In contrast, many profit-driven strategies focus on churn probabilities while considering average CLVs, often resulting in significant information loss due to data aggregation. Our proposed model aligns with the principles of the predict-and-optimize framework and can be efficiently solved using stochastic gradient descent methods. Results from 13 churn prediction datasets, sourced from an investment company, underscore the effectiveness of our approach, which achieves the highest average performance in terms of profit compared to other well-established strategies.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"129 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143443485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
F. Carrabs, R. Cerulli, R. Mansini, D. Serra, C. Sorgente
{"title":"Hybridizing Carousel Greedy and Kernel Search: A new approach for the maximum flow problem with conflict constraints","authors":"F. Carrabs, R. Cerulli, R. Mansini, D. Serra, C. Sorgente","doi":"10.1016/j.ejor.2025.02.006","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.02.006","url":null,"abstract":"This work addresses a variant of the maximum flow problem where specific pairs of arcs are not allowed to carry positive flow simultaneously. Such restrictions are known in the literature as <ce:italic>negative disjunctive constraints</ce:italic> or <ce:italic>conflict constraints</ce:italic>. The problem is known to be strongly NP-hard and several exact approaches have been proposed in the literature. In this paper, we present a heuristic algorithm for the problem, based on two different approaches: Carousel Greedy and Kernel Search. These two approaches are merged to obtain a fast and effective matheuristic, named Kernousel. In particular, the computational results reveal that exploiting the information gathered by the Carousel Greedy to build the set of most promising variables (the <ce:italic>kernel set</ce:italic>), makes the Kernel Search more effective. To validate the performance of the new hybrid method, we compare it with the two components running individually. Results are also evaluated against the best-known solutions available in the literature for the problem. The new hybrid method provides 15 new best-known values on benchmark instances.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"85 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143443567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Multi-drone rescue search in a large network","authors":"Victor Gonzalez, Patrick Jaillet","doi":"10.1016/j.ejor.2025.02.003","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.02.003","url":null,"abstract":"Natural disasters are recurring emergencies that can result in numerous deaths and injuries. When a natural disaster occurs, rescue teams can be sent to help affected survivors, but deploying them efficiently is a challenge. Rescuers not knowing where affected survivors are located poses a significant challenge in delivering aid. With the development of new technologies, there are new possibilities to reduce this uncertainty, alleviating this challenge. One can first send out automated drones to locate affected survivors and then send rescue teams to their locations. We develop a model for the search process and construct mathematical methods to construct efficient search routes. We utilize a divide and conquer technique to determine the routes that are most likely to yield an efficient search. We combine this with our mathematical methods to construct efficient search routes in real-time and a method to update these routes in real-time as drones gather information.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"21 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143477826","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Last mile delivery routing problem with some-day option","authors":"Stefan Voigt, Markus Frank, Heinrich Kuhn","doi":"10.1016/j.ejor.2025.02.001","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.02.001","url":null,"abstract":"E-commerce retailers are challenged to maintain cost-efficiency and customer satisfaction while pursuing sustainability, especially in the last mile. In response, retailers are offering a range of delivery speeds, including same-day and instant options. Faster deliveries, while trending, often increase costs and emissions due to limited planning time and reduced consolidation opportunities in the last mile. In contrast, this paper proposes the inclusion of a slower delivery option, termed some-day. Slowing down the delivery process allows for greater shipment consolidation, achieving cost savings and environmental goals simultaneously. We introduce the dynamic and stochastic some-day delivery problem, which accounts for a latest delivery day, customer time windows, and capacity limitations within a multi-period planning framework. Our solution approach is based on addressing auxiliary prize-collecting vehicle routing problems with time windows (PCVRPTW) on a daily basis, where the prize reflects the benefit of promptly serving the customer. We develop a hybrid adaptive large neighborhood search with granular insertion operators, outperforming existing metaheuristics for PCVRPTWs. Our numerical study shows significant cost savings with only small increases in delivery times compared to an earliest policy.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"1 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143477827","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Guanxiang Yun, Qipeng P. Zheng, Lihui Bai, Eduardo L. Pasiliao
{"title":"Robust pricing for demand response under bounded rationality in residential electricity distribution","authors":"Guanxiang Yun, Qipeng P. Zheng, Lihui Bai, Eduardo L. Pasiliao","doi":"10.1016/j.ejor.2025.01.023","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.01.023","url":null,"abstract":"This paper studies residential users’ electricity consumption in response to dynamic pricing in smart grid, from the behavioral economics angle. Particularly, this research employs a novel approach, <ce:italic>i.e</ce:italic>., the boundedly rational user decision (BRUD) modeling framework, which assumes users will accept an electricity consumption schedule whose total utility is within an “acceptable bound” of his/her maximum utility. Subsequently, we study the optimistic and pessimistic/robust pricing models via bi-level optimization, where the utility company minimizes the total system cost while considering the best and worst case under BRUD, respectively. In order to solve the pricing models efficiently, we present two methods, <ce:italic>i.e</ce:italic>., the penalty method and the Lagrangian-dual method, both with the help of cutting planes. Computational results show that the proposed dynamic pricing schemes are effective in decreasing the total system cost. Furthermore, the Lagrangian-dual-based method outperforms the penalty method due to the exploitation of the special convexity structure of the problem. Finally, when compared to solutions without considering the irrationality of user behavior, solutions from the BRUD models are more efficient in reducing total system cost. Furthermore, the additional benefits gained from considering irrationality tend to grow when user’s monetary value of convenience increases.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"32 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143443568","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Steffen Elting, Jan Fabian Ehmke, Margaretha Gansterer
{"title":"Preference learning for efficient bundle selection in horizontal transport collaborations","authors":"Steffen Elting, Jan Fabian Ehmke, Margaretha Gansterer","doi":"10.1016/j.ejor.2025.02.002","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.02.002","url":null,"abstract":"To improve routing efficiency, transport service providers can enter a horizontal transport collaboration that uses a combinatorial auction to reallocate delivery orders. To find the optimal allocation, the carriers have to report bids for all possible combinations of available delivery orders. As this number grows exponentially with the number of orders to be reallocated, they are faced with an enormous computational challenge. To lift this burden, the auctioneer may offer only a limited set of order combinations. However, selecting this limited set is itself a stochastic combinatorial optimization problem known as the Bundle Selection Problem. In contrast to previous one-shot approaches to solve this problem, in this paper, a partial preference learning scheme is applied that iteratively queries carriers’ valuations, uses their responses to train preference models and then uses these fitted models to estimate valuations for new combinations of orders. This work investigates different ways to realize such a concept and analyzes their respective improvement in collaboration gains. The results indicate that the suggested algorithm can yield travel time savings of up to 20% higher than those achieved by a random benchmark and up to 10% higher than those of a literature benchmark if at least 40 query-response pairs are considered.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"31 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143477824","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"An efficient branch-and-bound algorithm for the one-to-many shortest path problem with additional disjunctive conflict constraints","authors":"Bahadır Pamuk, Temel Öncan, İ. Kuban Altınel","doi":"10.1016/j.ejor.2025.01.044","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.01.044","url":null,"abstract":"In this work we study an extension of the ordinary one-to-many shortest path problem that also considers additional disjunctive conflict relations between the arcs: an optimal shortest path tree is not allowed to include any conflicting arc pair. As is the case with many polynomially solvable combinatorial optimization problems, the addition of conflict relations makes the problem <mml:math altimg=\"si1.svg\" display=\"inline\"><mml:mi mathvariant=\"script\">NP</mml:mi></mml:math>-hard. We propose a novel branch-and-bound algorithm, which benefits from the solution of the one-to-many shortest path relaxations, an efficient primal–dual reoptimization scheme and a fast infeasibility detection procedure for pruning the branch-and-bound tree. According to the extensive computational tests it is possible to say that the novel algorithm is very efficient.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"15 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143443569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Supplier encroachment with decision biases","authors":"Xiaolong Guo, Zenghui Su, Fangkezi Zhou","doi":"10.1016/j.ejor.2025.01.043","DOIUrl":"10.1016/j.ejor.2025.01.043","url":null,"abstract":"<div><div>The retail market is being increasingly invaded by suppliers who are establishing their own direct selling channels, thanks to the rise of e-commerce and internet technology. The cost of direct sales has been identified as a crucial factor in the strategic interaction between suppliers and retailers. However, retailers often struggle to accurately assess this cost due to their decision biases. To address this issue, we propose a strategic mental model to examine how these biases impact supplier encroachment and firms’ performance outcomes. Our analysis reveals that a retailer can benefit from having an underestimation bias. Additionally, the bias of one firm can benefit the other, depending on whether it is an underestimation or overestimation bias. Interestingly, both the supplier and the retailer can earn more when they are biased compared to when neither of them is biased, resulting in a win-win scenario. However, if the supplier fails to recognize the retailer’s bias, the possibility of mutual gains is eliminated. Furthermore, when biases are present, the option of encroachment may backfire for the supplier compared to the scenario without encroachment, and the retailer may be worse off in the sequential encroachment setting compared to the simultaneous setting. Finally, we extend our model by considering imperfect substitutability between the retailer’s and supplier’s products, and the main conclusions remain robust. Our findings suggest that considering these biases alters the nature of strategic dynamics and provides new insights into supplier encroachment and information management.</div></div>","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"324 1","pages":"Pages 129-141"},"PeriodicalIF":6.0,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143443570","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Non-crossing vs. independent lead times in a lost-sales inventory system with compound Poisson demand","authors":"Søren Glud Johansen, Anders Thorstenson","doi":"10.1016/j.ejor.2025.01.042","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.01.042","url":null,"abstract":"In this paper we provide an analysis of an inventory system with compound Poisson demand and a sequential supply system, specifically focusing on non-crossing lead times. The purpose is to facilitate a comparison with order crossing caused by independent lead times. We apply a new approach for modeling exogenous, non-crossing Erlang distributed lead times. It is assumed that the inventory is controlled by continuous review and a base-stock level. Any part of a customer demand which cannot be satisfied immediately from inventory is lost. Set-up costs are negligible and the relevant cost parameters for choosing the best base stock consist of the holding cost rate and a shortage cost per unit lost. We provide a proof that the long-run average total relevant cost is a convex function of the base stock. Hence, the base stock is easy to compute and it is optimal in the case of geometrically distributed customer demand sizes. For demand sizes which are not geometric, we suggest an approximation to specify the base stock. An approximation is also suggested for the case when the lead time is only specified by its mean and standard deviation (SD). Our numerical study shows that the average cost is very sensitive to the SD. This in sharp contrast to the complete insensitivity of SD in case of geometric demand sizes and independent lead times.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"65 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143477832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The use of IoT sensor data to dynamically assess maintenance risk in service contracts","authors":"Stijn Loeys, Robert N. Boute, Katrien Antonio","doi":"10.1016/j.ejor.2025.01.041","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.01.041","url":null,"abstract":"We explore the value of using operational sensor data to improve the risk assessment of service contracts that cover all maintenance-related costs during a fixed period. An initial estimate of the contract risk is determined by predicting the maintenance costs via a gradient-boosting machine based on the machine’s and contract’s characteristics observable at the onset of the contract period. We then periodically update this risk assessment based on operational sensor data observed throughout the contract period. These sensor data reveal operational machine usage that drives the maintenance risk. We validate our approach on a portfolio of about 4,000 full-service contracts of industrial equipment and show how dynamic sensor data improves risk differentiation.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"24 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143443571","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}