COMBINING TABU SEARCH AND GENETIC ALGORITHMS TO SOLVE THE DIRECT MARKETING PROBLEM CONSIDERING CANNIBALISM BETWEEN PRODUCTS

Abstract

This paper deals with the problem of the selection of a set of clients that will receive an offer for one or more products during a promotion campaign. Such campaigns are fundamental marketing tools for improving the economic profit of a firm, either by acquiring new customers or by generating additional revenue from existing customers. We work with a well-known mathematical model for the problem. We add the cannibalism constraint to the problem, which avoids some products to be offered simultaneously, to simulate competing products cannibalizing each other’s market. We propose a hybrid heuristic, the first by combining a Genetic Algorithm (GA) with Tabu Search (TS). Extensive computational experiments were performed on a set of test problems from literature with and without the cannibalism constraint. We compare our method with a TS and a Matheuristic from literature. The hybrid method outperforms the competing methods in all test cases and all sizes of instances.