IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v261y2017i1p75-87.html
   My bibliography  Save this article

An iterated greedy heuristic for a market segmentation problem with multiple attributes

Author

Listed:
  • Huerta-Muñoz, Diana L.
  • Ríos-Mercado, Roger Z.
  • Ruiz, Rubén

Abstract

A real-world customer segmentation problem from a beverage distribution firm is addressed. The firm wants to partition a set of customers, who share geographical and marketing attributes, into segments according to certain requirements: (a) customers allocated to the same segment must have very similar attributes: type of contract, type of store and the average difference of purchase volume; and (b) compact segments are desired. The main reason for creating a partition with these features is because the firm wants to try different product marketing strategies. In this paper, a detailed attribute formulation and an iterated greedy heuristic that iteratively destroys and reconstructs a given partition are proposed. The initial partition is obtained by using a modified k-means algorithm that involves a GRASP philosophy to get the initial configuration of centers. The heuristic includes an improvement method that employs two local search procedures. Computational results and statistical analyses show the effectiveness of the proposed approach and its individual components. The proposed metaheuristic is also observed very competitive, faster, and more robust when compared to existing methods.

Suggested Citation

  • Huerta-Muñoz, Diana L. & Ríos-Mercado, Roger Z. & Ruiz, Rubén, 2017. "An iterated greedy heuristic for a market segmentation problem with multiple attributes," European Journal of Operational Research, Elsevier, vol. 261(1), pages 75-87.
    • Handle: RePEc:eee:ejores:v:261:y:2017:i:1:p:75-87
    DOI: 10.1016/j.ejor.2017.02.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221717301194
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2017.02.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ribas, Imma & Companys, Ramon & Tort-Martorell, Xavier, 2011. "An iterated greedy algorithm for the flowshop scheduling problem with blocking," Omega, Elsevier, vol. 39(3), pages 293-301, June.
    2. Lozano, M. & Molina, D. & GarcI´a-MartI´nez, C., 2011. "Iterated greedy for the maximum diversity problem," European Journal of Operational Research, Elsevier, vol. 214(1), pages 31-38, October.
    3. Urlings, Thijs & Ruiz, Rubén & Stützle, Thomas, 2010. "Shifting representation search for hybrid flexible flowline problems," European Journal of Operational Research, Elsevier, vol. 207(2), pages 1086-1095, December.
    4. Santi, Éverton & Aloise, Daniel & Blanchard, Simon J., 2016. "A model for clustering data from heterogeneous dissimilarities," European Journal of Operational Research, Elsevier, vol. 253(3), pages 659-672.
    5. Lai, Xiangjing & Hao, Jin-Kao, 2016. "Iterated maxima search for the maximally diverse grouping problem," European Journal of Operational Research, Elsevier, vol. 254(3), pages 780-800.
    6. Ruiz, Ruben & Stutzle, Thomas, 2008. "An Iterated Greedy heuristic for the sequence dependent setup times flowshop problem with makespan and weighted tardiness objectives," European Journal of Operational Research, Elsevier, vol. 187(3), pages 1143-1159, June.
    7. Fanjul-Peyro, Luis & Ruiz, Rubén, 2010. "Iterated greedy local search methods for unrelated parallel machine scheduling," European Journal of Operational Research, Elsevier, vol. 207(1), pages 55-69, November.
    8. R Caballero & M Laguna & R Martí & J Molina, 2011. "Scatter tabu search for multiobjective clustering problems," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(11), pages 2034-2046, November.
    9. R Caballero & M Laguna & R Martí & J Molina, 2011. "Scatter tabu search for multiobjective clustering problems," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(11), pages 2034-2046, November.
    10. Ying Liu & Sudha Ram & Robert F. Lusch & Michael Brusco, 2010. "Multicriterion Market Segmentation: A New Model, Implementation, and Evaluation," Marketing Science, INFORMS, vol. 29(5), pages 880-894, 09-10.
    11. Ruiz, Ruben & Stutzle, Thomas, 2007. "A simple and effective iterated greedy algorithm for the permutation flowshop scheduling problem," European Journal of Operational Research, Elsevier, vol. 177(3), pages 2033-2049, March.
    12. T. D. Klastorin, 1985. "The p-Median Problem for Cluster Analysis: A Comparative Test Using the Mixture Model Approach," Management Science, INFORMS, vol. 31(1), pages 84-95, January.
    13. Paul E. Green & Ronald E. Frank & Patrick J. Robinson, 1967. "Cluster Analysis in Test Market Selection," Management Science, INFORMS, vol. 13(8), pages 387-400, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Benedek Botond & László Ede, 2019. "Identifying Key Fraud Indicators in the Automobile Insurance Industry Using SQL Server Analysis Services," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 64(2), pages 53-71, August.
    2. Liu, Jiapeng & Liao, Xiuwu & Huang, Wei & Liao, Xianzhao, 2019. "Market segmentation: A multiple criteria approach combining preference analysis and segmentation decision," Omega, Elsevier, vol. 83(C), pages 1-13.
    3. Cavero, Sergio & Pardo, Eduardo G. & Duarte, Abraham, 2023. "Efficient iterated greedy for the two-dimensional bandwidth minimization problem," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1126-1139.
    4. Sandoval, M. Gabriela & Álvarez-Miranda, Eduardo & Pereira, Jordi & Ríos-Mercado, Roger Z. & Díaz, Juan A., 2022. "A novel districting design approach for on-time last-mile delivery: An application on an express postal company," Omega, Elsevier, vol. 113(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. García-Martínez, C. & Rodriguez, F.J. & Lozano, M., 2014. "Tabu-enhanced iterated greedy algorithm: A case study in the quadratic multiple knapsack problem," European Journal of Operational Research, Elsevier, vol. 232(3), pages 454-463.
    2. Lozano, M. & Molina, D. & GarcI´a-MartI´nez, C., 2011. "Iterated greedy for the maximum diversity problem," European Journal of Operational Research, Elsevier, vol. 214(1), pages 31-38, October.
    3. Pan, Quan-Ke & Ruiz, Rubén, 2012. "Local search methods for the flowshop scheduling problem with flowtime minimization," European Journal of Operational Research, Elsevier, vol. 222(1), pages 31-43.
    4. Hatami, Sara & Ruiz, Rubén & Andrés-Romano, Carlos, 2015. "Heuristics and metaheuristics for the distributed assembly permutation flowshop scheduling problem with sequence dependent setup times," International Journal of Production Economics, Elsevier, vol. 169(C), pages 76-88.
    5. Pan, Quan-Ke & Ruiz, Rubén, 2014. "An effective iterated greedy algorithm for the mixed no-idle permutation flowshop scheduling problem," Omega, Elsevier, vol. 44(C), pages 41-50.
    6. Vallada, Eva & Ruiz, Rubén & Framinan, Jose M., 2015. "New hard benchmark for flowshop scheduling problems minimising makespan," European Journal of Operational Research, Elsevier, vol. 240(3), pages 666-677.
    7. Ángel Corberán & Juanjo Peiró & Vicente Campos & Fred Glover & Rafael Martí, 2016. "Strategic oscillation for the capacitated hub location problem with modular links," Journal of Heuristics, Springer, vol. 22(2), pages 221-244, April.
    8. Kong, Hanzhang & Kang, Qinma & Li, Wenquan & Liu, Chao & Kang, Yunfan & He, Hong, 2019. "A hybrid iterated carousel greedy algorithm for community detection in complex networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 536(C).
    9. Pessoa, Luciana S. & Andrade, Carlos E., 2018. "Heuristics for a flowshop scheduling problem with stepwise job objective function," European Journal of Operational Research, Elsevier, vol. 266(3), pages 950-962.
    10. Marco Pranzo & Dario Pacciarelli, 2016. "An iterated greedy metaheuristic for the blocking job shop scheduling problem," Journal of Heuristics, Springer, vol. 22(4), pages 587-611, August.
    11. Pan, Quan-Ke & Gao, Liang & Li, Xin-Yu & Gao, Kai-Zhou, 2017. "Effective metaheuristics for scheduling a hybrid flowshop with sequence-dependent setup times," Applied Mathematics and Computation, Elsevier, vol. 303(C), pages 89-112.
    12. Yepes-Borrero, Juan C. & Perea, Federico & Ruiz, Rubén & Villa, Fulgencia, 2021. "Bi-objective parallel machine scheduling with additional resources during setups," European Journal of Operational Research, Elsevier, vol. 292(2), pages 443-455.
    13. Xiong, Fuli & Xing, Keyi & Wang, Feng, 2015. "Scheduling a hybrid assembly-differentiation flowshop to minimize total flow time," European Journal of Operational Research, Elsevier, vol. 240(2), pages 338-354.
    14. Pan, Quan-Ke & Ruiz, Rubén, 2012. "An estimation of distribution algorithm for lot-streaming flow shop problems with setup times," Omega, Elsevier, vol. 40(2), pages 166-180, April.
    15. Pan, Quan-Ke & Wang, Ling, 2012. "Effective heuristics for the blocking flowshop scheduling problem with makespan minimization," Omega, Elsevier, vol. 40(2), pages 218-229, April.
    16. A. D. López-Sánchez & J. Sánchez-Oro & M. Laguna, 2021. "A New Scatter Search Design for Multiobjective Combinatorial Optimization with an Application to Facility Location," INFORMS Journal on Computing, INFORMS, vol. 33(2), pages 629-642, May.
    17. Wang, Chuyang & Li, Xiaoping & Wang, Qian, 2010. "Accelerated tabu search for no-wait flowshop scheduling problem with maximum lateness criterion," European Journal of Operational Research, Elsevier, vol. 206(1), pages 64-72, October.
    18. Fanjul-Peyro, Luis & Ruiz, Rubén, 2010. "Iterated greedy local search methods for unrelated parallel machine scheduling," European Journal of Operational Research, Elsevier, vol. 207(1), pages 55-69, November.
    19. Pinacho Davidson, Pedro & Blum, Christian & Lozano, Jose A., 2018. "The weighted independent domination problem: Integer linear programming models and metaheuristic approaches," European Journal of Operational Research, Elsevier, vol. 265(3), pages 860-871.
    20. Yunhe Wang & Xiangtao Li & Zhiqiang Ma, 2017. "A Hybrid Local Search Algorithm for the Sequence Dependent Setup Times Flowshop Scheduling Problem with Makespan Criterion," Sustainability, MDPI, vol. 9(12), pages 1-35, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:261:y:2017:i:1:p:75-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.