Publication: A mixed-integer programming approach to the clustering problem with an application in customer segmentation
Program
KU Authors
Co-Authors
Sağlam, Burcu
Publication Date
Language
Type
Embargo Status
Journal Title
Journal ISSN
Volume Title
Alternative Title
Abstract
This paper presents a mathematical programming based clustering approach that is applied to a digital platform company's customer segmentation problem involving demographic and transactional attributes related to the customers. The clustering problem is formulated as a mixed-integer programming problem with the objective of minimizing the maximum cluster diameter among all clusters. In order to overcome issues related to computational complexity of the problem, we developed a heuristic approach that improves computational times dramatically without compromising from optimality in most of the cases that we tested. The performance of this approach is tested on a real problem. The analysis of our results indicates that our approach is computationally efficient and creates meaningful segmentation of data.
Source
Publisher
Elsevier
Subject
Management, Operations research, Management science
Citation
Has Part
Source
European Journal Of Operational Research
Book Series Title
Edition
DOI
10.1016/j.ejor.2005.04.048