【公开学术报告-第154期】Product Information Display Optimization with Quality Uncertainty and Returns

Product Information Display Optimization with Quality Uncertainty and Returns

【质量不确定与退货条件下的产品信息展示优化】

Speaker: Yang Lu (USTC)

Date & Time:  Thur. 25, December 2025, from 10:00 to 11:30 AM (Beijing Time)

Location: Tongji Building A2101

ABSTRACT

Problem definition: Display quality refers to product information, such as the images and textual descriptions of product quality, presented to consumers shopping online, and can directly influence market demand during the sales phase and returns during the post-sales phase. In this paper, we investigate the optimization problem on assortment planning, display quality, and pricing, taking into account the actual quality uncertainty and consumer returns. Methodology/results: We employ the widely used multinomial logit (MNL) model to investigate the impact of display quality on consumer choices. In particular, we incorporate display quality into the utility function regarding consumers’ purchase and return behavior, which is significantly affected by display quality. We then conduct a joint optimization analysis on assortment planning, display quality, and pricing, characterize the optimal policy, and propose an efficient method for the optimal offer set that includes all the products with positive conservative adjusted keep rates. Moreover, we investigate the estimation problem and conduct a comprehensive empirical validation with real data. Our results reveal that model mis-specification and optimization on display quality could result in substantial losses. Managerial implications: Because of its high impact on both consumer choices and subsequent returns, display quality alters the structure of the optimal pricing and assortment decisions. We further demonstrate the robustness of our optimal policy in various sales scenarios, including continuous optimization, consumer reviews, alternative return modeling, heterogeneous consumer markets, and discrete optimization, under both exogenous and endogenous pricing strategies. In addition, we investigate return policy design with display quality considerations.

Keywords: Retailing; Display Quality; Product Returns; Pricing and Assortment Planning; Multinomial Logit Model