Optimization of sales promotion for existing customers

Abstract

Sales promotions to individual customers are often carried out by, for example, sending direct mail, transmitting E-mail and calling. The purpose of this study is to model such sales promotions for individual customers into knapsack problem, and proposing a metaheuristics algorithm for the problem. If probabilities of the customer's purchase are known, the method of this study is able to determine targets, goods and channels that maximize the expected value of profit while considering the budget and the risk.