Fuzzy stochastic dynamic programming for marketing decision support

One of the most important goals in marketing is to realize the highest prof it by applying appropriate means to optimize the process of acquiring custo mers. To assist the marketer in making marketing decisions, this paper intr oduces a stochastic dynamic programming model for the process of acquiring customers. It is actually a stochastic multistage decision process, whose s tate space consists of granularized information on customers and whose tran sitions are controlled by marketing actions. Then it shows how to control t his process using fuzzy constraints and how to characterize the goal of max imizing profit by a fuzzy set. After an overview of approaches in dynamic p rogramming under fuzziness given by Bellman and Zadeh, this paper further p resents a new model of fuzzy stochastic dynamic programming to solve the de cision problem for a stochastic system with implicitly defined termination time. It is argued that this study can facilitate research and development of both financial engineering and e-commerce. (C) 2000 John Wiley & Sons, I nc.