I have 2 channels that I can sent my products, the A channel cost 0.10\$ per product and the B costs 0.01\$ and I am trying dynamically to optimize the channel selection by minimize the cost.
Obviously the B channel is a proper selection as the cost is lower but there is some issues with this channel. As the B channel is not a direct channel there is a probability to lose the product and we wont get paid if the customer does not get the product and as a result we lose the profit, cost of the product and the cost to ship the product though this channel.
The optimum results from my algorithm I want to be like sent 30% from your products through the A channel and 70% through the B channel and I want to change through time.
A Multi-armed Bandit Algorithm is proper to dynamically change channels over time?
If Bandit is the answer which implementation do you propose (epsilon-degree or Thompson sampling) ?
What do you suggest in order to accomplish that ?