Efficiency and Performance Guarantees for Choice-Based Network Revenue Management Problems with Flexible Products PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Efficiency and Performance Guarantees for Choice-Based Network Revenue Management Problems with Flexible Products PDF full book. Access full book title Efficiency and Performance Guarantees for Choice-Based Network Revenue Management Problems with Flexible Products by Wang Chi Cheung. Download full books in PDF and EPUB format.
Author: Wang Chi Cheung
Publisher:
ISBN:
Category :
Languages : en
Pages : 57
Get Book Here
Book Description
We consider the choice-based network revenue management problem (NRM). The LP relaxation, Choice-based Deterministic Linear Program (CDLP-P), has been proposed to mitigate the curse of dimensionality of the choice-based NRM. Despite the importance of CDLP-P, there is no polynomial time algorithm for solving CDLP-P for general choice models. Moreover, most heuristics for solving CDLP-P require solving the underlying Single Period Problem (SPP), which could be NP-hard. We propose the Potential Based algorithm (PB) that solves CDLP-P to near optimality with provable efficiency, assuming the ability to solve the underlying SPP approximately. In particular, PB implies polynomial time algorithms for approximating CDLP-P for a variety of choice models, such as Nested Logit, Mixed Logit and Markov Chain models, to near optimality.We also propose the Approximate Column Generation heuristic (ACG), which generalizes the classical Column Generation heuristic, and returns a near optimal solution to CDLP-P at termination. Different from PB, ACG is not known to be provably efficient. Finally, building on the tractability result, we design an earning-while-learning policy for the online NRM problem under an MultiNomial Logit choice model with unknown parameters. The policy runs in polynomial time, and achieves a sublinear regret.
Author: Wang Chi Cheung
Publisher:
ISBN:
Category :
Languages : en
Pages : 57
Get Book Here
Book Description
We consider the choice-based network revenue management problem (NRM). The LP relaxation, Choice-based Deterministic Linear Program (CDLP-P), has been proposed to mitigate the curse of dimensionality of the choice-based NRM. Despite the importance of CDLP-P, there is no polynomial time algorithm for solving CDLP-P for general choice models. Moreover, most heuristics for solving CDLP-P require solving the underlying Single Period Problem (SPP), which could be NP-hard. We propose the Potential Based algorithm (PB) that solves CDLP-P to near optimality with provable efficiency, assuming the ability to solve the underlying SPP approximately. In particular, PB implies polynomial time algorithms for approximating CDLP-P for a variety of choice models, such as Nested Logit, Mixed Logit and Markov Chain models, to near optimality.We also propose the Approximate Column Generation heuristic (ACG), which generalizes the classical Column Generation heuristic, and returns a near optimal solution to CDLP-P at termination. Different from PB, ACG is not known to be provably efficient. Finally, building on the tractability result, we design an earning-while-learning policy for the online NRM problem under an MultiNomial Logit choice model with unknown parameters. The policy runs in polynomial time, and achieves a sublinear regret.
Author: Sebastian Koch
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
We reconsider the stochastic dynamic program of revenue management with flexible products and customer choice behavior as proposed in the seminal paper by Gallego et al. [Gallego G, Iyengar G, Phillips R, Dubey A (2004) Managing flexible products on a network. Working paper, Columbia University, New York]. In the scientific literature on revenue management, as well as in practice, the prevailing strategy to operationalize dynamic programs is to decompose the network by resources and solve the resulting one-dimensional problems. However, up to now, these dynamic programming decomposition approaches have not been applicable to problems with flexible products, because the underlying state space is based on commitments rather than resources. In this paper, we contribute to the existing research by presenting an approach to operationalize revenue management with flexible products and customer choice in a dynamic programming environment. In particular, we propose a generic and formal procedure that transforms the original dynamic program with flexible products into an equivalent dynamic program with a resource-based state space. This reformulation renders the application of dynamic programming decomposition approaches possible. The procedure is based on Fourier-Motzkin elimination and is applicable to arbitrary network revenue management settings with regard to the considered network structure and the number and specifications of flexible products. Numerical experiments show a superior revenue performance of the new approach with average revenues close to the expected upper bound from the choice-based deterministic linear program (CDLP). Moreover, our reformulation improves revenues by up to 8% compared with an extended variant of a standard choice-based approach without flexible products that immediately assigns flexible products after sale.
Author: Dirk Sierag
Publisher:
ISBN:
Category :
Languages : en
Pages : 26
Get Book Here
Book Description
This paper proposes and analyses a pricing-based revenue management model that allows flexible products on a network, with a non-trivial extension to group reservations. Under stochastic demand the problem can be solved using a dynamic programming formulation, though it suffers from the curse of dimensionality. The solution under deterministic demand gives an upper bound on the stochastic problem, and serves as a basis for two heuristics, which are asymptotically optimal. Numerical studies show that the heuristics perform well, even under uncertainty in demand. Moreover, neglecting flexible products can lead to substantial revenue loss.
Author: Arne Karsten Strauss
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
Author: He Wang (Ph. D.)
Publisher:
ISBN:
Category :
Languages : en
Pages : 157
Get Book Here
Book Description
With the advances in information technology and the increased availability of data, new approaches that integrate learning and decision making have emerged in operations management. The learning-and-optimizing approaches can be used when the decision maker is faced with incomplete information in a dynamic environment. We first consider a network revenue management problem where a retailer aims to maximize revenue from multiple products with limited inventory constraints. The retailer does not know the exact demand distribution at each price and must learn the distribution from sales data. We propose a dynamic learning and pricing algorithm, which builds upon the Thompson sampling algorithm used for multi-armed bandit problems by incorporating inventory constraints. Our algorithm proves to have both strong theoretical performance guarantees as well as promising numerical performance results when compared to other algorithms developed for similar settings. We next consider a dynamic pricing problem for a single product where the demand curve is not known a priori. Motivated by business constraints that prevent sellers from conducting extensive price experimentation, we assume a model where the seller is allowed to make a bounded number of price changes during the selling period. We propose a pricing policy that incurs the smallest possible regret up to a constant factor. In addition to the theoretical results, we describe an implementation at Groupon, a large e-commerce marketplace for daily deals. The field study shows significant impact on revenue and bookings. Finally, we study a supply chain risk management problem. We propose a hybrid strategy that uses both process flexibility and inventory to mitigate risks. The interplay between process flexibility and inventory is modeled as a two-stage robust optimization problem: In the first stage, the firm allocates inventory, and in the second stage, after disruption strikes, the firm schedules its production using process flexibility to minimize demand shortage. By taking advantage of the structure of the second stage problem, we develop a delayed constraint generation algorithm that can efficiently solve the two-stage robust optimization problem. Our analysis of this model provides important insights regarding the impact of process flexibility on total inventory level and inventory allocation pattern.
Author: Institute for Operations Research and the Management Sciences. National Meeting
Publisher:
ISBN:
Category : Industrial management
Languages : en
Pages : 480
Get Book Here
Book Description
Author: Stanislav Ivanov
Publisher: Zangador
ISBN: 9549278638
Category : Travel
Languages : en
Pages : 205
Get Book Here
Book Description
This research monograph aims at developing an integrative framework of hotel revenue management. It elaborates the fundamental theoretical concepts in the field of hotel revenue management like the revenue management system, process, metrics, analysis, forecasting, segmentation and profiling, and ethical issues. Special attention is paid on the pricing and non-pricing revenue management tools used by hoteliers to maximise their revenues and gross operating profit. The monograph investigates the revenue management practices of accommodation establishments in Bulgaria and provides recommendations for their improvement. The book is suitable for undergraduate and graduate students in tourism, hospitality, hotel management, services studies programmes, and researchers interested in revenue/yield management. The book may also be used by hotel general managers, marketing managers, revenue managers and other practitioners looking for ways to improve their knowledge in the field.
Author: Robert Phillips
Publisher: Stanford University Press
ISBN: 0804781648
Category : Business & Economics
Languages : en
Pages : 470
Get Book Here
Book Description
This is the first comprehensive introduction to the concepts, theories, and applications of pricing and revenue optimization. From the initial success of "yield management" in the commercial airline industry down to more recent successes of markdown management and dynamic pricing, the application of mathematical analysis to optimize pricing has become increasingly important across many different industries. But, since pricing and revenue optimization has involved the use of sophisticated mathematical techniques, the topic has remained largely inaccessible to students and the typical manager. With methods proven in the MBA courses taught by the author at Columbia and Stanford Business Schools, this book presents the basic concepts of pricing and revenue optimization in a form accessible to MBA students, MS students, and advanced undergraduates. In addition, managers will find the practical approach to the issue of pricing and revenue optimization invaluable. Solutions to the end-of-chapter exercises are available to instructors who are using this book in their courses. For access to the solutions manual, please contact
[email protected].
Author: Tudor Bodea
Publisher: Routledge
ISBN: 1136624848
Category : Business & Economics
Languages : en
Pages : 267
Get Book Here
Book Description
The practices of revenue management and pricing analytics have transformed the transportation and hospitality industries, and are increasingly important in industries as diverse as retail, telecommunications, banking, health care and manufacturing. Segmentation, Revenue Management and Pricing Analytics guides students and professionals on how to identify and exploit revenue management and pricing opportunities in different business contexts. Bodea and Ferguson introduce concepts and quantitative methods for improving profit through capacity allocation and pricing. Whereas most marketing textbooks cover more traditional, qualitative methods for determining customer segments and prices, this book uses historical sales data with mathematical optimization to make those decisions. With hands-on practice and a fundamental understanding of some of the most common analytical models, readers will be able to make smarter business decisions and higher profits. This book will be a useful and enlightening read for MBA students in pricing and revenue management, marketing, and service operations.
Author: Robert P. Taylor
Publisher: World Bank Publications
ISBN: 0821373056
Category : Science
Languages : en
Pages : 306
Get Book Here
Book Description
While energy efficiency projects could partly meet new energy demand more cheaply than new supplies, weak economic institutions in developing and transitional economies impede developing and financing energy efficiency retrofits. This book analyzes these difficulties, suggests a 3-part model for projectizing and financing energy efficiency retrofits, and presents thirteen case studies to illustrate the issues and principles involved.
