A Randomized Linear Program for the Network Revenue Management Problem with Customer Choice Behavior (Research Paper)
نویسندگان
چکیده
In this paper, we propose a randomized linear program to obtain bid prices for the network revenue management problem with customer choice behavior. Our development proceeds in two stages. We first formulate a mixed integer program that can be viewed as a deterministic approximation to the network revenue management problem. We then use the optimal solution to the mixed integer program to formulate a linear program that can be easily randomized. We establish that our solution method approximates the optimal total expected revenue arbitrarily closely in an asymptotic regime where the leg capacities and the number of time periods in the decision horizon increase linearly with the same rate. Numerical experiments indicate that our approach may be a viable alternative to the standard deterministic linear program that appears in the existing literature.
منابع مشابه
Solving Bi-objective Model of Hotel Revenue Management Considering Customer Choice Behavior Using Meta-heuristic Algorithms
The problem of maximizing the benefit from a specified number of a particular product with respect to the behavior of customer choices is regarded as revenue management. This managerial technique was first adopted by the airline industries before being widely used by many others such as hotel industries. The scope of this research is mainly focused on hotel revenue management, regarding which a...
متن کاملA Genetic Algorithm for Choice-Based Network Revenue Management
In recent years, enriching traditional revenue management models by considering the customer choice behavior has been a main challenge for researchers. The terminology for the airline application is used as representative of the problem. A popular and an efficient model considering these behaviors is choice-based deterministic linear programming (CDLP). This model assumes that each customer bel...
متن کاملRandomization Approaches for Network Revenue Management with Customer Choice Behavior
In this paper, we present new approximation methods for the network revenue management problem with customer choice behavior. Our methods are sampling-based and so we require only minimal assumptions regarding the underlying customer choice model. The starting point for our methods is a dynamic program that allows randomization. An attractive feature of this dynamic program is that the size of ...
متن کاملA New Dynamic Programming Decomposition Method for the Network Revenue Management Problem with Customer Choice Behavior
In this paper, we propose a new dynamic programming decomposition method for the network revenue management problem with customer choice behavior. The fundamental idea behind our dynamic programming decomposition method is to allocate the revenue associated with an itinerary among the different flight legs and to solve a single-leg revenue management problem for each flight leg in the airline n...
متن کاملA Refined Deterministic Linear Program for the Network Revenue Management Problem with Customer Choice Behavior
We present a new deterministic linear program for the network revenue management problem with customer choice behavior. The novel aspect of our linear program is that it naturally generates bid prices that depend on how much time is left until the time of departure. Similar to the earlier linear program used by van Ryzin and Liu (2004), the optimal objective value of our linear program provides...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2010