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Abstract:

We consider a choice-based, network revenue management (RM) problem in a setting where heterogeneous customers consider an assortment of products offered by a firm (e.g., different flight times, fare classes, and/or routes). Individual choice decisions are modeled through an ordered list of preferences, and minimal assumptions are made about the statistical properties of this demand sequence. The firm manages the availability of products using a bid-price control strategy, and would like to optimize the control parameters. We formulate a continuous demand and capacity model for this problem that allows for the partial acceptance of requests. The model admits a simple calculation of the sample path gradient of the revenue function. This gradient is then used to construct a stochastic steepest ascent algorithm. We show that the algorithm converges (w.p.1) to a stationary point of the expected revenue function under mild conditions. The procedure is relatively efficient from a computational standpoint, and in our synthetic and real-data experiments performs comparably to or even better than other choice-based methods that are incompatible with the current infrastructure of RM systems. These features make it an interesting candidate to be pursued for real-world applications. © 2011 INFORMS.

Registro:

Documento: Artículo
Título:Computing bid prices for revenue management under customer choice behavior
Autor:Chaneton, J.M.; Vulcano, G.
Filiación:Departamento de Computación, Facultad de Ciencias Exactas y Naturales, Universidad de Buenos Aires, 1428 Buenos Aires, Argentina
Department of Information, Operations and Management Sciences, Leonard N. Stern School of Business, New York University, New York, NY 10012, United States
Palabras clave:Choice behavior; Network capacity control; Simulation-based optimization; Stochastic gradient methods; Capacity models; Choice behaviors; Continuous demand; Control parameters; Control strategies; Customer choice; Expected revenue; Fare class; Flight time; Individual choice; Network capacity control; Real-world application; Revenue function; Revenue management; Sample path; Simulation-based optimizations; Stationary points; Statistical properties; Steepest ascent; Stochastic gradient methods; Algorithms; Gradient methods; Management; Network management; Optimization; Stochastic systems; Commerce
Año:2011
Volumen:13
Número:4
Página de inicio:452
Página de fin:470
DOI: http://dx.doi.org/10.1287/msom.1110.0338
Título revista:Manufacturing and Service Operations Management
Título revista abreviado:Manuf. Serv. Oper. Manage.
ISSN:15234614
CODEN:MSOMF
Registro:https://bibliotecadigital.exactas.uba.ar/collection/paper/document/paper_15234614_v13_n4_p452_Chaneton

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Citas:

---------- APA ----------
Chaneton, J.M. & Vulcano, G. (2011) . Computing bid prices for revenue management under customer choice behavior. Manufacturing and Service Operations Management, 13(4), 452-470.
http://dx.doi.org/10.1287/msom.1110.0338
---------- CHICAGO ----------
Chaneton, J.M., Vulcano, G. "Computing bid prices for revenue management under customer choice behavior" . Manufacturing and Service Operations Management 13, no. 4 (2011) : 452-470.
http://dx.doi.org/10.1287/msom.1110.0338
---------- MLA ----------
Chaneton, J.M., Vulcano, G. "Computing bid prices for revenue management under customer choice behavior" . Manufacturing and Service Operations Management, vol. 13, no. 4, 2011, pp. 452-470.
http://dx.doi.org/10.1287/msom.1110.0338
---------- VANCOUVER ----------
Chaneton, J.M., Vulcano, G. Computing bid prices for revenue management under customer choice behavior. Manuf. Serv. Oper. Manage. 2011;13(4):452-470.
http://dx.doi.org/10.1287/msom.1110.0338