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Revenue Management: a Market-Service decomposition approach for the Sales Based Integer Program model

Author

Listed:
  • Giorgio Grani

    (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy - Sabre Airline Solutions)

  • Gianmaria Leo

    (Sabre Airline Solutions)

  • Laura Palagi

    (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy)

  • Mauro Piacentini

    (Sabre Airline Solutions)

Abstract

Airlines Revenue Management (RM) Departments pay remarkable attention to many different applications based on Sales Based Integer Program (SBIP). In fact, optimal solutions of SBIP are mainly used by airlines to evaluate the performance of their RM systems, as well as it plays the role of optimization core for some RM Decision Support System. We consider an a Sales-Based Integer Linear Program (SBILP) formulation following [4]. This SBILP is hard to solve to optimality on real problems. We propose a new formulation based on Market-Service decomposition that allows to solve smaller problems. We analyze properties of the decomposed problems.

Suggested Citation

  • Giorgio Grani & Gianmaria Leo & Laura Palagi & Mauro Piacentini, 2016. "Revenue Management: a Market-Service decomposition approach for the Sales Based Integer Program model," DIAG Technical Reports 2016-04, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    • Handle: RePEc:aeg:report:2016-04
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    References listed on IDEAS

    as
    1. Guillermo Gallego & Richard Ratliff & Sergey Shebalov, 2015. "A General Attraction Model and Sales-Based Linear Program for Network Revenue Management Under Customer Choice," Operations Research, INFORMS, vol. 63(1), pages 212-232, February.
    2. Qian Liu & Garrett van Ryzin, 2008. "On the Choice-Based Linear Programming Model for Network Revenue Management," Manufacturing & Service Operations Management, INFORMS, vol. 10(2), pages 288-310, October.
    Full references (including those not matched with items on IDEAS)

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