A Tractable Consideration Set Structure for Network Revenue Management
The dynamic program for choice network RM is intractable and approximated by a deterministic linear program called the CDLP. When the segment consideration sets overlap, the CDLP is difficult to solve. A weaker formulation (SDCP+) is tractable and approximates the CDLP value very closely. We show that if the segment consideration sets follow a tree structure, the two problems are equivalent, and give a counterexample to show that cycles can induce a gap between CDLP and the relaxation.
|Date of creation:||Feb 2012|
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- Joern Meissner & Arne Strauss & Kalyan Talluri, 2011.
"An enhanced concave program relaxation for choice network revenue management,"
Economics Working Papers
1259, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 2011.
- Joern Meissner & Arne Strauss & Kalyan Talluri, 2011. "An Enhanced Concave Program Relaxation for Choice Network Revenue Management," Working Papers 534, Barcelona Graduate School of Economics.
- Joern Meissner & Arne Strauss & Kalyan Talluri, 2011. "An Enhanced Concave Program Relaxation for Choice Network Revenue Management," Working Papers MRG/0020, Department of Management Science, Lancaster University, revised Jan 2011.
- Meissner, Joern & Strauss, Arne, 2012.
"Network revenue management with inventory-sensitive bid prices and customer choice,"
European Journal of Operational Research,
Elsevier, vol. 216(2), pages 459-468.
- Joern Meissner & Arne Strauss, 2008. "Network Revenue Management with Inventory-Sensitive Bid Prices and Customer Choice," Working Papers MRG/0008, Department of Management Science, Lancaster University, revised Apr 2010.
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