A refined deterministic linear program for the network revenue management problem with customer choice behavior

Sumit Kunnumkal and Huseyin Topaloglu

Naval Research Logistics (NRL), 2008, vol. 55, issue 6, 563-580

Abstract: 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 an upper bound on the optimal total expected revenue over the planning horizon. In addition, the percent gap between the optimal objective value of our linear program and the optimal total expected revenue diminishes in an asymptotic regime where the leg capacities and the number of time periods in the planning horizon increase linearly with the same rate. Computational experiments indicate that when compared with the linear program that appears in the existing literature, our linear program can provide tighter upper bounds, and the control policies that are based on our linear program can obtain higher total expected revenues. © 2008 Wiley Periodicals, Inc. Naval Research Logistics, 2008

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://doi.org/10.1002/nav.20296

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:navres:v:55:y:2008:i:6:p:563-580

Access Statistics for this article

More articles in Naval Research Logistics (NRL) from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().