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

Giorgio Grani (), Gianmaria Leo, Laura Palagi and Mauro Piacentini ()
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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
Mauro Piacentini: Sabre Airline Solutions

No 2016-04, DIAG Technical Reports from Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"

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.

Keywords: Revenue Management Models; Sales Based models; integer programming; decomposition methods (search for similar items in EconPapers)
Date: 2016
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