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Abstract
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Article Information:
On the Origin-Destination Demands Linear Programming Model for Network Revenue Management with Customer Choice
Feng Liu, Qizong Wu and Ying Qu
Corresponding Author: Feng Liu
Submitted: September 06, 2012
Accepted: October 09, 2012
Published: June 20, 2013 |
Abstract:
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In this study, we research the problem of network revenue management with customer choice based on the Origin-Destination (O-D) demands. By dividing customers into different segments according to O-D pairs, we consider a network capacity control problem where each customer chooses the open product within the segment he belongs to. Starting with a Markov Decision Process (MDP) formulation, we approximate the value function with an affine function of the state vector. The affine function approximation results in a new Linear Program (LP) which yields tighter bounds than the Choice-based Deterministic Linear Program (CDLP). We give a column generation procedure for solving the LP within a desired optimality tolerance and present numerical results which show the policy perform from our solution approach can outperform that from the CDLP.
Key words: Choice behavior, dynamic programming, linear programming, network revenue management, , ,
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Cite this Reference:
Feng Liu, Qizong Wu and Ying Qu, . On the Origin-Destination Demands Linear Programming Model for Network Revenue Management with Customer Choice. Research Journal of Applied Sciences, Engineering and Technology, (04): 660-667.
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ISSN (Online): 2040-7467
ISSN (Print): 2040-7459 |
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