Models and Techniques for Hotel Revenue Management Using a Roling Horizon

AbstractThis paper studies decision rules for accepting reservations for stays in a hotel based on deterministic and stochastic mathematical programming techniques. Booking control strategies are constructed that include ideas for nesting, booking limits and bid prices. We allow for multiple day stays. Instead of optimizing a decision period consisting of a fixed set of target booking days, we simultaneously optimize the complete range of target booking dates that are open for booking at the moment of optimization. This yields a rolling horizon of overlapping decision periods, which will conveniently capture the effects of overlapping stays.mathematical programming;Revenue Management;yield management

Multi-Period Stochastic Resource Planning: Models, Algorithms and Applications

This research addresses the problem of sequential decision making in the presence of uncertainty in the professional service industry. Specifically, it considers the problem of dynamically assigning resources to tasks in a stochastic environment with both the uncertainty of resource availability due to attrition, and the uncertainty of job availability due to unknown project bid outcome. This problem is motivated by the resource planning application at the Hewlett Packard (HP) Enterprises. The challenge is to provide resource planning support over a time horizon under the influence of internal resource attrition and demand uncertainty. To ensure demand is satisfied, the external contingent resources can be engaged to make up for internal resource attrition. The objective is to maximize profitability by identifying the optimal mix of internal and contingent resources and their assignments to project tasks under explicit uncertainty. While the sequential decision problems under uncertainty can often be modeled as a Markov decision process (MDP), the classical dynamic programming (DP) method using the Bellman’s equation suffers the well-known curses-of-dimensionality and only works for small size instances. To tackle the challenge of curses-of-dimensionality this research focuses on developing computationally tractable closed-loop Approximate Dynamic Programming (ADP) algorithms to obtain near-optimal solutions in reasonable computational time. Various approximation schemes are developed to approximate the cost-to-go function. A comprehensive computational experiment is conducted to investigate the performance and behavior of the ADP algorithm. The performance of ADP is also compared with that of a rolling horizon approach as a benchmark solution. Computational results show that the optimization model and algorithm developed in this thesis are able to offer solutions with higher profitability and utilization of internal resource for companies in the professional service industry

Optimizing Strategic Allocation of Vehicles for One-Way Car-sharing Systems Under Demand Uncertainty

Car-sharing offers an environmentally sustainable, socially responsible and economically feasible mobility form in which a fleet of shared-use vehicles in a number of locations can be accessed and used by many people on as-needed basis at an hourly or mileage rate. To ensure its sustainability, car-sharing operators must be able to effectively manage dynamic and uncertain demands, and make the best decisions on strategic vehicle allocation and operational vehicle reallocation both in time and space to improve their profits while keeping costs under control. This paper develops a stochastic optimization method to optimize strategic allocation of vehicles for one-way car-sharing systems under demand uncertainty. A multi-stage stochastic linear programming model is developed and solved for use in the context of car-sharing. A seven-stage experimental network study is conducted. Numerical results and computational insights are discussed

New optimization models for empty container management

This thesis investigates the reasons why nowadays empty container repositioning represents a crucial issue for the shipping industry. Moreover, taking into account information collected through surveys and meetings with industrial experts, we provide a broad overview of current logistic practices for the management of empty containers in the context of international trade. We develop new optimization models in order to support shipping companies in dealing with empty container repositioning. We determine optimal repositioning plans within the time limits imposed by planning operations. Some optimization models have been tested on real data problems provided by a shipping company. These results show that it is possible to achieve significant savings in costs and times requested to determine repositioning plan

Data-Driven Dynamic Robust Resource Allocation: Application to Efficient Transportation

The transformation to smarter cities brings an array of emerging urbanization challenges. With the development of technologies such as sensor networks, storage devices, and cloud computing, we are able to collect, store, and analyze a large amount of data in real time. Modern cities have brought to life unprecedented opportunities and challenges for allocating limited resources in a data-driven way. Intelligent transportation system is one emerging research area, in which sensing data provides us opportunities for understanding spatial-temporal patterns of demand human and mobility. However, greedy or matching algorithms that only deal with known requests are far from efficient in the long run without considering demand information predicted based on data. In this dissertation, we develop a data-driven robust resource allocation framework to consider spatial-temporally correlated demand and demand uncertainties, motivated by the problem of efficient dispatching of taxi or autonomous vehicles. We first present a receding horizon control (RHC) framework to dispatch taxis towards predicted demand; this framework incorporates both information from historical record data and real-time GPS location and occupancy status data. It also allows us to allocate resource from a globally optimal perspective in a longer time period, besides the local level greedy or matching algorithm for assigning a passenger pick-up location of each vacant vehicle. The objectives include reducing both current and anticipated future total idle driving distance and matching spatial-temporal ratio between demand and supply for service quality. We then present a robust optimization method to consider spatial-temporally correlated demand model uncertainties that can be expressed in closed convex sets. Uncertainty sets of demand vectors are constructed from data based on theories in hypothesis testing, and the sets provide a desired probabilistic guarantee level for the performance of dispatch solutions. To minimize the average resource allocation cost under demand uncertainties, we develop a general data-driven dynamic distributionally robust resource allocation model. An efficient algorithm for building demand uncertainty sets that compatible with various demand prediction methods is developed. We prove equivalent computationally tractable forms of the robust and distributionally robust resource allocation problems using strong duality. The resource allocation problem aims to balance the demand-supply ratio at different nodes of the network with minimum balancing and re-balancing cost, with decision variables on the denominator that has not been covered by previous work. Trace-driven analysis with real taxi operational record data of San Francisco shows that the RHC framework reduces the average total idle distance of taxis by 52%, and evaluations with over 100GB of New York City taxi trip data show that robust and distributionally robust dispatch methods reduce the average total idle distance by 10% more compared with non-robust solutions. Besides increasing the service efficiency by reducing total idle driving distance, the resource allocation methods in this dissertation also reduce the demand-supply ratio mismatch error across the city

Dynamic vehicle routing problems: Three decades and counting

Since the late 70s, much research activity has taken place on the class of dynamic vehicle routing problems (DVRP), with the time period after year 2000 witnessing a real explosion in related papers. Our paper sheds more light into work in this area over more than 3 decades by developing a taxonomy of DVRP papers according to 11 criteria. These are (1) type of problem, (2) logistical context, (3) transportation mode, (4) objective function, (5) fleet size, (6) time constraints, (7) vehicle capacity constraints, (8) the ability to reject customers, (9) the nature of the dynamic element, (10) the nature of the stochasticity (if any), and (11) the solution method. We comment on technological vis-à-vis methodological advances for this class of problems and suggest directions for further research. The latter include alternative objective functions, vehicle speed as decision variable, more explicit linkages of methodology to technological advances and analysis of worst case or average case performance of heuristics.© 2015 Wiley Periodicals, Inc