Decomposition methods for dynamic room allocation in hotel revenue management

Long-term stays are quite common in the hotel business. Consequently, it is crucial for the hotel managements to consider the allocation of available rooms to a stream of customers requesting to stay multiple days. This requirement leads to the solving of dynamic network revenue management problems that are computationally challenging. A remedy is to apply decomposition approaches so that an approximate solution can be obtained by solving many simpler problems. In this study, we investigate several room allocation policies in hotel revenue management. We work on various decomposition methods to find reservation policies for advance bookings and stay-over customers. We also devise solution algorithms to solve the resulting problems efficiently

Energy-Optimal Scheduling in Low Duty Cycle Sensor Networks

Energy consumption of a wireless sensor node mainly depends on the amount of time the node spends in each of the high power active (e.g., transmit, receive) and low power sleep modes. It has been well established that in order to prolong node's lifetime the duty-cycle of the node should be low. However, low power sleep modes usually have low current draw but high energy cost while switching to the active mode with a higher current draw. In this work, we investigate a MaxWeightlike opportunistic sleep-active scheduling algorithm that takes into account time- varying channel and traffic conditions. We show that our algorithm is energy optimal in the sense that the proposed ESS algorithm can achieve an energy consumption which is arbitrarily close to the global minimum solution. Simulation studies are provided to confirm the theoretical results

Speed optimization and bunkering in liner shipping in the presence of uncertain service times and time windows at ports

Recent studies in maritime shipping have concentrated on environmental and economic impacts of ships. In this regard, fuel is considered as one of the important factors for such impacts. In particular, the sailing speed of the vessels affects the fuel consumption directly. In this study, we consider a speed optimization problem in liner shipping, which is characterized by stochastic port times and time windows. The objective is to minimize the total fuel consumption while maintaining the schedule reliability. We develop a dynamic programing model by discretizing the port arrival times to provide approximate solutions. A deterministic model is presented to provide a lower bound on the optimal expected cost of the dynamic model. We also work on the effect of bunker prices on the liner service schedule. We propose a dynamic programing model for bunkering problem. Our numerical study using real data from a European liner shipping company indicates that the speed policy obtained by proposed dynamic model performs significantly better than the ones obtained by benchmark methods. Moreover, our results show that making speed decisions considering the uncertainty of port times will noticeably decrease fuel consumption cost

Delayed purchase options in single-leg revenue management

Many airline reservation systems offer the commitment option to their potential passengers. This option allows passengers to reserve a seat for a fixed duration before making a final purchase decision. In this study, we develop single-leg revenue management models that consider such contingent commitment decisions. We start with a dynamic programming model of this problem. This model is computationally intractable as it requires storing a multidimensional state space because of bookkeeping of the committed seats. To alleviate this difficulty, we propose an alternate dynamic programming formulation that uses an approximate model of how the contingent commitments behave and we show how to extract a capacity allocation policy from the approximate dynamic programming formulation. In addition, we present a deterministic linear programming model that gives an upper bound on the optimal expected revenue from the intractable dynamic programming model. As the problem size becomes large in terms of flight capacity and the expected number of arrivals, we demonstrate an asymptotic lower bound for the deterministic linear programming model. Our extensive numerical study indicates that offering commitment options can noticeably increase potential revenue even though offering a contingent commitment option may not always be in the best interest of the airline. Also, our results show that the proposed approximate dynamic programming model coordinates capacity allocation and commitment decisions quite well

New models for single leg airline revenue management with overbooking, no-shows, and cancellations

Airline revenue management (ARM) problem focuses on finding a seat allocation policy, which results in the maximum profit. Overbooking has been receiving significant attention in ARM over the years, since a major loss in revenue results from cancellations and no-shows. Basically, overbooking problem aims at maximizing the profit by minimizing the number of vacant seats. However, this problem is difficult to handle due to the demand and cancellation uncertainties and the size of the problem. In this study, we propose new models for the static and the dynamic overbooking problems. Due to the complex analytical form of the overbooking problem, in the static case we introduce models that give upper and lower bounds on the optimal expected profit. In the dynamic case, however, we propose a new dynamic programming model, which is based on two streams of arrivals; one for booking and the other one is for cancellation. This approach allows us to come up with a computationally tractable model. We also present numerical results to show the effectiveness of our models

Differentially Private Linear Optimization for Multi-Party Resource Sharing

This study examines a resource-sharing problem involving multiple parties that agree to use a set of capacities together. We start with modeling the whole problem as a mathematical program, where all parties are required to exchange information to obtain the optimal objective function value. This information bears private data from each party in terms of coefficients used in the mathematical program. Moreover, the parties also consider the individual optimal solutions as private. In this setting, the concern for the parties is the privacy of their data and their optimal allocations. We propose a two-step approach to meet the privacy requirements of the parties. In the first step, we obtain a reformulated model that is amenable to a decomposition scheme. Although this scheme eliminates almost all data exchanges, it does not provide a formal privacy guarantee. In the second step, we provide this guarantee with a locally differentially private algorithm, which does not need a trusted aggregator, at the expense of deviating slightly from the optimality. We provide bounds on this deviation and discuss the consequences of these theoretical results. We also propose a novel modification to increase the efficiency of the algorithm in terms of reducing the theoretical optimality gap. The study ends with a numerical experiment on a planning problem that demonstrates an application of the proposed approach. As we work with a general linear optimization model, our analysis and discussion can be used in different application areas including production planning, logistics, and revenue management

Multi-objective temporal bin packing problem : an application in cloud computing

Improving energy efficiency and lowering operational costs are the main challenges faced in systems with multiple servers. One prevalent objective in such systems is to minimize the number of servers required to process a given set of tasks under server capacity constraints. This objective leads to the well-known bin packing problem. In this study, we consider a generalization of this problem with a time dimension, where the tasks are to be performed with predefined start and end times. This new dimension brings about new performance considerations, one of which is the uninterrupted utilization of servers. This study is motivated by the problem of energy efficient assignment of virtual machines to physical servers in a cloud computing service. We address the virtual machine placement problem and present a binary integer programming model to develop different assignment policies. By analyzing the structural properties of the problem, we propose an efficient heuristic method based on solving smaller versions of the original problem iteratively. Moreover, we design a column generation algorithm that yields a lower bound on the objective value, which can be utilized to evaluate the performance of the heuristic algorithm. Our numerical study indicates that the proposed heuristic is capable of solving large-scale instances in a short time with small optimality gaps

Masking primal and dual models for data privacy in network revenue management

We study a collaborative revenue management problem where multiple decentralized parties agree to share some of their capacities. This collaboration is performed by constructing a large mathematical programming model that is available to all parties. The parties then use the solution of this model in their own capacity control systems. In this setting, however, the major concern for the parties is the privacy of their input data, along with their individual optimal solutions. We first reformulate a general linear programming model that can be used for a wide range of network revenue management problems. Then we address the data privacy concern of the reformulated model and propose an approach based on solving an equivalent data-private model constructed with input masking via random transformations. Our main result shows that, after solving the data-private model, each party can safely access only its own optimal capacity allocation decisions. We also discuss the security of the transformed problem in the considered multi-party setting. Simulation experiments are conducted to support our results and evaluate the computational efficiency of the proposed data-private model. Our work provides an analytical approach and insights on how to manage shared resources in a network problem while ensuring data privacy. Constructing and solving a collaborative network problem requires information exchange between parties that may not be possible in practice. Including data privacy in decentralized collaborative network revenue management problems with capacity sharing is new to the literature and relevant to practice

Data-driven optimization for transport and logistics systems

The landscape of transport and logistics systems has transformed significantly due to urbanization and digitalization. The recent technological innovations and the widespread availability of massive amounts of data have created new challenges and opportunities. One of the main challenges for transport operators is to deal with large-scale and complex problems at minimal cost while satisfying the needs of service users. Operators aim at solving these complex problems in a computationally efficient way. In recent years, with the increase of demand, this task has become more challenging

Dynamic production-pricing strategies for multi-generation products under uncertainty

Due to rapid advances in technology and design, firms periodically release new generations of electronic products such as mobile phones and computers. In order to increase product variability, firms may wish to develop a multiple-generation product line rather than replace the older versions with new ones. However, when multiple generations are available in the market, different generations compete with each other as well as other products in the market. Firms need to take joint decisions for the purpose of inventory management and dynamic pricing of multiple generations to tackle impact of uncertain demand and market competition. In this paper, we present a dynamic joint production-pricing decision model to obtain optimal strategies for a firm selling multiple generations of a product. We account for the internal competition among multiple generations by evaluating customer choices. In order to tackle a curse of dimensionality, we introduce a forward dynamic programming approach for approximately solving the joint production-pricing problem. We also propose a two-stage heuristic algorithm as an alternative solution approach. Different pricing rules determined from the abridged model and a price list derived by theoretical bounds are integrated to improve further computational performance of the solution approaches. We design computational experiments to illustrate effectiveness and efficiency of these approximate methods and show the benefit of joint decision-making process in multi-generation product line