Martinez-Sykora, A, So, MC, Currie, CSM et al. (2 more authors) (2020) Optimizing Pricing and Packing of Variable-Sized Cargo. IMA Journal of Management Mathematics. dpaa021. ISSN 1471-678X
Abstract
Organizations have successfully used dynamic pricing to optimize revenues for many years, where research and practice have mainly focused on applications with independent, discrete commodities; for example, an airline ticket. In this research we consider applications where the commodity is continuous and the value of the commodity available to sell depends on the combination of previously accepted demand. We focus on vehicle ferries, where the accepted vehicle bookings are packed in lanes in the ferry to leave a usable space for future bookings. Certain combinations of vehicles may result in areas of unusable space, which will affect future revenue. While this application is the focus of the paper, there are numerous industries that face similar challenges including freight and the sale of advertising on television and radio. In this paper, we simultaneously solve the pricing and resource utilization problem to optimality for a discrete set of product types and stochastic demand. Our approach combines a dynamic pricing model with a mixed-integer linear program to optimize the packing. We present results for real-world examples from the ferry industry and discuss extensions to the method to improve the selection of vehicle configurations.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © The Author(s) 2020. Published by Oxford University Press on behalf of the Institute of Mathematics and its Applications. All rights reserved.This is an author produced version of an article published in IMA Journal of Management Mathematics. Uploaded in accordance with the publisher's self-archiving policy. |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Faculty Office (LUBS) (Leeds) > Deans Office and Facilities (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 21 Aug 2020 14:43 |
Last Modified: | 29 Sep 2021 00:38 |
Status: | Published online |
Publisher: | Oxford University Press (OUP) |
Identification Number: | 10.1093/imaman/dpaa021 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:164600 |