Sharif Digital Repository

This research deals with the problem of dynamic pricing of perishable assets. In this problem there are two sources of randomness: the arrival rate of customers and their reservation prices. In most studies considering this problem, it’s assumed that process of arrivals of customers follows a Poisson process with a given intensity. Thus this process is assumed to have independent increments and the information regarding the arrival times of previous customers doesn’t have any influence on the distribution of arrival times of future customers. In some recent studies it’s assumed that customers’ arrivals follow a conditional Poisson process with an unknown intensity. The distribution of this... 

The problem of developing optimal pricing and inventory allocation strategies has been extensively studied over the past two decades. However, most of the literature in this area assumes that customers are myopic price-takers, and do not respond to firm pricing strategically. In this study, we present review on a class of problems that consider a firm selling a finite number of items over a finite time horizon facing stochastic demand and a group of customers who act strategically by timing their purchases. We first review the optimal purchasing policy for the customers, and pricing policy for the firm that is the best response policy to the customer’s strategic behavior. Then we present a... 

Seasonal Products are a group of products with a limited life time. If seasonal products are not sold during a specified time, they have to be sold at a salvage price which is close to zero. Although one can find many studies in the literature regarding pricing of this type of products in order to maximize the profit, none of them have considered the simultaneous effect of both advertising and pricing. The objective of this paper is to introduce an integrated model of dynamic pricing and advertising for seasonal products. The advertisement is classified into two main categories; to advertise a specific type of product and to advertise the brand of the company. To obtain the mentioned goal,... 

In this investigation, two pricing models are extended with continuous and periodic price settings through dynamic programming approach. In this problem, we intend to sell a perishable product in a finite horizon with no salvage value through an advance-sale system. The objective function in these models is maximizing expected value of firms’ revenue by setting optimal prices in pricing periods. Demand is assumed to be stochastic time and price-dependent and also customers might cancel their reservations by paying a penalty before delivery. Structural properties of the optimal policy are investigated for both models and the concavity and inventory monotonicity properties are proved for both.... 

Nowadays, Resource Capacity Management (RCM) is one of the main challenges for industries which have a limited capacity to meet the demands. Revenue Management (RM) is a technique that controls the supply, improves the quality of Capacity Management and maximizes the revenue. Supplying the products and services to different groups of customers is a decision making problem.While the classic RM techniques take into account only the expected revenue, preferences of decision makers strongly affect the results. In this study, utility theory has been proposed because the healthcare industries are usually nonprofitable and they are not highly focused on the revenue gained by their products and... 

In this thesis, the problem of the hotel revenue management with the customer choice behaiver has been studied . In this model , each customer has a preference order among the set of products. He purchased or booked his products according to his ordered list of preferences. Because the high number of hotel products are assumed, each customer can only choices different fare classes and the list of the preference customers is made up of different fare classes. Two different approaches have been used to solve this problem . The first approach is The linear programming model in which α percent of the capacity is allocated to business customers and the remaining capacity to leisuer customers... 

Revenue Management and Customer Relationship management are among the strategies that organizations use to increase their profitability. However, in the literature integrating these two strategies, have received little attention, especially in the case of Hotel. In this study, we develop a dynamic revenue management model to jointly make the capacity allocation and overbooking decision over a hotel network, in which customer relationship management strategies are also considered. Hotel customers are divided in two major groups of occasional and loyal customers. Price discounts and room availability is guaranteed for loyal customers, who are the hotel most profitable customers. A stochastic... 

In this thesis by considering airplane capacity as a perishable asset revenue management models are employed for capacity allocation to customer different class. The thesis contains two main revenue management models. In the first one, single leg capacity allocation with overbooking, cancellation no-show and sell up is studied. The main contribution of this model is considering sell up or nested associated with other assumption. This problem is formulated as a dynamic programming model. Optimal policy and optimal seat allocation in case of overbooking is also determined. Contrary to what is assumed, it is shown that the income of lower fare class is more than accepting higher class.In this... 

This research aims to establish a novel approach to meet the capacity utilization challenge of the freight forwarders in order to maximize the expected revenue in a cargo network. The two-dimensional cargo capacities are assumed to be stochastic and limited in each leg. A stochastic dynamic programming model is developed to demonstrate the maximization of expected revenue over a finite planning horizon, in which each fare class request is to be either accepted or rejected. Although the main problem is computationally intractable due to multidimensional state variable, it can be decomposed into one-dimensional capacity control sub-problems for each leg. A heuristic algorithm is developed to... 

This dissertation develops a new approach in network revenue management problems, with concentration on hotel industry. Several methods and heuristics are suggested in the literature to obtain an appropriate solution for network problems, however their focus is mostly on the transportation carriers. These heuristics do not seem to have satisfying effectiveness for hotel industry cases, because of significant difference between these two industries including the network structures, demand distributions and competition markets. On the other hand, with the tremendous growth of the internet and online sale channels, customers’ purchase behavior is modifying drastically. However this behavioral... 

Pricing and Revenue Management in systems that offer services in subscription as well as pay-per-use format simultaneously is one of the most significant challenges in service companies. One of the main criteria in these systems is keeping the loyal customers and attracting more subscribers. Pricing and capacity allocation are decisions to be made in such systems considering customer’s behavior. In this research, we consider a service system with subscription and pay per use options to analyze the price and capacity allocation based on customer’s bahvior. The Loss Aversion theory is assumed for customer’s behavior and its effect on decisions is analyzed. A greedy algorithm as well as a smart... 

In this thesis, we study a queuing system with one server in which customers differ in both sensitivity to delay and willingness to pay. In this system, the server’s goal is to design a mechanism in order to maximize her revenue. It is worth to mention that nonlinear delay cost is implemented.Making use of the achievable region approach, we show that a well-designed menu of probabilistic admission control along with priority pricing contracts, may force customers to reveal their true valuations and at the same time induce customers that are more sensitive to delay to opt for higher priorities. Thus, the probabilistic admission control allows the server to identify the customers that are... 

This thesis studies optimal pricing policy of a firm selling perishable products in a retail store facing stochastic arrival of customers whom may ask for a bargain. With the tremendous growth of the internet and online sale channels, the ability of customers to get detailed information about previous sales creates an expectation for reasonable price of product in customers' opinion called reference price which has great impacts on their willingness to pay. In this work, we address the problem of determining a pricing strategy considering reference price effects in addition to customers' negotiation ability. We use dynamic programming to model retailer's problem, which considering reference... 

In this research, we consider a made-to-order production system which receives orders for a single product. The demand is stochastic and price-dependent. We also consider a sale index that links the demand of each period to the demands as well as to the quality of the previous periods. The variety of quality levels and its effect on the amount of orders make this revenue management complicated. Furthermore, the price of each product is related to its quality and sales index. Furthermore, reference price causes the model to be significantly more complicated. We model the problem within the framework of dynamic programming approach to maximize the discounted profit of the firm during a... 

In this thesis, we address the Revenue Management problem, when there is cancellation, no-shows, overbooking, and refund constraints. We model this problem using Dynamic Programming. Given the fact that this problem is intractable, we develop a linear programming model that is equivalent to our problem. We first prove that the optimal value of linear programming objective function serves as an upper bound for the Dynamic Program. In the next part we develop a bid-pricing technique, using the shadow prices of the aforementioned linear program, to decide upon rejecting, or accepting the seats, in the network. Using the Monte-Carlo Simulation we show that there is a small distance between the... 

The present study investigates dynamic pricing in case of urban transportation operators competing on an identical network. Game theory has been adopted as an approach to the modeling and solutions.Game theory is a mathematical theory widely applied in competitive situations.The proposed model takes the players’ interdependency problems into account to predict their decisions as well as the displacement on the network about equilibrium point. The problem is modeled in no-cooperation state using the dynamic Nash equilibrium; Gauss-Seidel algorithm is used for the solutions considering the discontinuity of the decision space. A comprehensive sensitivity analysis has also been conducted on the... 

In this research, a pricing-inventory model with multiple interdependent products and stochastic demand is studied. In the relevant literature, there are many researches that are related to optimize the inventory or price independently and also optimizing joint inventory and pricing for single product. But joint optimization of inventory and pricing for multiple interdependent products is relatively new and still there are many potential research gaps in this area. We develop the model with additive and multiplicative demand uncertainty. Then we develop a genetic algorithm and tune its parameters to solve the models. We investigate the efficiency of proposed GA. Results were relatively good.... 

In this thesis, we will examine the issue of managing airlines' income and determining the appropriate policies for storing accommodation for different classes in the seats of a flight. Most airlines use a nesting structure to allocate seats, in which access between classes is possible, but only the higher class can access all the seats in the subclass. It is assumed that this structure and allocation process increase company revenue, but the problem is that the chances of staying in the seat will increase in the hope of higher demand and higher risk of corporate income reduction.With the goal of providing a way to determine the optimal classroom dynamically, this study, for the first... 

The Revenue management concept has been studied and noticed by researchers for more than forty years. Although the applications of revenue management grow in different industries continuously, airline industry which is the origin of this research area is the pioneer of developing and representing new models. In the last few years, there has been a trend to enrich traditional revenue management models. In this thesis we first, reviewed most aspects of revenue management studies especially in airline industry, then choice-based customer behavior concept is introduced. Also a case sample study in customer choice behavior has been developed with time scale considering and remodeled. According to... 

This thesis focuses on the network capacity control problem while, risk-averse criteria is considered for decision making. Network revenue management models have wide applications in various industries such as airlines, hotels, railways, rental halls due to handling multiple resources. All models in the related literature are developed based on risk-neutral criteria. However, in this thesis we consider risk-averse policies for many reasons such as risk reduction, covering fixed costs rather than maximizing revenue, and earning some specific revenue within a specific time period. We apply dynamic programming by adopting two types of utility functions: 1) additive and time-separable utility...