Choice-based revenue management with applications in transportation

Abstract

This dissertation consists of three studies on choice-based revenue management. All these studies are motivated by applications that arise in real-world business settings and have not been well addressed in the literature. The unifying theme of these studies is finding appropriate models to account for customer choice behavior while solving the corresponding revenue optimization problems effectively. Chapter 2 considers a network revenue management problem for airlines, where airline customers tend to purchase on price. Chapter 3 explores a dynamic load pricing problem in truckload marketplaces from market makers' perspective, where carriers exhibit choice behavior on loads. Chapter 4 studies assortment optimization problems in which some customers are rigid about the products they want while others are willing to substitute if their most preferred products are not available. We propose novel problem formulations, give efficient solution methods, derive insights in operational decisions, and develop near-optimal and executable strategies.