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Optimizing pricing and packing of variable-sized cargo

Optimizing pricing and packing of variable-sized cargo
Optimizing pricing and packing of variable-sized cargo
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 cannot be considered independent and the value of the commodity available to sell depends on the combination of previously accepted demand. In this paper we focus on vehicle ferries, where the accepted vehicle bookings are packed on the ferry to leave a useable space for future bookings. Certain combinations of vehicles may leave areas of unusable space therefore affecting 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 present a method that simultaneously solves the pricing and resource utilization problem with 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.
University of Southampton
Martinez Sykora, Antonio
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Bayliss, Christopher
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Bennell, Julia
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Currie, Christine
dcfd0972-1b42-4fac-8a67-0258cfdeb55a
So, Mee
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Martinez Sykora, Antonio
2f9989e1-7860-4163-996c-b1e6f21d5bed
Bayliss, Christopher
5fb04968-5cbf-40d8-84b0-02e8c7e94a59
Bennell, Julia
38d924bc-c870-4641-9448-1ac8dd663a30
Currie, Christine
dcfd0972-1b42-4fac-8a67-0258cfdeb55a
So, Mee
c6922ccf-547b-485e-8b74-a9271e6225a2

Martinez Sykora, Antonio, Bayliss, Christopher, Bennell, Julia, Currie, Christine and So, Mee (2018) Optimizing pricing and packing of variable-sized cargo University of Southampton 32pp.

Record type: Monograph (Working Paper)

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 cannot be considered independent and the value of the commodity available to sell depends on the combination of previously accepted demand. In this paper we focus on vehicle ferries, where the accepted vehicle bookings are packed on the ferry to leave a useable space for future bookings. Certain combinations of vehicles may leave areas of unusable space therefore affecting 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 present a method that simultaneously solves the pricing and resource utilization problem with 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.

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In preparation date: 27 March 2018

Identifiers

Local EPrints ID: 418964
URI: http://eprints.soton.ac.uk/id/eprint/418964
PURE UUID: a7f4e226-c998-4ded-8eda-9e4b456628c2
ORCID for Antonio Martinez Sykora: ORCID iD orcid.org/0000-0002-2435-3113
ORCID for Christine Currie: ORCID iD orcid.org/0000-0002-7016-3652
ORCID for Mee So: ORCID iD orcid.org/0000-0002-8507-4222

Catalogue record

Date deposited: 27 Mar 2018 16:30
Last modified: 08 Jun 2019 00:31

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Contributors

Author: Julia Bennell
Author: Mee So ORCID iD

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