Revenue management policies for the truck rental industry

In this paper, we consider the problem of managing a fleet of trucks with different capacity to serve the requests of different customers that arise randomly over time. The problem is formulated via dynamic programming. Linear programming approximations of the problem are presented and their solutions are exploited to develop partitioned booking limits and bid prices policies. The numerical experiments show that the proposed policies can be profitably used in supporting the decision maker.

[1]  Elizabeth Louise Williamson,et al.  Airline network seat inventory control : methodologies and revenue impacts , 1992 .

[2]  Wen-Chyuan Chiang,et al.  An overview of research on revenue management: current issues and future research , 2007 .

[3]  Laurence A. Wolsey,et al.  A recursive procedure to generate all cuts for 0–1 mixed integer programs , 1990, Math. Program..

[4]  Jeffrey I. McGill,et al.  Revenue Management: Research Overview and Prospects , 1999, Transp. Sci..

[5]  John N. Tsitsiklis,et al.  Neuro-Dynamic Programming , 1996, Encyclopedia of Machine Learning.

[6]  William L. Cooper.  Asymptotic Behavior of an Allocation Policy for Revenue Management , 2002, Oper. Res..

[7]  Warren B. Powell,et al.  Dynamic-Programming Approximations for Stochastic Time-Staged Integer Multicommodity-Flow Problems , 2006, INFORMS J. Comput..

[8]  Warren B. Powell,et al.  “Approximate dynamic programming: Solving the curses of dimensionality” by Warren B. Powell , 2007, Wiley Series in Probability and Statistics.

[9]  Richard Freling,et al.  Mathematical programming for network revenue management revisited , 2002, Eur. J. Oper. Res..

[10]  Warren B. Powell,et al.  Chapter 5 Dynamic Models for Freight Transportation , 2007, Transportation.

[11]  Warren B. Powell,et al.  An Adaptive Dynamic Programming Algorithm for the Heterogeneous Resource Allocation Problem , 2002, Transp. Sci..

[12]  K. Talluri,et al.  The Theory and Practice of Revenue Management , 2004 .

[13]  K. Talluri,et al.  An Analysis of Bid-Price Controls for Network Revenue Management , 1998 .