LiBiT algorithm to solve static pricing problems under mixed multinomial logit demand
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Marandi, Ahmadreza; Lurkin, Virginie (2020): LiBiT algorithm to solve static pricing problems under mixed multinomial logit demand. Version 1. 4TU.ResearchData. dataset. https://doi.org/10.4121/12852824.v1Other citation styles (APA, Harvard, MLA, Vancouver, Chicago, IEEE) available at Datacite
licenceCC BY-NC 4.0
Price differentiation is a common strategy for many operators. We study a static multiproduct price optimization problem with demand given by a continuous mixed multinomial logit model. To solve this new problem, we design an efficient iterative optimization algorithm that asymptotically converges to the optimal solution. To this end, a linear optimization (LO) problem is formulated, based on the trust-region approach, to find a "good" feasible solution and approximate the problem from below. Another LO problem is designed using piecewise linear relaxations to approximate the optimization problem from above. Then, we develop a new branching method to tighten the optimality gap.
- 2020-08-24 first online, published, posted
organizationsEindhoven University of Technology, Department of Industrial Engineering & Innovation Sciences, Operations, Planning, Accounting, and Control
DATA - not available
Data is undisclosed.