Network capacity control under a nonparametric demand choice model

This paper addresses a dynamic resource allocation problem which has its roots in airline revenue management, and where customers select the available product that ranks highest on a preset list of preferences. The problem is formulated as a flexible mathematical program that can easily embed technical and practical constraints, as well as accommodate hybrid (parametric-nonparametric) choice models. We propose for its solution a column generation algorithm whose performance, both in terms of solution quality and processing time, is assessed against that of alternative approaches.