A Constraint Logic Programming Algorithm for Modeling Dynamic Pricing

We extend Lemke's algorithm to solve a dynamic pricing problem. We identify an instance in which Lemke's algorithm fails to converge to an optimal solution (when an optimum does exist) and propose a constraint logic programming solution to this problem. We analyze the complexity of the ext...

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Bibliographic Details
Published in:INFORMS journal on computing Vol. 20; no. 1; pp. 69 - 77
Main Author: Oliveira, Fernando S
Format: Journal Article
Language:English
Published: Linthicum INFORMS 2008
Institute for Operations Research and the Management Sciences
Subjects:
Algorithms
analysis of algorithms
Artificial intelligence
Business planning
Business plans
constraint logic programming
dynamic pricing
Logic programming
Revenue
revenue management
Simulation
Studies
ISSN:1091-9856, 1526-5528, 1091-9856
Online Access:Get full text
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Summary:We extend Lemke's algorithm to solve a dynamic pricing problem. We identify an instance in which Lemke's algorithm fails to converge to an optimal solution (when an optimum does exist) and propose a constraint logic programming solution to this problem. We analyze the complexity of the extended Lemke's algorithm. Our analysis shows that, in the short term, dynamic pricing can be used to improve resource management efficiency. It is also shown that dynamic pricing can be used to manage the long-term behavior of demand.
Bibliography:SourceType-Scholarly Journals-1
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ISSN:1091-9856
1526-5528
1091-9856
DOI:10.1287/ijoc.1060.0218