Resource capacity allocation to stochastic dynamic competitors:knapsack problem for perishable items and index-knapsack heuristic

Jacko, Peter (2016) Resource capacity allocation to stochastic dynamic competitors:knapsack problem for perishable items and index-knapsack heuristic. Annals of Operations Research, 241 (1). pp. 83-107. ISSN 0254-5330

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Abstract

In this paper we propose an approach for solving problems of optimal resource capacity allocation to a collection of stochastic dynamic competitors. In particular, we introduce the knapsack problem for perishable items, which concerns the optimal dynamic allocation of a limited knapsack to a collection of perishable or non-perishable items. We formulate the problem in the framework of Markov decision processes, we relax and decompose it, and we design a novel index-knapsack heuristic which generalizes the index rule and it is optimal in some specific instances. Such a heuristic bridges the gap between static/deterministic optimization and dynamic/stochastic optimization by stressing the connection between the classic knapsack problem and dynamic resource allocation. The performance of the proposed heuristic is evaluated in a systematic computational study, showing an exceptional near-optimality and a significant superiority over the index rule and over the benchmark earlier-deadline-first policy. Finally we extend our results to several related revenue management problems.

Item Type:
Journal Article
Journal or Publication Title:
Annals of Operations Research
Additional Information:
The final publication is available at Springer via http://dx.doi.org/10.1007/s10479-013-1312-9
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1800/1803
Subjects:
ID Code:
65371
Deposited By:
Deposited On:
26 Jun 2013 15:17
Refereed?:
Yes
Published?:
Published
Last Modified:
08 Aug 2020 03:25