Revenue management has been an excellent application of convex and non-convex optimization, which requires data analysis, problem formulation, model design, evaluation and testing afterwards.

Customer choice modelling plays an important role in revenue management, for its broad perspective in retail industry. With the advance of technology, the data that can be utilized for data analysis, thus developing a feasible customer choice model is drawing attention from many companies.

In this paper, the main topic is a real application of customer choice modeling to a new form of product. We’ll start the work from defining the problem, and then brief the preliminary work done around the data. And then, we’ll select a model and take approaches to analyze the data. Followed will be the evaluati...[ Read more ]

Revenue management has been an excellent application of convex and non-convex optimization, which requires data analysis, problem formulation, model design, evaluation and testing afterwards.

Customer choice modelling plays an important role in revenue management, for its broad perspective in retail industry. With the advance of technology, the data that can be utilized for data analysis, thus developing a feasible customer choice model is drawing attention from many companies.

In this paper, the main topic is a real application of customer choice modeling to a new form of product. We’ll start the work from defining the problem, and then brief the preliminary work done around the data. And then, we’ll select a model and take approaches to analyze the data. Followed will be the evaluation and validation of the models. At last, we’ll conclude the model performance, develop a solution to the original revenue management problem, and propose possible future work for the project.

Key words: data analysis, customers choice modelling, pricing strategy, logistic regression.