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Permalink Reply by Joseph Foutz on November 11, 2009 at 2:35pm

Both FrontLine Systems and Lindo Systems make solvers with no restrictions on the number of decision variables. I used Lindo's Lingo in school and liked the syntax, though FrontLine has some stuff that is perhaps a little more cutting edge.

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Permalink Reply by Yi-Chun Tsai on November 11, 2009 at 2:49pm

Hi,
Thanks. I was thinking about either CPLEX or XPRESS which are considered the gold standard in MIP problem.

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Permalink Reply by Joseph Foutz on November 11, 2009 at 3:15pm

I'd take FrontLine's XPRESS over IBM's CPLEX. Personal choice. A variety of reasons, though a standout is that XPRESS will probably solve faster that CPLEX. I don't have any experience with very large problems like this, but I do have experience with small problems that seem to take forever to solve, so speed should be an important factor in your decision.

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Permalink Reply by Larry on November 12, 2009 at 10:44am

Have you tried using GLPK. It just might work.

http://www.gnu.org/software/glpk/

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Permalink Reply by Yi-Chun Tsai on November 12, 2009 at 10:58am

Hi, Larry:
Thanks Larry. I think our company would like to have a established, commercial package that has been used by other companies, not a experimental software. The reason is that I may not be able to prove if a solution is optimal or not.
By the way, do you know any application of optimization in product pricing? I believe it is under revenue optimization but I don't know how and where to start pricing optimization.

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Permalink Reply by Sarat Patro on November 24, 2009 at 10:50pm

Hi,

Yes Pricing Optimization falls under the broad category of reveue optimization which also covers yield managewment as in the case of services prcing such as airlines ticket pricing, hotel room rent pricing etc.


Pls refer the following books :

Pricing and Revenue Optimization by Robert Phillips

The theory and practice of revenue management By Kalyan T. Talluri, Garrett Van Ryzin

We have solved a fairly large scale price optimization problem using SAS OR Release 9.2.

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Permalink Reply by Yi-Chun Tsai on November 25, 2009 at 7:41am

Hi, Sarat:
Thanks. I actually had several email exchanges with the author Rober Phillips regarding his book and according to what he said, I can't just buy his book and start implementing pricing optimization. The reason, according to him, is that the book does not discuss price elasticity of demand which should be part of this whole process. Does the other book have that topic? How did you deal with cross price elasticity of demand in your solution? Thanks.

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Permalink Reply by Sarat Patro on December 14, 2009 at 10:53pm

Hi,

You are right about price elasticity as a building blcok on which optimizations rests. the standard industry practice is to build a log linear model to capture price elasticity. You can refer to articles from either ACNielsen or IRO who develop models for Retail & CPG clients.

Pls refer the following article esp the section on pricing for the same.

let me know how goes this.

Best of luck..

Sarat

Attachments:

• commercial_use.pdf, 171 KB

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