Research
The Chair of Analytics & Optimization conducts research which deals with decision problems arising in the areas of pricing & revenue management as well as smart logistics & mobility and can be solved using operations research.
Our goal is to build simple, practical, and realistic models that allow getting model input directly from the data. By designing computationally efficient methods that are both easy and scalable, we strive to generate interesting insights and bring significant value to practice.
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Regularly, we cooperate with industry partners like, amongst others, GLS, IBM, Sixt, TUI, and ZeppelinRental.
Choice-Based Optimization
Modeling preferences of market participants to capture the effects of choice behavior in various optimization models constitutes the foundation of all research activities at the chair. The actors mainly considered are customers requesting services, e.g., flights or deliveries, but in some settings also service providers like occasional drivers in a crowdshipping system.
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To segment these actors depending on their choice behavior and to specify mathematical models accordingly, different methods of data mining and machine learning are employed (e.g., clustering or preference learning). Depending on the research question, either static, deterministic or dynamic, stochastic models are developed.?In the case standard software cannot be applied efficiently, we also design specialized optimization algorithms. On the one hand, this includes state-of-the-art heuristics, e.g., evolutionary algorithms and adaptive large neighborhood search, on the other hand, algorithms based on approximate dynamic programming. The latter enable real-time decision support using artificial intelligence.
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Key Fields of Application
Pricing & Revenue Management
Revenue management comprises concepts and methods for the optimal configuration of sales processes of services and is applied by, e.g., airlines, car rental companies or hotels. Generally, the availability of products defined on services offered is controlled over time, so that demand can be adjusted to match the remaining levels of capacity. In contrast, the closely related concept of dynamic pricing aims to steer demand by varying prices over time.
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Smart Logistics & Mobility
Digital distribution channels are becoming increasingly important for logistics services. At the same time, the demand for such services is changing in both freight and passenger transportation. In urban areas, an enormous increase in the volume of freight makes the final stage of any fulfillment process, which is known as "last-mile delivery", a particular challenge. In rural areas, mobility-on-demand concepts offer the potential to efficiently pool the low demand, which is highly dispersed in time and space, while achieving a high quality of service. Designing and optimizing transportation activities of logistics providers in both areas is subject of the field of application “smart logistics and mobility”. This involves taking into account the existing infrastructure, environmental aspects such as greenhouse gas, pollutant and noise emissions, and also the changing patterns of customers' ordering and mobility behavior.
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