Question: ( LP - based Allocations and Bid - prices for Network RM; 1 6 points ) In this problem, we will implement the LP -
LPbased Allocations and Bidprices for Network RM; points In this problem, we will implement the LPbased approximation methods we studied in class to derive allocation decisions for a simple network. We want to sell tickets on two flights, Flight from San Francisco SFO to Detroit DIA and Flight from DIA to St Louis STL; a person flying from SFO to STL needs a seat on both flights. Consider selling tickets over time periods, with initial capacity of on Flight SFODIA and on Flight DIASTL The airlines offers a total of products. In particular, for each origindestination OD pair, there are two fare classes: class Y corresponding to the fullfare economy class ticket, and class M corresponding to the discountfare economy class ticket. In each period, the airlines gets at most one request for a particular product, where product j is requested with probability j The fares and perperiod request probabilities for the products are given in the following table. Product Class Total Fare Perperiod arrival probability SFODIA Y SFODIA M DIASTL Y DIASTL M SFODIASTL Y SFODIASTL M a point Let Dt be the number of timeperiods from t to in which no request arrived, and Dt j be the random demand for product j from t to What is the average value of D What about for Db points Let Vtx be the value function at beginning of period t with state x Write down a linear program that computes the fluid approximation V F luid and compute its value using iPythonExcelc points Compute the randomizedLP approximation V R using k samples using a Jupyter ipython notebook. Download your code as pdf via latex see Download as in the dropdown menu and attach it to your assignment submission. Compare V F luid with V R d points Write down the dual of the fluid approximation LP for computing V F luid and use it to compute shadow prices for each flightleg use either Excel or iPython Based on these, compute the bid prices for each product.
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