Jonas Rauch

Ravi Kumar, Shahin Boluki, Karl Isler et al.

We consider the problem of dynamic pricing of a product in the presence of feature-dependent price sensitivity. Developing practical algorithms that can estimate price elasticities robustly, especially when information about no purchases (losses) is not available, to drive such automated pricing systems is a challenge faced by many industries. Based on the Poisson semi-parametric approach, we construct a flexible yet interpretable demand model where the price related part is parametric while the remaining (nuisance) part of the model is non-parametric and can be modeled via sophisticated machine learning (ML) techniques. The estimation of price-sensitivity parameters of this model via direct one-stage regression techniques may lead to biased estimates due to regularization. To address this concern, we propose a two-stage estimation methodology which makes the estimation of the price-sensitivity parameters robust to biases in the estimators of the nuisance parameters of the model. In the first-stage we construct estimators of observed purchases and prices given the feature vector using sophisticated ML estimators such as deep neural networks. Utilizing the estimators from the first-stage, in the second-stage we leverage a Bayesian dynamic generalized linear model to estimate the price-sensitivity parameters. We test the performance of the proposed estimation schemes on simulated and real sales transaction data from the Airline industry. Our numerical studies demonstrate that our proposed two-stage approach reduces the estimation error in price-sensitivity parameters from 25\% to 4\% in realistic simulation settings. The two-stage estimation techniques proposed in this work allows practitioners to leverage modern ML techniques to robustly estimate price-sensitivities while still maintaining interpretability and allowing ease of validation of its various constituent parts.

Ezgi C. Eren, Zhaoyang Zhang, Jonas Rauch et al.

Traditional revenue management relies on long and stable historical data and predictable demand patterns. However, meeting those requirements is not always possible. Many industries face demand volatility on an ongoing basis, an example would be air cargo which has much shorter booking horizon with highly variable batch arrivals. Even for passenger airlines where revenue management (RM) is well-established, reacting to external shocks is a well-known challenge that requires user monitoring and manual intervention. Moreover, traditional RM comes with strict data requirements including historical bookings and pricing even in the absence of any bookings, spanning multiple years. For companies that have not established a practice in RM, that type of extensive data is usually not available. We present a data-driven approach to RM which eliminates the need for demand forecasting and optimization techniques. We develop a methodology to generate bid prices using historical booking data only. Our approach is an ex-post greedy heuristic to estimate proxies for marginal opportunity costs as a function of remaining capacity and time-to-departure solely based on historical booking data. We utilize a neural network algorithm to project bid price estimations into the future. We conduct an extensive simulation study where we measure performance of our methodology compared to that of an optimally generated bid price using dynamic programming (DP). We also extend our simulations to measure performance of both data-driven and DP generated bid prices under the presence of demand misspecification. Our results show that our data-driven methodology stays near a theoretical optimum (<1% revenue gap) for a wide-range of settings, whereas DP deviates more significantly from the optimal as the magnitude of misspecification is increased. This highlights the robustness of our data-driven approach.

Daniel Bogdoll, Johannes Jestram, Jonas Rauch et al.

In the foreseeable future, autonomous vehicles will require human assistance in situations they can not resolve on their own. In such scenarios, remote assistance from a human can provide the required input for the vehicle to continue its operation. Typical sensors used in autonomous vehicles include camera and lidar sensors. Due to the massive volume of sensor data that must be sent in real-time, highly efficient data compression is elementary to prevent an overload of network infrastructure. Sensor data compression using deep generative neural networks has been shown to outperform traditional compression approaches for both image and lidar data, regarding compression rate as well as reconstruction quality. However, there is a lack of research about the performance of generative-neural-network-based compression algorithms for remote assistance. In order to gain insights into the feasibility of deep generative models for usage in remote assistance, we evaluate state-of-the-art algorithms regarding their applicability and identify potential weaknesses. Further, we implement an online pipeline for processing sensor data and demonstrate its performance for remote assistance using the CARLA simulator.