A MILP Model for Revenue Optimization of a Compressed Air Energy Storage Plant with Electrolysis

Energy storage, both short- and long-term, will play a vital role in the energy system of the future. One storage technology that provides high power and capacity and that can be operated without carbon emissions is compressed air energy storage (CAES). However, it is widely assumed that CAES plants are not economically feasible. In this context, a mixed-integer linear programming (MILP) model of the Huntorf CAES plant was developed for revenue maximization when participating in the day-ahead market and the minute-reserve market in Germany. The plant model included various plant variations (increased power and storage capacity, recuperation) and a water electrolyzer to produce hydrogen to be used in the combustion chamber of the CAES plant. The MILP model was applied to four use cases that represent a market-orientated operation of the plant. The objective was the maximization of revenue with regard to price spreads and operating costs. To simulate forecast uncertainties of the market prices, a rolling horizon approach was implemented. The resulting revenues ranged between EUR 0.5 Mio and EUR 7 Mio per year and suggested that an economically sound operation of the storage plant is possible.

Managing Uncertain Capacities for Network Revenue Optimization

Problem definition: We study the problem of managing uncertain capacities for revenue optimization over a network of resources. The uncertainty could be due to (i) the need to reallocate initial capacities among resources or (ii) the random availability of physical capacities by the time of service execution. Academic/practical relevance: The analyzed control policy is aligned with the current industry practice, with a virtual capacity and a bid price associated with each network resource. The seller collects revenues from an arriving stream of customers. Admitted requests that cannot be accommodated within the final, effective capacities incur a penalty cost. The objective is to maximize the total cumulative net revenue (sales revenue minus penalty cost). The problem arises in practice, for instance, when airlines are subject to last-minute change of aircrafts and in cargo revenue management where the capacity left by the passengers’ load is used for freight. Methodology: We present a stochastic dynamic programming formulation for this problem and propose a stochastic gradient algorithm to approximately solve it. All limit points of our algorithm are stationary points of the approximate expected net revenue function. Results: Through an exhaustive numerical study, we show that our controls are computed efficiently and deliver revenues that are almost consistently higher than the ones obtained from benchmarks based on the widely adopted deterministic linear programming model. Managerial implications: We obtain managerial insights about the impact of the timing of the capacity uncertainty clearance, the capacity heterogeneity, the network congestion, and the penalty for not being able to accommodate the previously accepted demand. Our approach tends to offer the best performance across different parameterizations of the problem.

Miner revenue optimization algorithm based on Pareto artificial bee colony in blockchain network

In order to improve the revenue of attacking mining pools and miners under block withholding attack, we propose the miner revenue optimization algorithm (MROA) based on Pareto artificial bee colony in blockchain network. MROA establishes the revenue optimization model of each attacking mining pool and revenue optimization model of entire attacking mining pools under block withholding attack with the mathematical formulas such as attacking mining pool selection, effective computing power, mining cost and revenue. Then, MROA solves the model by using the modified artificial bee colony algorithm based on the Pareto method. Namely, the employed bee operations include evaluation value calculation, selection probability calculation, crossover operation, mutation operation and Pareto dominance method, and can update each food source. The onlooker bee operations include confirmation probability calculation, crowding degree calculation, neighborhood crossover operation, neighborhood mutation operation and Pareto dominance method, and can find the optimal food source in multidimensional space with smaller distribution density. The scout bee operations delete the local optimal food source that cannot produce new food sources to ensure the diversity of solutions. The simulation results show that no matter how the number of attacking mining pools and the number of miners change, MROA can find a reasonable miner work plan for each attacking mining pool, which increases minimum revenue, average revenue and the evaluation value of optimal solution, and reduces the spacing value and variance of revenue solution set. MROA outperforms the state of the arts such as ABC, NSGA2 and MOPSO.

Preference-Based Revenue Optimization for App-Based Lifestyle Membership Plans

The demand for a product is rooted in the consumers’ needs and preferences. Therefore, a pricing optimization model will be more valid if the demand function is represented under this basic notion. A preference-based revenue optimization model for an app-based lifestyle membership program is developed and solved in this research. The model considers competitor products and cannibalization effect from products in other fare-class, where both are incorporated using a preference-based demand function. The demand function was derived through a randomized first choice simulation that converts individual utility values into personal choices based on the random parameter logit model. Cannibalizing products are considered as competing products in the simulation scenario. In the pricing optimization, two and three fare classes based on the membership period are considered. The corresponding pricing optimization problem is a mixed-integer nonlinear programming problem with a solution-dependent objective function. Using enumeration, the three-fare-class optimal prices of Rp420,000, Rp300,000, and Rp60,000 for 12-month, 6-month, and 1-month membership, respectively, are better than those of the two-fare-class. Under this policy, the estimated total revenue is Rp30.56 billion, 41.74% greater than that of the current condition.