A robust optimization model for BTO manufacturing revenue management

Based on revenue management, the pricing and capacity allocation problem for build-to-order (BTO) manufacturing industry is studied quantitatively under the influence of the Internet and e-commerce. Firstly, a joint pricing and capacity allocation model is proposed based on the analysis of the characteristics for BTO manufacturing revenue management. Then, due to the demand uncertainty, a robust optimization model is proposed to solve the model. Finally, a case study is formulated via simulations. The results illustrate the effectiveness of the model and provide several managerial insights into the performance of revenue management in BTO manufacturing.