The encyclopedia · Product & Design · Product decision · 2003–2004
SES Americom reconfigures satellite transponders by MIP to manage $2B in revenue
AMC-12's 24 reconfigurable transponders serve up to three markets each; an MIP-based system picked monthly configurations and now manages $2B in revenue.
SES Americom
The solution
SES Americom prepared to launch AMC-12 in early 2004, the first of a new generation of satellites with 24 highly flexible transponders — each able to serve up to three markets simultaneously.
Because configuration changed which markets got capacity, the company built a pricing- and contract-management system that tracked signed contracts and projected demand over the satellite's life, then recommended optimal transponder configurations each month.
The problem was modeled as a mixed-integer program with efficient heuristics, implemented in an Excel-based system with a Visual Basic interface. SES Americom used the system to manage over $2 billion in revenues and planned to adapt it for similar satellites.
Why it worked
- Monthly reconfiguration followed demand instead of locking coverage
- Signed contracts and projections made the model's objective concrete
- Heuristics made hard instances solvable in a spreadsheet
- Pricing and configuration were optimized as one decision
What can be applied
When a resource can be reshaped over time, price and configure it jointly: tracking contracts and re-solving the configuration each month beats fixing the satellite's coverage once at launch.
Aftermath
The approach was designed to carry to future satellites with the same flexible transponder technology, and the project later received recognition in INFORMS practice competitions.
Sources
- SES Americom Maximizes Satellite Revenues by Optimally Configuring Transponders
- SES Americom Maximizes Satellite Revenues by Optimally Configuring Transponders (abstract)
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