An Integrated Approach to Single-Leg Airline Revenue Management: The Role of Robust Optimization

Ilker Birbil, Hans Frenk, Joaquim Gromicho and Shuzhong Zhang

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: In this paper we introduce robust versions of the classical static and dynamic single leg seat allocation models as analyzed by Wollmer, and Lautenbacher and Stidham, respectively. These robust models take into account the inaccurate estimates of the underlying probability distributions. As observed by simulation experiments it turns out that for these robust versions the variability compared to their classical counter parts is considerably reduced with a negligible decrease of average revenue.

Keywords: Airline Revenue Management; Dynamic Models; Robust Optimization; Single-Leg Problems; Static Models (search for similar items in EconPapers)
JEL-codes: C61 L93 M M11 R4 (search for similar items in EconPapers)
Date: 2006-06-10
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Persistent link: https://EconPapers.repec.org/RePEc:ems:eureri:7808

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