The Research on Ticket Fare Optimization for China’s High-Speed Train

Jinzi Zheng and Jun Liu

Mathematical Problems in Engineering, 2016, vol. 2016, 1-8

Abstract:

With the constant deepening of the railway reform in China, the competition between railway passenger transportation and other modes of passenger transportation has been getting fiercer. In this situation, the existing unitary and changeless fare structure gradually becomes the prevention of railway revenue increase and railway system development. This paper examines a new method for ticket fare optimization strategy based on the revenue management theory. On the premise that only one fare grade can be offered for each OD at the same time, this paper addresses the questions of how to determine the number of fare grades and the price of each fare grade. First, on the basis of piecewise pricing strategy, we build a ticket fare optimization model. After transforming this model to a convex program, we solve the original problem by finding the Kuhn-Tucker (K-T) point of the convex program. Finally, we verify the proposed method by real data of Beijing-Shanghai HSR line. The calculating result shows that our pricing strategy can not only increase the revenue, but also play a part in regulating the existing demand and stimulating potential demand.

Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnlmpe:5073053

DOI: 10.1155/2016/5073053

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