A simulation analysis for the re-solving issue of the network revenue management problem

Kuancheng Huang and Chia-Yi Lin

Journal of Air Transport Management, 2014, vol. 38, issue C, 36-42

Abstract: The classic dynamic programming approach is not applicable to the airline network revenue management (RM) problem of a practical size due to the curse of dimensionality. Many heuristic methods, including the most popular bid-price control approach, generate the approximate control decisions based on various static formulations, which need to be re-solved to take into account the dynamic features of the problem. By a simulation experiment, this study examines the re-solving issue of the bid-price method and tests a new method, the parameterized function approach, in which no problem-resolving is required. Based on the results, the parameterized function approach is found to be a promising alternative. As for the bid-price control approach, a high re-solving frequency is needed for a good result.

Keywords: Network revenue management; Seat inventory control; Re-solving issue; Simulation (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0969699713001609
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:38:y:2014:i:c:p:36-42

DOI: 10.1016/j.jairtraman.2013.12.016

Access Statistics for this article

Journal of Air Transport Management is currently edited by Anne Graham

More articles in Journal of Air Transport Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().