Fluid arrivals simulation for choice network revenue management
Thibault Barbier (),
Miguel Anjos (),
Fabien Cirinei () and
Gilles Savard ()
Additional contact information
Thibault Barbier: Ecole Polytechnique Montreal
Miguel Anjos: Ecole Polytechnique Montreal
Fabien Cirinei: ExPretio Technologies
Gilles Savard: Ecole Polytechnique Montreal
Journal of Revenue and Pricing Management, 2019, vol. 18, issue 2, 164-180
Abstract Since the beginning of revenue management, simulation has been used to estimate the expected revenue resulting from an availability policy. It has also been used to verify the quality of forecasts by projecting them onto past availability policies. Recently, it has been used in simulation-based optimization approaches to find the best policy. Simulation thus has a central role in revenue management. We focus on the choice network revenue management (CNRM) problem that incorporates multiple resources and customer behavior. The traditional CNRM simulation is based on discrete customer arrivals; we propose a new approach based on fluid arrivals. Our estimator is biased, but we observe that the bias is often insignificant in practice and appears to be asymptotically null. Our approach consistently outperforms the traditional simulation in terms of estimation time and is thus a better choice for large instances. We also prove that it is equivalent to an approximation for the CNRM availability policy optimization problem. This equivalence limits the value of simulation-based optimization methods but allows us to propose heuristics to rapidly support the optimization.
Keywords: Revenue management; Fluid arrivals simulation; Choice behavior; Availability control; Simulation-based optimization (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1057/s41272-018-00172-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pal:jorapm:v:18:y:2019:i:2:d:10.1057_s41272-018-00172-4
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of Revenue and Pricing Management is currently edited by Ian Yeoman
More articles in Journal of Revenue and Pricing Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla ().