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A cabin capacity allocation model for revenue management in the cruise industry

Daniel Sturm () and Kathrin Fischer ()
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Daniel Sturm: Hamburg University of Technology
Kathrin Fischer: Hamburg University of Technology

Journal of Revenue and Pricing Management, 2019, vol. 18, issue 6, 441-450

Abstract: Abstract The cruise industry is a profitable field for the application of revenue management methods. Existing model formulations for booking limit determination usually assume that the different elements of booking requests are independent. In this work, it is shown that this approach can lead to non-feasible capacity allocations, which consequently are neither optimal nor applicable in practical planning situations. Therefore, a new improved integer linear model formulation is developed here which by explicitly assigning booking requests to cabins derives a feasible and revenue-maximizing capacity allocation. The model and its results are illustrated with a real-world sized case study.

Keywords: Revenue management; Capacity allocation; Cruise industry; Simulation (search for similar items in EconPapers)
Date: 2019
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