The impact of customer behavior models on revenue management systems

Shadi Azadeh (), M. Hosseinalifam () and G. Savard ()

Computational Management Science, 2015, vol. 12, issue 1, 99-109

Abstract: Revenue management (RM) can be considered an application of operations research in the transportation industry. For these service companies, it is a difficult task to adjust supply and demand. In order to maximize revenue, RM systems display demand behavior by using historical data. Usually, parametric methods are applied to estimate the probability of choosing a product at a given time. However, parameter estimation becomes challenging when we need to deal with constrained data. In this research, we evaluate the performance of a revenue management system when a non-parametric method for choice probability estimation is chosen. The outcomes of this method have been compared to the total expected revenue using synthetic data. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Revenue management; Parametric and non-parametric demand models; Customer choice behaviour (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s10287-014-0204-z

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