Stochastic programming for multiple-leg network revenue management

Sanne de Boer, Richard Freling and Nanda Piersma

No EI 9935/A, Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: Airline seat inventory control is a very profitable tool in the airline industry. Mathematical programming models provide booking limits or bid-prices for all itineraries and fare classes based on demand forecasts. But the actual revenue generated in the booking process fails to meet expectations. Simple deterministic models based on expected demand generate better revenue than more advanced probabilistic models. Recently suggested models put even more effort into demand forecasting. We will show that the dynamic booking process rather than the demand forecasts needs to be addressed. In particular the nesting strategies applied in booking control will counter-effect the profitability of advanced estimation of booking limits and bid-prices.

Keywords: mathematical programming; revenue management; simulation (search for similar items in EconPapers)
Date: 1999-09-07
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://repub.eur.nl/pub/1604/feweco19990907115746.pdf (application/pdf)

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:ems:eureir:1604

Access Statistics for this paper

More papers in Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute Contact information at EDIRC.
Bibliographic data for series maintained by RePub ( this e-mail address is bad, please contact ).