The Role of Robust Optimization in Single-Leg Airline Revenue Management
In this paper, we introduce robust versions of the classical static and dynamic single-leg seat allocation models. These robust models take into account the inaccurate estimates of the underlying probability distributions. As observed by simulation experiments, it turns out that for these robust versions the variability compared to their classical counterparts is considerably reduced with a negligible decrease in average revenue.
|Keywords||airlines, dynamic models, management science, revenue management, robust optimization, simulation methods, single-lac models, static models|
|Persistent URL||dx.doi.org/10.1287/mnsc.1070.0843, hdl.handle.net/1765/16323|
|Series||ERIM Top-Core Articles , Econometric Institute Reprint Series|
Birbil, S.I, Frenk, J.B.G, Gromicho, J.A.S, & Zhang, J. (2009). The Role of Robust Optimization in Single-Leg Airline Revenue Management. Management Science, 55(1), 148–163. doi:10.1287/mnsc.1070.0843