An Integrated Approach to Single-Leg Airline Revenue Management: The Role of Robust Optimization
In this paper we introduce robust versions of the classical static and dynamic single leg seat allocation models as analyzed by Wollmer, and Lautenbacher and Stidham, respectively. 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 counter parts is considerably reduced with a negligible decrease of average revenue.
|Keywords||Airline Revenue Management, Dynamic Models, Robust Optimization, Single-Leg Problems, Static Models|
|Publisher||Erasmus Research Institute of Management (ERIM)|
Birbil, S.I., Frenk, J.B.G., Gromicho, J.A.S., & Zhang, S.. (2006). An Integrated Approach to Single-Leg Airline Revenue Management: The Role of Robust Optimization (No. ERS-2006-023-LIS). ERIM report series research in management Erasmus Research Institute of Management. Erasmus Research Institute of Management (ERIM). Retrieved from http://hdl.handle.net/1765/7808