Revenue Management: New Features and Models

Kevin Pak (1977) obtained his Master’s degree in Econometrics and Operations Research from the Erasmus University Rotterdam in 2000. In the same year he joined ERIM in order to carry out his doctoral research on the subject of revenue management. Throughout the years his work has been published in and presented at a number of international journals and conferences. Currently, he applies his knowledge of operations research into practice as a consultant at ORTEC bv.

Revenue management is the art of selling a fixed and perishable capacity of a product to those customers that generate the highest revenue. In recent years, revenue management has gained a lot of attention among both academics and practitioners and has grown into one of the most successful applications of operations research. This thesis provides an overview of revenue management techniques presented throughout the literature. More importantly, new techniques are constructed for hotel, airline and cargo revenue management problems to account for new features such as a rolling horizon, convertible seats and unique booking requests. Mathematical, stochastic and dynamic programming techniques are used to construct solution techniques which are evaluated in a simulated environment chosen in correspondence with practitioners. The results provide useful insights for practitioners and can be used to further develop and extend current revenue management techniques.