An Integrated Approach to Single-Leg Airline Revenue Management: The Role of Robust Optimization
2006-06-10
Research Paper
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Published by
Rotterdam School of Management (RSM) Erasmus University, Erasmus Research Institute of Management (ERIM)
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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
Classifications using
Journal of Economic Literature (JEL) Classification System
- C61 : Optimization Techniques; Programming Models; Dynamic Analysis
- L93 : Air Transportation
- M : Business Administration and Business Economics; Marketing; Accounting
- R4 : Transportation Systems
- M11 : Production Management
Automatically Extracted Terms
- model
- jt +1
- class
- revenue
- 1 t t
- simulation
- information
- fare classes
- problem
- vector
- value
- probability
- fare class i
- demand
- 1 i m
- function
- non-robust
- algorithm
- management
- distribution
