01589960

Component

Revenue management is a collection of methods and techniques with the objective in maximizing the revenue of selling perishable products. Since a plane ticket loses its value after departure, it is assumed as a perishable product. Dynamic models, provide an optimal sales policy with the objective in maximizing the revenue by considering demand forecasting. Due to the uncertainty inherent in demand forecasting, there’s always a risk embedded in revenue management techniques. In this article, a dynamic model is introduced various risk levels are defined and allows the decision-makers to choose the risk level. In order to define this risk levels, this study applies vector forms the arrays of their components are related to the risk-aversion in fare classes where each component is related to risk aversion of one fare class. Based on the results obtained from the carried-out computer simulation, the values for the Sharp ratio, is computed for different risk levels and the optimal risk level is determined. In order to prove the superiority of this proposed model, the obtained results are compared with those of considering the risk level as a compromise factor for the whole model.

This paper was sponsored by TRB committee AV040 Standing Committee on Aviation Economics and Forecasting. Alternate title: Dynamic Model of Airlines Revenue Management by Considering Risk and Allowing Batch Booking.

01584066

16-2991

English

11p

2016

Transportation Research Board 95th Annual Meeting

Digital/other

References; Tables

Airlines; Dynamic models; Risk; Travel demand; Yield management

Aviation; Finance; Planning and Forecasting; I10: Economics and Administration; I72: Traffic and Transport Planning

Transportation Research Board Annual Meeting 2016 Paper #16-2991

TRIS, TRB, ATRI

Jan 12 2016 5:20PM