Modeling the Customer Arrival Process and Comparing Decision Rules in Perishable Asset Revenue Management Situations

A model for customer arrivals is presented that allows evaluation of different decision rules in perishable asset revenue management (PARM) situations. The model is used to derive probabilities necessary to operationalize the implementation of an optimal decision rule for PARM problems with diversio...

Full description

Saved in:
Bibliographic Details
Published in:Transportation science 1993-08, Vol.27 (3), p.239-251
Main Authors: Weatherford, Lawrence R, Bodily, Samuel E, Pfeifer, Phillip E
Format: Article
Language:English
Subjects:
Airlines
Asset management
Decision analysis
Discounts
Focus Section—The Airline Industry
Heuristics
Mathematical independent variables
Modeling
Parametric models
Perishables
Yield management
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:A model for customer arrivals is presented that allows evaluation of different decision rules in perishable asset revenue management (PARM) situations. The model is used to derive probabilities necessary to operationalize the implementation of an optimal decision rule for PARM problems with diversion and two price classes. Heuristic approaches are compared to the proper closing out of price classes to see how much of an improvement can be made in expected contribution. The sensitivity of the difference in expected contribution between these rules is tested relative to changes in the model's input parameters. Managerial insights are presented.
ISSN:0041-1655
1526-5447
DOI:10.1287/trsc.27.3.239