Skip to content Skip to navigation
University of Warwick
  • Study
  • |
  • Research
  • |
  • Business
  • |
  • Alumni
  • |
  • News
  • |
  • About

University of Warwick
Publications service & WRAP

Highlight your research

  • WRAP
    • Home
    • Search WRAP
    • Browse by Warwick Author
    • Browse WRAP by Year
    • Browse WRAP by Subject
    • Browse WRAP by Department
    • Browse WRAP by Funder
    • Browse Theses by Department
  • Publications Service
    • Home
    • Search Publications Service
    • Browse by Warwick Author
    • Browse Publications service by Year
    • Browse Publications service by Subject
    • Browse Publications service by Department
    • Browse Publications service by Funder
  • Help & Advice
University of Warwick

The Library

  • Login
  • Admin

Delayed purchase options in single-leg revenue management

Tools
- Tools
+ Tools

Aydin, Nursen, Birbil, S. Ilker and Topaloglu, Huseyin (2017) Delayed purchase options in single-leg revenue management. Transportation science, 51 (4). 1031 -1045. doi:10.1287/trsc.2015.0643 ISSN 0041-1655.

[img]
Preview
PDF
WRAP_delayed_purchase.pdf - Accepted Version - Requires a PDF viewer.

Download (803Kb) | Preview
Official URL: http://dx.doi.org/10.1287/trsc.2015.0643

Request Changes to record.

Abstract

Many airline reservation systems offer the commitment option to their potential passengers. This option allows passengers to reserve a seat for a fixed duration before making a final purchase decision. In this study, we develop single-leg revenue management models that consider such contingent commitment decisions. We start with a dynamic programming model of this problem. This model is computationally intractable as it requires storing a multidimensional state space because of bookkeeping of the committed seats. To alleviate this difficulty, we propose an alternate dynamic programming formulation that uses an approximate model of how the contingent commitments behave and we show how to extract a capacity allocation policy from the approximate dynamic programming formulation. In addition, we present a deterministic linear programming model that gives an upper bound on the optimal expected revenue from the intractable dynamic programming model. As the problem size becomes large in terms of flight capacity and the expected number of arrivals, we demonstrate an asymptotic lower bound for the deterministic linear programming model. Our extensive numerical study indicates that offering commitment options can noticeably increase potential revenue even though offering a contingent commitment option may not always be in the best interest of the airline. Also, our results show that the proposed approximate dynamic programming model coordinates capacity allocation and commitment decisions quite well.

Item Type: Journal Article
Subjects: H Social Sciences > HE Transportation and Communications
T Technology > T Technology (General)
Divisions: Faculty of Social Sciences > Warwick Business School > Operational Research & Management Sciences
Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH): Airlines, Revenue management , Dynamic programming, Reservation systems
Journal or Publication Title: Transportation science
Publisher: INFORMS
ISSN: 0041-1655
Official Date: November 2017
Dates:
DateEvent
November 2017Published
29 February 2016Available
23 June 2015Accepted
February 2015Submitted
Volume: 51
Number: 4
Page Range: 1031 -1045
DOI: 10.1287/trsc.2015.0643
Status: Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access
Date of first compliant deposit: 15 July 2016
Date of first compliant Open Access: 1 March 2017

Request changes or add full text files to a record

Repository staff actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics

twitter

Email us: wrap@warwick.ac.uk
Contact Details
About Us