A network revenue management model with capacity allocation and overbooking

In this paper, based on the single-leg revenue management, we develop a network revenue management model to jointly make the capacity allocation and overbooking decisions. In our model, the factors such as no-show, late cancellation, and denied boarding are taken into account. Both no-show and late...

Full description

Saved in:
Bibliographic Details
Published in:Soft computing (Berlin, Germany) Vol. 23; no. 23; pp. 12833 - 12842
Main Authors: Mou, Deyi, Li, Wenzhen, Li, Jiayi
Format: Journal Article
Language:English
Published: Berlin/Heidelberg Springer Berlin Heidelberg 01.12.2019
Springer Nature B.V
Subjects:
Air fares
Airline operations
Airlines
Algorithms
Approximation
Artificial Intelligence
Cancellation
Computational Intelligence
Control
Decision making
Dynamic programming
Economic impact
Engineering
Integer programming
Inventory control
Luggage
Mathematical Logic and Foundations
Mathematical programming
Mechatronics
Methodologies and Application
Revenue
Revenue management
Robotics
Stochastic chance constrained integer programming
Uncertainty
Capacity allocation
Overbooking
Monte Carlo algorithm
Network revenue management
ISSN:1432-7643, 1433-7479
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In this paper, based on the single-leg revenue management, we develop a network revenue management model to jointly make the capacity allocation and overbooking decisions. In our model, the factors such as no-show, late cancellation, and denied boarding are taken into account. Both no-show and late cancellation have uncertainties. Therefore, we make use of a stochastic chance constrained integer programming to formulate the capacity allocation and overbooking problem. The model can be converted to determined integer programming to be solved by Monte Carlo algorithm. At last, in order to test the validity and feasibility of the model, we conduct computational experiments. We demonstrate that the model that is able to effectively avoid the economic loss by no-show, late cancellation or denied boarding, while keeping the expected revenue of airlines stable.
Bibliography:ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
content type line 14
ISSN:1432-7643
1433-7479
DOI:10.1007/s00500-019-03840-8