An approximate algorithm for the two-dimensional air cargo revenue management problem

For the air cargo revenue management problem, this study developed a solution algorithm based on approximating the expected revenue function in the dynamic programming (DP) model while taking into account the stochastic volume and weight of shipments. In order to alleviate the computational load, th...

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Bibliographic Details
Published in:Transportation research. Part E, Logistics and transportation review Vol. 46; no. 3; pp. 426 - 435
Main Authors: Huang, Kuancheng, Chang, Ko-chen
Format: Journal Article
Language:English
Published: Exeter Elsevier India Pvt Ltd 01.05.2010
Elsevier
Elsevier Sequoia S.A
Series:Transportation Research Part E: Logistics and Transportation Review
Subjects:
Air cargo
Air cargo Revenue management Dynamic programming Heuristics
Algorithms
Approximation
Cargos
Dynamic programming
Heuristics
Management
Mathematical analysis
Mathematical models
Revenue management
Revenues
Simulation
Stochastic models
Studies
Transportation
Revenue management
Air cargo
Dynamic programming
Heuristics
ISSN:1366-5545, 1878-5794
Online Access:Get full text
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Summary:For the air cargo revenue management problem, this study developed a solution algorithm based on approximating the expected revenue function in the dynamic programming (DP) model while taking into account the stochastic volume and weight of shipments. In order to alleviate the computational load, the approximation was achieved by computing only a limited number of points in the DP state space. In the simulation experiment, the developed algorithm was compared with a recent heuristic algorithm based on de-coupling the relationship between weight and volume. It was found that the approach of this study can generate higher revenue than the de-coupling control for most of the cases.
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ISSN:1366-5545
1878-5794
DOI:10.1016/j.tre.2009.09.003