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Developing an Efficient Solution Method Based on Dynamic Programming with Considering Nested and Cancelation in Revenue Management

Aliahmadi, Fatemeh | 2013

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 45391 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Modarres, Mohammad
  7. Abstract:
  8. In this thesis by considering airplane capacity as a perishable asset revenue management models are employed for capacity allocation to customer different class. The thesis contains two main revenue management models. In the first one, single leg capacity allocation with overbooking, cancellation no-show and sell up is studied. The main contribution of this model is considering sell up or nested associated with other assumption. This problem is formulated as a dynamic programming model. Optimal policy and optimal seat allocation in case of overbooking is also determined. Contrary to what is assumed, it is shown that the income of lower fare class is more than accepting higher class.In this situation, booking limit is not monotonic and numerical esults show that in many examples the revenue gains approximately 11% compared with an equivalent model omitting the effect of cancellation and no show and sell up.By considering this assumption the second model network capacity allocation problem is developed. The main contribution of this part is developing a decomposition algorithm for reduction problem and giving upper bound for expected revenue. Benefits of this model in comparison with similar existing methods are investigated through illustrative examples using monte carlo simulation .The sensitivity of objective function toward effective factors in environment is also studied
  9. Keywords:
  10. Revenue Management ; Capacity Allocation ; Optimal Policy ; Dynamic Programming ; Parsing Algorithms ; Overbooking ; Sell-Up

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