Dynamic Network Yield Management

The general dynamic network yield management problem is studied in the context of airline operations. We assume that booking requests on the itineraries follow independent inhomogeneous Poisson processes along the time prior to departure. The yield management policy dynamically determines acceptance or rejection of the booking requests from each itinerary on the network in order to maximize the total expected revenue. The necessity and sufficiency conditions of the optimal policy are examined. These conditions determine the pivotal points when policy changes take place. An optimal solution is proposed. We show that the threshold policy in which open and closed statuses of a fare class alternate is a solution structure general to the dynamic network yield management problem. Particularly, this study shows that the single leg case, which has been successfully solved, is a special case of the general network problem. In addition, enabled by the optimal solution, we gain many insights through example for the first time.

Record URL:
Availability:
- Find a library where document is available. Order URL: http://worldcat.org/issn/01912615
Supplemental Notes:
- Abstract reprinted with permission from Elsevier
Authors:
- Wang, Xiubin
- Wang, Fenghuan
Publication Date: 2007

Language

English

Media Info

Media Type: Print
Features: Figures; References; Tables;
Pagination: pp 410-425
Serial:
- Transportation Research Part B: Methodological
- Volume: 41B
- Issue Number: 4
- Publisher: Elsevier
- ISSN: 0191-2615
- Serial URL: http://www.sciencedirect.com/science/journal/01912615

Subject/Index Terms

TRT Terms: Airlines; Departure time; Dynamic programming; Fares; Inventory control; Itinerary; Network analysis (Planning); Poisson distributions; Policy; Reservation systems; Revenues; Seats; Yield management
Subject Areas: Aviation; Finance; Policy;

Filing Info

Accession Number: 01045272
Record Type: Publication
Files: TRIS
Created Date: Mar 14 2007 7:17PM