Itinerary-based nesting control with upsell

作     者：Pun, Chan Seng Klabjan, Diego Karaesmen, Fikri Shebalov, Sergey 

作者机构：Northwestern Univ Evanston IL 60208 USA Sabre Holdings Southlake TX USA Koc Univ Istanbul Turkey 

出 版 物：《JOURNAL OF REVENUE AND PRICING MANAGEMENT》 (收益与定价管理杂志)

年 卷 期：2016年第15卷第2期

页      面：107-137页

学科分类：0202[经济学-应用经济学] 02[经济学] 1202[管理学-工商管理] 

主　　题：network revenue management capacity nesting customer upsell approximate dynamic programming 

摘      要：In order to accept future high-yield booking requests, airlines protect seats from low-yield passengers. More seats may be reserved when passengers faced with closed fare classes can upsell to open higher fare classes. We address the airline revenue management problem with capacity nesting and customer upsell, and formulate this problem by a stochastic optimization model to determine a set of static protection levels for each itinerary. We apply an approximate dynamic programming framework to approximate the objective function by piecewise linear functions, whose slopes (marginal revenue) are iteratively updated and returned by an efficient heuristic that simultaneous handles both nesting and upsells. The resulting allocation policy is tested over a real airline network and benchmarked against the randomized linear programming bid-price policy under various demand settings. Simulation results suggest that the proposed allocation policy significantly outperforms when incremental demand or upsell probability are high. Structural analyses are also provided for special demand dependence cases.