e-commerce and operations research in airline planning, marketing, and distribution

e-commerce and operations research in airline planning, marketing, and distribution

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Article ID: iaor20022083
Country: United States
Volume: 31
Issue: 2
Start Page Number: 37
End Page Number: 55
Publication Date: Mar 2001
Journal: Interfaces
Authors: , , ,
Keywords: transportation: general, transportation: air, e-commerce
Abstract:

Many e-commerce principles were pioneered in the airline industry. These include the first business-to-business electronic information exchange and industrywide electronic marketplace. This environment provided unprecedented opportunity for operations research modeling. By the mid-1980s airlines used customer shopping data to calibrate traveler-demand-and-choice models, analyzed multichannel product-distribution strategies with simulation, and practised dynamic pricing through yield management. Airlines continue to derive billions of dollars annually from these and derivative models. The availability of reliable, low-cost communications via the internet is providing new modeling challenges within the airline industry and is also providing similar opportunities in other industries.

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