Multiproduct revenue management: An empirical study of Auto Train at Amtrak

This study involves working with Amtrak, the National Railroad Passenger Corporation, to develop a revenue management model. The Revenue Management Department at Amtrak provides the sales data of Auto Train, a service of Amtrak that allows passengers to bring their vehicles on the train. We analysed the demand from the sales data and built a mathematical model to develop a pricing system for Auto Train. An algorithm was developed to calculate the optimal pricing strategy that yields the maximum revenue. We further introduced three pricing policies Myopic policy, Static–Price heuristic, and Pseudo–Dynamic heuristics, as benchmarks for our dynamic programming solution. Because Auto Train is a real–world application of multiproduct revenue management, our findings make an important contribution to the revenue management literature.