On the robustness of the network-based revenue opportunity model

On the robustness of the network-based revenue opportunity model

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Article ID: iaor20105731
Volume: 9
Issue: 4
Start Page Number: 341
End Page Number: 355
Publication Date: Aug 2010
Journal: Journal of Revenue and Pricing Management
Authors: , ,
Abstract:

The revenue opportunity model (ROM) is a widely known method for measuring revenue management (RM) performance. While adapting the ROM to recent developments of RM science, the question of applicability and in particular the validity of the ROM became increasingly important. In this article, we introduce a novel simulation-based approach to measure the robustness of the ROM against errors in the input data. We also test the robustness of the network-based ROM for airline RM with independent demand on realistic data and present computational results.

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