Bid-price behavior in network RM: Forecast decrementing and bid-price bounding

Bid-price behavior in network RM: Forecast decrementing and bid-price bounding

0.00 Avg rating0 Votes
Article ID: iaor20161169
Volume: 15
Issue: 2
Start Page Number: 95
End Page Number: 106
Publication Date: Apr 2016
Journal: Journal of Revenue and Pricing Management
Authors: ,
Keywords: marketing, behaviour, networks, scheduling, combinatorial optimization, forecasting: applications
Abstract:

This article investigates two practical concerns with bid‐price control origin–destination (OD) revenue management (RM) systems. First, we examine forecast decrementing methods for the common situation where demand forecast generation is decoupled from booking policy optimization. Second, we explore the impacts of two bounding schemes designed to eliminate bid price declines close to departure. Using the Passenger Origin–Destination Simulator (PODS), we find (i) more sophisticated forecast decrements increase revenue compared with the traditional approach when combined with advanced forecasting methods incorporating passenger willingness to pay and (ii) bid price bounds increase revenue with standard forecasting methods but decrease revenue with advanced forecasting methods.

Reviews

Required fields are marked *. Your email address will not be published.