Approximation of sell-out probability to estimate expected marginal value of capacity


Selçuk A. M. , Avşar Z. M.

Computers and Industrial Engineering, 2020 (SCI Expanded İndekslerine Giren Dergi) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası:
  • Basım Tarihi: 2020
  • Doi Numarası: 10.1016/j.cie.2020.106930
  • Dergi Adı: Computers and Industrial Engineering

Özet

© 2020 Elsevier LtdIn this study, the dynamic pricing problem is considered for single-leg airline revenue management. The dynamic programming formulation given for this problem is expressed in terms of the expected marginal revenue of capacity. In order to make the formulation applicable in practice, approximations are proposed in this study for estimating the expected marginal revenue term. Numerical tests based on simulating the sales process show that the proposed approximations work well as compared to the exact dynamic programming model.