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

Date

2020-01-01

Author

Selçuk, Ahmet Melih
Avşar, Zeynep Müge

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© 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.

Subject Keywords

General Engineering, General Computer Science

URI

https://hdl.handle.net/11511/69634

Journal

Computers and Industrial Engineering

DOI

https://doi.org/10.1016/j.cie.2020.106930

Collections

Department of Industrial Engineering, Article

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Citation Formats

A. M. Selçuk and Z. M. Avşar, “Approximation of sell-out probability to estimate expected marginal value of capacity,” Computers and Industrial Engineering, pp. 0–0, 2020, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/69634.