A simulation analysis for the re-solving issue of the network revenue management problem

Kuan-cheng Huang*, Chia Yi Lin

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

The classic dynamic programming approach is not applicable to the airline network revenue management (RM) problem of a practical size due to the curse of dimensionality. Many heuristic methods, including the most popular bid-price control approach, generate the approximate control decisions based on various static formulations, which need to be re-solved to take into account the dynamic features of the problem. By a simulation experiment, this study examines the re-solving issue of the bid-price method and tests a new method, the parameterized function approach, in which no problem-resolving is required. Based on the results, the parameterized function approach is found to be a promising alternative. As for the bid-price control approach, a high re-solving frequency is needed for a good result.

Original languageEnglish
Pages (from-to)36-42
Number of pages7
JournalJournal of Air Transport Management
Volume38
DOIs
StatePublished - 1 Jan 2014

Keywords

  • Network revenue management
  • Re-solving issue
  • Seat inventory control
  • Simulation

Fingerprint Dive into the research topics of 'A simulation analysis for the re-solving issue of the network revenue management problem'. Together they form a unique fingerprint.

Cite this