Air Cargo Revenue Management in Variable Operating Conditions of Capacity, Considering the Possibility of Double Booking

Document Type: Research Paper

Authors

Faculty of Industrial and Systems Engineering, Tarbiat Modares University, Tehran, Iran

Abstract

Revenue Management (RM) is a subfield of operations research that aims at maximizing revenues acquired by selling perishable products/services in a specified period. Due to the substantial growth in air cargo industry over the past few years, some techniques are needed to maximize revenue. In this paper, space allocation problem in two cases including overbooking possibility and impossibility are studied. Since the proposed dynamic programming needs much memory for obtaining exact solution, three heuristics including deterministic integer linear programming (DILP), bid price (BP) and dynamic programming decomposition (DPD) are proposed. Results show that BP and DILP performance is better than other approaches. In addition, results show that when overbooking is possible, it leads to revenue increment by more than 10 percent.

Keywords


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