Korean Management Science Review (경영과학)

The Korean Operations Research and Management Science Society (한국경영과학회)
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Discrete Choice Dynamic Pricing and Seat Control Problem in Airlines

항공사 이산형 동적가격 결정 및 좌석통제 문제

  • 윤문길 (한국항공대학교 경영학과) ;
  • 이휘영 (인하공업전문대학 항공경영과) ;
  • 송윤숙 (대한항공 여객RM영업부)
  • Received : 2011.07.22
  • Accepted : 2012.05.18
  • Published : 2012.07.31
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Abstract

Revenue management problems originated in the 1970's in the context of the airline industry have been successfully introduced in airline industries. It has started on the capacity control by booking classes for available seats, and has been recognized as a powerful tool to maximize the total revenue. Changing customer behavior and airline market environments, however, has required a new mechanism for improving the revenue. Dynamic pricing is one of innovative tools which is to adjust prices according to the market status. In this paper, we consider a dynamic pricing and seat control problem for discrete time horizon. The problem can be modeled as a stochastic programming problem. Applying the linear approximation technique and given the price set for each time, we suggest a mixed Integer Programming model to solve our problem efficiently. From the simulation results, we can find our model makes good performance and can be expanded to other comprehensive problems.

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References

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