Transportation revenue management

  • Kallehauge, Brian (Project Manager)

    Project Details


    The purpose of this research project is to develop new and improved optimization models and algorithms within the area of revenue management (RM) in transportation.

    The project is funded by the Danish Research Council for Technology and Production Sciences under research grant 274-06-0244.

    In this project we are concerned only with schedule-based transportation, i.e. transportation networks where service is available only at designated times. The transportation service is not available after its designated time and cannot be stored, i.e. the service is perishable. Another characteristic of the means of transportation we are considering is that the capacity is fixed, e.g. number of seats in an aircraft or number of slots in a container vessel.

    The breakthrough in RM came in the airline industry when it was recognized by an airline company that they produced seats at a marginal cost near zero because most of the costs of a flight are fixed. The objective of the transportation firm is therefore to minimize the amount of available capacity at the start of service. The capacity control problem is concerned with the optimal allocation of capacity to different classes of demand that occurs over time.

    A complicating factor related to the capacity control problem is the uncertainty of the demand forecasts. Therefore, the capacity control problem needs to be re-optimized when the forecasts are changed. It is critical that the optimization of the capacity control problem is computationally efficient in order to be implementable in practice.

    This project is focused on two areas of RM where there has been relatively little research, i.e. the problem of handling batch bookings and the multiple-resource capacity control problem. The purpose of this project is also to extend the RM theory and methodology to container liner shipping.
    Effective start/end date01/09/200631/08/2009


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