A Decomposition-Based Algorithm for the Bid-Price Control Policy of the Airline Network RM Problem

• Main Author: 張雯瑋
• Other Authors: Kuan-cheng Huang
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/42780278918013395114

碩士 === 國立交通大學 === 運輸科技與管理學系 === 93 === Since airline deregulation in 1979, many airlines began to apply revenue management (RM) techniques. They have developed very complex and diverse fare classes to increase the revenue and, at the same time, to satisfy the demand of passengers. Seat inventory control for air network is the practice to allocate the seats of the flight legs among different passenger itineraries and fare classes. Nevertheless, the network problem with multiple legs is more complicated than the single-leg version. As an itinerary can involve to multiple resources, when making the seat inventory control decisions, focusing on an individual flight leg does not guarantee that the total revenue will be maximize across the entire network. In recent years, one of the most successful approaches for solving the airline network RM problem is the bid price control, in which the bid prices of the legs are used as a threshold to derive the accept-or-reject decisions. Based on the bid prices, the resulting policy accepts a booking request only if its fare is greater than the sum of the bid prices of the associated itinerary. The most difficult part of this approach is to determine the bid prices. We develop a decomposition-based algorithm of the airline network RM problem to find the bid price of each flight leg. As for the numerical experiment, the algorithm is applied to several small-scale network RM problems, for which the optimal solution can be found by dynamic programming. The expected revenues based on the bid price control are compared with the optimal values. In addition, the case of first-come-first-serve is tested to further evaluate the solution quality of this heuristic algorithm.