A fluid approximation for the single-leg fare allocation problem with nonhomogeneous poisson demand

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dc.authoridKundakcioğlu, O. Erhun/0000-0003-3033-0986en_US
dc.contributor.authorKorkmaz, Selçuk
dc.contributor.authorKundakcioğlu, O. Erhun
dc.contributor.authorSivrikaya, Orhan
dc.date.accessioned2024-07-12T21:37:42Z
dc.date.available2024-07-12T21:37:42Z
dc.date.issued2022en_US
dc.department[Belirlenecek]en_US
dc.description.abstractFare allocation for legs and O&D pairs plays a crucial role in airline revenue management. Despite a large number of dynamic pricing studies, there are only a few widely adopted studies in which assumptions affect most tactical decisions with potentially large impacts on airline profitability. These decisions involve approximating future pricing schemes, allocation of fare classes, and setting booking limits. We propose a fare allocation model for a single leg in the presence of a realistic nonhomogeneous Poisson demand with an increasing rate. We aim to compute when and how to markup the price for an airfare product (switch to an upper fare class) to maximize the expected revenue. We study a fluid approximation of the underlying stochastic problem considering independent demand from each customer segment and examine different properties that lead to several important insights. Finally, we propose a dynamic look-ahead pricing scheme to compare our fluid approximation results against the well-known EMSRb heuristic and a dynamic programming solution on randomly generated booking request data. Numerical examples illustrate the effectiveness of our proposed approach.en_US
dc.identifier.doi10.1057/s41272-021-00284-4
dc.identifier.endpage96en_US
dc.identifier.issn1476-6930
dc.identifier.issn1477-657X
dc.identifier.issue1en_US
dc.identifier.scopus2-s2.0-85101712066en_US
dc.identifier.scopusqualityQ2en_US
dc.identifier.startpage81en_US
dc.identifier.urihttps://doi.org/10.1057/s41272-021-00284-4
dc.identifier.urihttps://hdl.handle.net/20.500.12415/6895
dc.identifier.volume21en_US
dc.identifier.wosWOS:000622677300003en_US
dc.identifier.wosqualityN/Aen_US
dc.indekslendigikaynakWeb of Science
dc.indekslendigikaynakScopus
dc.language.isoenen_US
dc.publisherPalgrave Macmillan Ltden_US
dc.relation.ispartofJournal of Revenue And Pricing Managementen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/closedAccessen_US
dc.snmzKY04237
dc.subjectRevenue Managementen_US
dc.subjectAirline Operationsen_US
dc.subjectInventory Allocationen_US
dc.subjectNonhomogeneous Poisson Processen_US
dc.titleA fluid approximation for the single-leg fare allocation problem with nonhomogeneous poisson demanden_US
dc.typeArticle
dspace.entity.typePublication

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