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Performance of Dynamic Programming methods in airline Revenue Management

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dc.contributor.advisor Peter Paul Belobaba. en_US
dc.contributor.author Diwan, Sarvee en_US
dc.contributor.other Massachusetts Institute of Technology. Operations Research Center. en_US
dc.date.accessioned 2011-03-07T15:15:48Z
dc.date.available 2011-03-07T15:15:48Z
dc.date.copyright 2010 en_US
dc.date.issued 2010 en_US
dc.identifier.uri http://hdl.handle.net/1721.1/61564
dc.description Thesis (S.M. in Transportation)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering; and, (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2010. en_US
dc.description Cataloged from PDF version of thesis. en_US
dc.description Includes bibliographical references (p. 159-163). en_US
dc.description.abstract This thesis evaluates the performance of Dynamic Programming (DP) models as applied to airline Revenue Management (RM) compared to traditional Revenue Management models like EMSRb as DP models offer a theoretically attractive alternative to traditional RM models. In the first part of this thesis, we develop a simplified simulator to evaluate the effects of changing demand variance on the performance of standard DP on a single flight leg. This simulator excludes the effects of forecast quality and competitive effects like passenger sell-up and inter-airline spill. In the next part of the thesis, we introduce two network based DP methods that incorporate the network displacement costs in the standard DP based optimizer and perform simulation experiments in a larger competitive network using the Passenger Origin Destination Simulator to study the performance of DP methods in airline Revenue Management systems. The results of single flight leg experiments from the simplified simulator show that DP methods do not consistently outperform EMSRb and the sensitivity analysis show that the performance of DP relative to EMSRb depends on the demand variability, demand factor, fare ratios and passenger arrival pattern. The results from the PODS competitive network simulations show that DP methods, despite not showing any significant benefits in the simplified simulator, can outperform EMSRb when used in a competitive environment because DP's aggressive seat protection policy helps DP generate more revenues than EMSRb due to competitive feedback effects like inter-airline passenger spill-in, and passenger sell-up within the airline. en_US
dc.description.statementofresponsibility by Sarvee Diwan. en_US
dc.format.extent 163 p. en_US
dc.language.iso eng en_US
dc.publisher Massachusetts Institute of Technology en_US
dc.rights M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. en_US
dc.rights.uri http://dspace.mit.edu/handle/1721.1/7582 en_US
dc.subject Civil and Environmental Engineering. en_US
dc.subject Operations Research Center. en_US
dc.title Performance of Dynamic Programming methods in airline Revenue Management en_US
dc.title.alternative Performance of DP methods in airline RM en_US
dc.type Thesis en_US
dc.description.degree S.M. en_US
dc.description.degree S.M.in Transportation en_US
dc.contributor.department Massachusetts Institute of Technology. Dept. of Civil and Environmental Engineering. en_US
dc.contributor.department Massachusetts Institute of Technology. Operations Research Center. en_US
dc.identifier.oclc 703219676 en_US


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