A review of choice-based revenue management: Theory and methods

Abstract

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A review of revenue management: Recent generalizations and advances in industry applications

“…In the context of choice-based RM, Strauss et al (2018) refer to 'availability control' as deciding on which set of products to offer. In contrast, they connect the terms 'capacity control' and 'inventory control' with the independent demand case.…”

“…The paper on hand is the second and final part of a series surveying the theoretical and practical developments of RM as they are documented by scientific publications in the field. The first part of the survey, Strauss et al (2018), is dedicated to methodological advances in choice-based RM, where we dynamically control the availability of products under consideration of substitution effects. This second part gives an overview of various extensions to the standard RM setting and of advances in industrial applications.…”

“…For example, combining the term "revenue management" with the terms "overbooking" or "hotel" leads to 105 and 303 results in Scopus TM , respectively. Hence, this paper builds on the one by Strauss et al (2018) and aims at elaborating the challenges from a modeling and methodological point of view when going beyond the traditional setting, in particular, in choice-based RM.…”

The rank pricing problem: Models and branch-and-cut algorithms

“…In particular, the data availability on customers' choice behavior has been a key factor in the increasing development of pricing strategies which also address customers' preferences. In this context, the use of revenue management strategies, traditionally attributed to airlines and hotel companies, has extended to retail and manufacturing ones ( [9], [22]). Generally speaking,…”

Joint optimization of pricing and capacity allocation for two competitive airlines under demand uncertainty

“…Although the roots of profit management are highly related to the airline industry, the recent developments regarding airlines reservation systems as well as the application of earnings management techniques in many other industries, provides suitable platform for capacity control. The new systems do not necessarily depend on the constraints of reservation systems and directly control the prices of products in a dynamic fashion Straussa et al [21]. Thus, improvement in new platforms of e-commerce reveals real-time decision-making abilities for capacity allocation and pricing.…”