The role of robust optimization in single-leg airline revenue management. (English) Zbl 1232.90252

Birbil, Ş. İlker; Frenk, J. B. G.; Gromicho, Joaquim A. S.; Zhang, Shuzhong

Manage. Sci. 55, No. 1, 148-163 (2009).

Summary: We introduce robust versions of the classical static and dynamic single-leg seat allocation models. These robust models take into account the inaccurate estimates of the underlying probability distributions. As observed by simulation experiments, it turns out that for these robust versions the variability compared to their classical counterparts is considerably reduced with a negligible decrease in average revenue.

MSC:

90B80

Discrete location and assignment

Keywords:

airline revenue management; single-leg problems; static models; dynamic models; robust optimization