Example One market. 3 itineraries Unconstrained demand per itinerary Total demand for an itinerary when the number of seats is unlimited 100 J200 A K,100-(B 2/212021 Barnhart 1.206J/16.77J/ESD. 15J
2/21/2021 Barnhart 1.206J/16.77J/ESD.215J 6 Example A B I,100 J,200 K,100 • One market, 3 itineraries • Unconstrained demand per itinerary – Total demand for an itinerary when the number of seats is unlimited
Example with capacity Constraints One market 3 itineraries Capacity on itinerary I= 150 Capacity on itinerary J=175 Capacity on itinerary K= 130 Optimal solution: I100.150 from I ppp oil1 fomJ(A1200175 B from K K,100,130 2/212021 Barnhart 1.206J/16.77J/ESD. 15J
2/21/2021 Barnhart 1.206J/16.77J/ESD.215J 7 Example with Capacity Constraints A B I,100,150 J,200,175 K,100,130 • One market, 3 itineraries – Capacity on itinerary I = 150 – Capacity on itinerary J = 175 – Capacity on itinerary K = 130 • Optimal solution: – Spill _____ from I – Spill _____ from J – Spill _____ from K
Revenue management: A Quick One flight leg Flight 105, LGA-ORD, 287 seats available Two fare classes Y: High fare, no restrictions M: Low fare, many restrictions · Demand for Flight105 Y class: 95 with an average fare of $400 M class: 225 with an average fare of $100 Optimal Spill Solution(Y and 3M passengers) Revenue s9500+1/11 spill: s 5100 2/212021 Barnhart 1.206J/16.77J/ES D 2 15J
2/21/2021 Barnhart 1.206J/16.77J/ESD.215J 8 Revenue Management: A Quick Look • One flight leg – Flight 105, LGA-ORD, 287 seats available • Two fare classes: – Y: High fare, no restrictions – M: Low fare, many restrictions • Demand for Flight 105 – Y class: 95 with an average fare of $400 – M class: 225 with an average fare of $100 – Optimal Spill Solution ( Y and M passengers) • Revenue: $ • Spill: $
Network Revenue management Two Flights Flight 105, LGA-ORD, 287 seats Demand (one fare class LGA-ORD, 225 passengers $100 ORD-SFO, 150 passengers $150 LGA-SFO, 150 passengers, $225 Optimal Solution: S HETH5TT5 LGA-ORD passengers ORD-SFO, - passengers LGA-SFO, 1I passengers 2/212021 Barnhart 1.206J/16.77J/ESD. 15J
2/21/2021 Barnhart 1.206J/16.77J/ESD.215J 9 Network Revenue Management • Two Flights – Flight 105, LGA-ORD, 287 seats – Flight 201, ORD-SFO, 287 seats • Demand (one fare class) – LGA-ORD, 225 passengers $100 – ORD-SFO, 150 passengers $150 – LGA-SFO, 150 passengers, $225 • Optimal Solution: $ – LGA-ORD, passengers – ORD-SFO, passengers – LGA-SFO, passengers
Quantitative Share Index or Quality of Service Index(qst Definition Quantitative Share Index or Quality of Service Index(qst There is a QSI for each itinerary i in each market m for each airline a, denoted esli(m) The sum of esT i(m/over all itineraries i in a market m over all airlines a is equal to 1, for all markets m 2/212021 Barnhart 1.206J/16.77J/ESD. 15J
2/21/2021 Barnhart 1.206J/16.77J/ESD.215J 10 Quantitative Share Index or Quality of Service Index (QSI): Definition • Quantitative Share Index or Quality of Service Index (QSI) – There is a QSI for each itinerary i in each market m for each airline a, denoted QSIi(m) a – The sum of QSIi(m) a over all itineraries i in a market m over all airlines a is equal to 1, for all markets m