Revenue Management
and Dynamic Pricing:
Part I

Outline

Revenue Management
and Dynamic Pricing

What is Revenue Management?

What is Revenue Management?

Rudiments

Industry Popularity

Industry Accolades

Analyst Accolades

Academic Accolades

Academic Accolades

Application Areas

Dynamic Pricing

Traditional Revenue Management

Revenue Management
and Dynamic Pricing

Airline Inventory

Airline Inventory

Airline Inventory

Fare Product Mix

Fare Product Mix

Fare Product Mix

Revenue Management
and Dynamic Pricing

The Real-Time Transaction Processor

The Revenue Management System

Analysts

The Revenue Management Process

Real-Time Transaction Processor

Real-Time Transaction Processor

Real-Time Transaction Processor

Real-Time Transaction Processor

Extract, Transform, and Load Transaction Data

Extract, Transform, and Load Transaction Data

Demand Models and Forecasting

Demand Models and Forecasting

Optimization

Decision Support

Revenue Management
and Dynamic Pricing

Two Non-Traditional Applications

New Areas

Revenue Management
and Dynamic Pricing

Further Reading

Special Interest Groups

Revenue Management
and Dynamic Pricing:
Part II

Outline

Revenue Management
and Dynamic Pricing

Leg/Class Control

A Mathematical Model

A Mathematical Model

A Mathematical Model

A Mathematical Model

An Alternative Model

A Leg DP Formulation

Slide 53

A Leg DP Formulation

A Leg DP Formulation

Slide 56

Slide 57

Slide 58

Bid Price Control

Bid Price Control

Revenue Management
and Dynamic Pricing

Network Control

Inventory Control Mechanism

Example:
Limitations of Leg/Class Control

Example:
Limitations of Leg/Class Control

Example:
Limitations of Leg/Class Control

Limitations of Leg/Class Control

Alternative Control Mechanisms

Virtual Nesting

Virtual Nesting

Virtual Nesting

Bid Price Control

Bid Price Control

Bid Price Control

Virtual Nesting

Bid Price Control

Revenue Management
and Dynamic Pricing

A Model

Demand Allocation Model

Leg/Class Control

Virtual Nesting

Bid Price Control

Network Algorithms:
Leg/Class Control

Network Algorithms:
Virtual Nesting Control

Network Algorithms:
Bid Price Control

Resource Allocation Model

Resource Allocation Model

Level of Detail Problem

Level of Detail Problem

Revenue Management
and Dynamic Pricing

A Network DP Formulation

A Network DP Formulation

A Network DP Formulation

An Alternative View of DP

An Alternative View of DP

A Network DP Formulation

Revenue Management
and Dynamic Pricing