Revenue management under customer choice behaviour with cancellations and overbooking

@article{Sierag2015RevenueMU,
  title={Revenue management under customer choice behaviour with cancellations and overbooking},
  author={D. D. Sierag and Ger Koole and Robert D. van der Mei and J. I. van der Rest and Bert Zwart},
  journal={European Journal of Operational Research},
  year={2015},
  volume={246},
  pages={170-185}
}
In many application areas such as airlines and hotels a large number of bookings are typically cancelled. Explicitly taking into account cancellations creates an opportunity for increasing revenue. Motivated by this we propose a revenue management model based on Talluri and van Ryzin [27] that takes cancellations into account in addition to customer choice behaviour. Moreover, we consider overbooking limits as these are influenced by cancellations. We model the problem as a Markov decision… CONTINUE READING
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