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Capacity Options for Revenue Management

Theory and Applications in the Air Cargo Industry

  • Rolf Hellermann

Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 575)

About this book

Introduction

Arguably the central problem in Operations Research and Management S- ence (OR/MS) addressed by e-business is better coordination of supply and demand, including price discovery and reduction of transaction costs of buyer-seller interactions. In capital-intensive industries like air cargo, the out-of-pocket costs of excess capacity and the opportunity costs of underu- lized capacity have been important factors driving the growth of exchanges for improving demand and supply coordination through e-business pl- forms. Hellermann addresses in his dissertation one of the most interesting - pects of this evolution for OR/MS, the parallel development of long-term and short-term markets for capacity and output, accompanied by a range of option and ?xed-commitment (i. e. , forward) contracts as the basic mec- nisms supporting transactions. This has been a fascinating topic for OR/MS research because it builds on the powerful framework of real options, while connecting directly to key operations decisions (capacity planning, network design, staf?ng, routing, maintenance, and so forth) of the equipment and technologies whose output is the focus of contracts. From the perspective of practice, the integrated use of these Internet-based contracting mechanisms, as facilitated by new B2B exchanges, represents an opportunity for further improving supply chain performance and capital asset productivity. As Hellermann notes, a central feature of B2B for capital-intensive - dustries is that contracting needs to take place well in advance of actual delivery.

Keywords

Advance Sale of Capacity Real Options Revenue Management Supply Contracts distribution optimization

Authors and affiliations

  • Rolf Hellermann
    • 1
  1. 1.DetmoldGermany

Bibliographic information

  • DOI https://doi.org/10.1007/3-540-34420-9
  • Copyright Information Springer-Verlag Berlin Heidelberg 2006
  • Publisher Name Springer, Berlin, Heidelberg
  • eBook Packages Business and Economics
  • Print ISBN 978-3-540-34419-3
  • Online ISBN 978-3-540-34420-9
  • Series Print ISSN 0075-8442
  • Buy this book on publisher's site