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Bid-Price Heuristics for Unrestricted Fare Structures in Cargo Revenue Management

  • Lorenzo Castelli
  • Raffaele Pesenti
  • Desirée Rigonat
Chapter
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 262)

Abstract

In the present work we propose two bid-price based heuristic approaches to tackle a stochastic price-oriented demand of air cargo transportation. We assume fares are non-decreasing over time: the earlier the booking, the cheaper the fare. We consider a single-leg flight without overbooking practices or no-show customers. The proposed framework is suited for air cargo carriers providing a unique product to all its price-oriented customers. The business sustainability relies on a significant reduction in fares that would outperform other benefits, an earlier time of delivery above all. Nevertheless, our modelling framework may be easily extended to other modes of cargo transportation, such as maritime, where a given shipment receives the same service regardless the paid fare, which, in turn, only depends on the time the booking request is made.

Keywords

Heuristics Revenue management Capacity management Air cargo Dynamic programming Bid-price 

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Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  • Lorenzo Castelli
    • 1
  • Raffaele Pesenti
    • 2
  • Desirée Rigonat
    • 1
  1. 1.Dipartimento di Ingegneria e ArchitetturaUniversità degli Studi di TriesteTriesteItaly
  2. 2.Dipartimento di ManagementUniversità Ca’ Foscari di VeneziaCannaregioItaly

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