Estimating True Demand in Airline’s Revenue Management Systems using Observed Sales
Journal Title: International Journal of Advanced Computer Science & Applications - Year 2017, Vol 8, Issue 7
Abstract
Forecasting accuracy is very important in revenue management. Improved forecast accuracy, improves the decision made about inventory and this lead to a greater revenue. In the airline’s revenue management systems, the inventory is controlled by changing the product availability. As a consequence of changing availability, the recorded sales become a censored observation of underlying demand, so could not depict the true demand, and the accuracy of forecasting is affected by this censored data. This paper proposed a method to estimate true demand from censored data. In the literature, this process is referred to as unconstraining or uncensoring. Multinomial Logit model is used to model the customer choice behaviour. A simple algorithm is proposed to estimate the parameters (customers’ preference) of the model by using historical sales data, product availability info and the market share. The proposed method is evaluated using different simulated datasets and the results are compared with three benchmark models that are used commonly in airline revenue management practice. The experiments show that proposed method outperforms the others in terms of execution time and accuracy. A 47.64% improvement is reported in root mean square error between simulated and estimated demand in contrast to the benchmark models.
Authors and Affiliations
Alireza Nikseresht, Koorush Ziarati
Keywords
Related Articles
- EP ID EP260414
- DOI 10.14569/IJACSA.2017.080748
- Views 53
- Downloads 0
Addressing the Future Data Management Challenges in IoT: A Proposed Framework
Internet of Thing (IoT) has been attracting the interest of researchers in recent years. Traditionally, only handful types of devices had the capability to be connected to internet/intranet, but due to the latest develop...
Standard Intensity Deviation Approach based Clipped Sub Image Histogram Equalization Algorithm for Image Enhancement
The limitations of the hardware and dynamic range of digital camera have created the demand for post processing software tool to improve image quality. Image enhancement is a technique that helps to improve finer details...
Mobility Management Using the IP Protocol
Time critical applications, such as VoIP and video conferencing require Internet connectivity all of the time for better performance. Moreover, in case of vehicular networks, it is very common for mobile devices to move...
Multi-input Multi-output Beta Wavelet Network: Modeling of Acoustic Units for Speech Recognition
In this paper, we propose a novel architecture of wavelet network called Multi-input Multi-output Wavelet Network MIMOWN as a generalization of the old architecture of wavelet network. This newel prototype was applied to...
InstDroid: A Light Weight Instant Malware Detector for Android Operating Systems
With the increasing popularity of Android operating system, its security concerns have also been raised to a new horizon in past few years. Different researchers have introduced different approaches in order to mitigate...