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Air cargo network revenue management

Barz, Christiane and Gartner, Daniel 2016. Air cargo network revenue management. Transportation Science 50 (4) , pp. 1206-1222. 10.1287/trsc.2016.0708

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In this paper we discuss heuristics for network air cargo revenue management. We start from a dynamic programming formulation of air cargo network revenue management. Since the curse of dimensionality makes this problem intractable, we suggest several methods, based on linear programming, approximate dynamic programming, and decomposition to obtain both upper bounds and heuristics. We prove relationships between the upper bounds. Furthermore, we analyze the performance of both the bounds as well as the heuristics in a numerical study. In this numerical study, we find that a dynamic programming decomposition yields the tightest bounds. The heuristic based on the decomposition dominates other approaches by giving higher expected net revenues both when applied on the single-leg and on the network cargo problem.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Mathematics
Publisher: Institute for Operations Research and the Management Sciences
ISSN: 0041-1655
Date of Acceptance: 1 August 2016
Last Modified: 10 Jul 2019 12:55

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