Beta 1

Title Revenue Management
Author Thomsen, Therese Gosvig
Supervisor Madsen, Oli B.G. (Logistics Optimisation Group, Centre for Traffic and Transport, Technical University of Denmark, DTU, DK-2800 Kgs. Lyngby, Denmark)
Institution Technical University of Denmark, DTU, DK-2800 Kgs. Lyngby, Denmark
Thesis level Master's thesis
Year 2006
Abstract The successful application of yield management (or equivalent revenue management/ RM) to the seat inventory control (SIC) problem of major airlines, has made it interesting to consider incorporating revenue management tools in other business areas such as liner shipping. The objective of this master thesis is to investigate how and to what extent some of the SIC tools used by the airlines could be used by the liner shipping companies in the capacity control and reservation systems of containers. To achieve this objective the relevant revenue management issues are outlined first, followed by an analysis of how the airlines have used RM. The basic SIC problem is concerned with the allocation of discount and full-fare seats on a flight so as to maximize total revenue. I present both some heuristic and some exact solution methods to the SIC problem. In order to compare liner shipping with the airlines, a presentation of liner shipping is made with focus on container transportation on vessels across the world. Important features like market structure, customer relations and contractual obligations are investigated. Next the problem of allocating slots onboard a vessel is modeled parallel to the SIC scenarios. I set up three different dynamic programming (DP) models for the slot allocation of containers. The first one is rather simple since it is assumed that the vessel only sails between two ports and is only allowed to book one slot at a time. The second allows for the booking of more than one slot at a time, and in the third model the vessel is allowed to sail between more ports than two. All three models include multiple and nested booking classes. DP models are accurate, but very time-consuming and there-fore a linear programming (LP) model has been set up for each of the 3 DP models. In general LP models are much faster to solve than DP models and the input is only a condensed form of the input for the DP models. The LP models are approximations of the DP models and the degree of accuracy is investigated. From all the examples it can be seen that the more remaining capacity onboard, the better the LP model fits. Finally, I briefly discuss the likelihood of introducing an advanced computer-based program for slot allocation of containers onboard liner vessels.
Pages 95
Original PDF Therese_hovedrapport.pdf (0.73 MB)
Admin Creation date: 2006-07-21    Update date: 2009-06-19    Source: dtu    ID: 190386    Original MXD