This paper provides a very good summary of RM, particularly the practice side.
Tow points are worth attention. DP is not widely adopted by the practitioners largely due to the different mind set. Traditional RM models based on the independent demand and ignorance of the network effect have severe flaws. It also impacts how the systems should be controlled. Bid price should a more promising and superior control mechanism, compared with virtual nesting. But there is no consensus among practitioners yet.
The major issue in the forecasting is the level of detail. The paper suggests that a bottom-up approach may be more accurate than a top-down one. Also, the passenger name records (PNR) is a more desirable data source than historical transaction data.
Filed under: Operations Management, Revenue Management
