Technical Program
These
submitted abstracts have been conditionally accepted for inclusion in the
AGIFORS Symposium agenda. Final acceptance is contingent on 1) receipt of
complete presentation on/before 20 September 2009, and 2) approval of
presentation content by the AGIFORS technical committee.
Airline customers online search and purchase for discounted fare products
Misuk
Lee and Laurie Garrow,
Georgia Tech, David Post (Sigma Zen)
This study analyzes how individuals search for information about air ticket
attributes and prices using data from a website that sells tickets at low
prices to travelers with a high degree of travel flexibility. Markov-based
models are used to capture the dynamics of customers’ searching and
purchasing behaviors. Empirical results reveal that what visitors saw in
previous site visits clearly influences future revisit and purchase
probabilities, as well as search intensity within sessions.
A Paradigm for Scheduled
Flight Services
Jon S
Kyle, S8 Cargo Inc.
A novel paradigm provides a way to categorize origin-to-destination flight
services. The paradigm derives from the “efficient frontier” defined by
Markowitz in his groundbreaking 1952 paper that launched financial portfolio
theory for which Markowitz won the 1990 Nobel Prize in Economics. The
paradigm gives rise to an algorithm for generating origin-to-destination
flight services with astonishing efficiency. The algorithm permits direct
generation of a set of “best services” without ever considering services
that are not members of the set of best services. The set of “best services”
is equivalent to Markowitz’ “efficient frontier”. Products using the
algorithm will be briefly demonstrated.
A
new methodology for solving the no purchase problem in choice based RM
Laurie
Garrow, Mark E Ferguson and Melike Meterelliyoz,
Georgia Tech
Through cleverly
redefining customer arrival rates and using historical market share, we
leverage the independence of irrelevant alternatives property of the MNL
model to calculate a non-zero no purchase utility. Our algorithm solves for
MNL parameters using one iteration of the EM algorithm, effectively reducing
computational times from hours to seconds. Most important, MNL parameter
estimates are both intuitive and stable across datasets.
Baggage Capacity and
Demand Management Becomes even more Sophisticated
Desmond
Di Wang, Northwestern University. Additional Authors: Diego Klabjan
(Northwestern), Robin Riedel (AC), Steven Truttenbach (AC), Jean-Francois
Page (AC)
Load of an aircraft consists of passengers, cargo, and baggage. While
sophisticated forecasting systems exist for the first two contributors, this
is not the case for baggage despite significant costs associate with baggage
mishandling. It is not uncommon that on the day of the operations the
aircraft is overloaded with excessive baggage, which leads to dire
consequences for both passengers and the airline. It is thus desirable to
detect such situations early during the booking process. We present
methodologies behind a system for baggage load forecasting any number of
days before the day of operations. We will discuss the data gathering
process and the underlying implementation of the system.
Bounds
for network revenue management
Kalyan
Talluri, Universitat Pompeu Fabra in Barcelona
Tight upper bounds for network
revenue management are of interest in themselves as they show how close a
method is to optimum, and also as the bounds often lead to new control
methods. In this talk we compare some known bounds and present new bounds
for network revenue management, that are provably tighter than some of the
existing bounds.
Estimating OD Demand with
New Solutions to an Old Problem
Roger A
Parker, Virtual M1nds
The estimation of ‘true’ OD demand has long been a central issue for airline
analysts. This presentation will survey the current state of the art, and
then offer two recent advances made possible by the application of discrete
choice theory and modern simulation modeling. First, a discrete choice
‘gravity’ model combined with a nested logit structure will be described
which applies the classic trip-generation/trip-distribution construct to
build a market-level OD demand model for the US. Second, the concept of NCAD
– Network and Channel Adjusted Demand –will be introduced. Using agent
simulation, it holds promise a significant advancement for the field.
Equitable and Efficient Coordination
of Traffic Flow Management Programs
Douglas Fearing, Massachusetts Institute of Technology
Anna
Valicek Medal 2009 Finalist
We propose two
optimization formulations balancing equity and delay for the multi-resource
TFM scheduling problem. To evaluate these models and compare them to the
current approach, we develop a metric for schedule fairness derived from
highly-successful properties of RBS. Through regional and national scenarios
derived from historical data, we demonstrate that both models lead to
improved efficiency while maintaining an equivalent level of fairness as
current practice.
Improving schedule
profitability using flight retiming
Sergey
Shebalov, Sabre Inc.
We present an optimization models that improves schedule profitability by
retiming flights at an airline hub. The model employs logit O&D demand
forecasting methodology and therefore accounts for demand share changes
caused by retiming for both local and connecting markets. Additional revenue
is due to improved quality of existing itineraries as well as new connection
opportunities. We propose to employ this model at the network planning stage
as we make sure that operational constraints such as aircraft count and flow
balance are satisfied, and so the modified schedule is feasible for fleet
assignment. Because problem size can become formidable, we develop an
iterative approach that gradually improves schedule structure and keeps
memory usage and run times at reasonable level. Our experiments on a real
airline data show up to 3% improvement in revenue opportunity.
Integrated Digital
Marketing And Revenue Management
Kevin
Geraghty, Revenue Research Inc.
This paper explores the synergies between digital marketing and revenue
management by way of case studies including a dynamic pricing implementation
that drove $50 million in revenue enhancement in 3 months. It also provides
a sneak peak into future tools that Google is providing that will
significantly change price delivery on the web.
Profit
Maximization of Multi Stops Operating Model
Mohammed
Salem, Felix Airways
The competitive environment of aviation industry is driving most airlines to
re-evaluate their strategies to survive, and many strategies are setup
either to reduce the cost or to improve the profits as e-ticketing,
simplifying the Business, e-freight to meet the challenge of Low Cost
Carriers in their markets. This paper is addressing a new approach for
maximizing profits in Multi-Stop Operating Model in long haul operation of
legacy airlines based on demand passengers of multi destinations,
corresponding market fares and cost of available ton kilometers of the
assigned aircraft. Linear program is developed and many constrains are set
up. The profit is maximized by solving operating route/ arranging the right
number of frequencies, load factor per sector and cabin load factor for each
respective destination. Based on these results many scenarios are
implemented to define the right aircraft to operate and the most profitable
routes to select in the network. The program can be further extended to
study the effects of new destinations on the existing routes / network.
Meanwhile, market opportunity is another important factor to develop a
decision matrix with a profit to define the complete picture of the airline
network.
Revenue Management Models
and their Estimation
Kalyan
Talluri, Universitat Pompeu Fabra in Barcelona
We report results of a
large scale empirical study of bookings data across four RM industries
(network airline, low-cost, cargo and hotel) examining if the assumptions of
RM models are justified. The main technical difficulty is that we cannot
observe no-purchases. We present alternate models that better fit data and
are also tractable. We present alternate estimation procedures and report
simulation experiments on their performance.
Synchronized Aircraft and
Crew Rotations
Tore
Jenner , SITA
To achieve a robust
airline operation where delays are not propagated crews should ideally
follow the aircraft flow. For reasons like industrial contract limitations,
organization, planning methods and computer systems this cannot always be
obtained and is particularly difficult for network operators. The
presentation elaborates on the difficulties and shows how optimization can
be used to synchronize aircraft and crew rotations to improve operational
robustness.
Scheduled
Maintenance Planning for Per Seat On Demand Air Transportation
Gizem Keysan, Georgia Institute of Technology
Anna Valicek
Medal 2009 Finalist
We address planning the
scheduled maintenance of per-seat, on-demand air transportation. At the
tactical level, we determine the maintenance capacity, i.e., the maximum
number of jets that can be maintained on a given day. We model these
decisions with an integer program (IP) and use an optimization-based local
search algorithm to solve the IP. The specific jets to be maintained on a
daily basis are determined at the operational level with a decision support
tool based on a two-phased IP approach. Finally, we develop an integrated
framework to capture the interaction between the operational level
maintenance decisions and flight scheduling.
The Ergonomics of
Corporate Decision Making
Stefan E
Karisch, Jeppesen
At Jeppesen, operations researchers are routinely called upon to provide
analytic support for high-value decisions under conditions of great
uncertainty. Such decisions concern for example the corporate investment
portfolio, product launches and inventory control. The methodologies
deployed comprise multi-objective optimization, integer and nonlinear
programming, statistical analysis, and simulation. While analytic techniques
provide valuable supporting information for decision-makers, the
decision-making process itself turns out to determine the success or failure
of our efforts. In this talk, I will describe critical success factors of
the decision-making processes at Jeppesen. They include, besides a flexible
and adaptable technical methodology, a human-centered approach.
Understanding the Relationships between Price, RM Controls and Scheduled
Capacity
Tim
Jacobs, American Airlines. Additional Authors: Barry Smith (Barry C. Smith
Inc.) and Richard Ratliff (Sabre Holdings)
The relationship among pricing, RM
controls and capacity directly impacts the profitability potential of an
airline’s schedule. Too much capacity in a market leads to wide open RM
controls and bargain basement prices to stimulate demand to fill the
available seats at unprofitable yields. On the other hand, a schedule that
does not supply enough capacity can lead to higher prices and stringent
controls that invite competition. Understanding the relationship between
the scheduled capacity, pricing structure and RM controls gives an airline
the opportunity to better align scheduled capacity, adjust pricing
structures and manage the seat inventory to maximize profitability. This
paper presents one methodology for evaluating the impact of scheduled
capacity and pricing structures on overall network revenue. This paper
presents the macro level metric for evaluating the quality of a given
pricing strategy and guiding a search algorithm to identify the optimal an
optimal alignment between pricing structure, scheduled capacity and the RM
process.
Deadlines
and Requirements
Abstract
Submissions - 15 September 2009
Please
send all submissions via the online
form.
Submit
abstracts online (maximum 100 words). Include a title and identify the
corresponding author. For each co-author, include full name,
affiliation, complete address, telephone number, FAX number, and electronic
mail address or URL.
Paper/Presentation
Submissions – 20 September 2009
Corresponding
author provides both an electronic file submission of the presentation/paper
for inclusion on the CD-version of the Proceedings and a photo-ready copy for
the printed Proceedings.
Please
note the following conditions for inclusion of your paper in AGIFORS 2009:
-
At least one
author of an accepted paper must attend the Symposium to make the oral
presentation.
-
Each attendee
must register and pay the registration fee.
-
Each attendee
is responsible for making all hotel arrangements.
Inquiries
about Technical Program
Tim
Jacobs
AGIFORS Past President, and Technical Director
Phone: +1 817.967.1841
E-mail: tim.jacobs@aa.com