Dynamic Control Mechanisms for Revenue Management with Flexible Products

Computers & Operations Research 37 (2010), pp. 2027-2039

33 Pages Posted: 21 Nov 2012

See all articles by Anita Petrick

Anita Petrick

Darmstadt University of Technology

Jochen Gönsch

University of Duisburg-Essen - Mercator School of Management

Claudius Steinhardt

Bundeswehr University Munich

Robert Klein

University of Augsburg

Date Written: September 24, 2009

Abstract

Revenue management with flexible products has experienced a growing interest in the academic literature within the last few years. Flexible products allow supply-side substitution between resources and can therefore help to maximize overall revenue as well as capacity utilization in markets with highly uncertain demand. This paper addresses the question of how the mathematical models which have been developed for capacity control with flexible products should be used over time to exploit the substitution opportunities, while keeping practical applicability in mind. Several dynamic control mechanisms are proposed, each of which makes use of the flexibility to a different extent. A comprehensive computational study shows the potential of the different approaches by revealing their strengths and weaknesses.

Keywords: Flexible Products, Revenue Management, Capacity Control

JEL Classification: C44

Suggested Citation

Petrick, Anita and Gönsch, Jochen and Steinhardt, Claudius and Klein, Robert, Dynamic Control Mechanisms for Revenue Management with Flexible Products (September 24, 2009). Computers & Operations Research 37 (2010), pp. 2027-2039, Available at SSRN: https://ssrn.com/abstract=2179231

Anita Petrick

Darmstadt University of Technology ( email )

Universitaets- und Landesbibliothek Darmstadt
Magdalenenstrasse 8
Darmstadt, Hesse D-64289
Germany

Jochen Gönsch (Contact Author)

University of Duisburg-Essen - Mercator School of Management ( email )

Lotharstraße 65
Duisburg, Nordrhein-Westfalen 47057
Germany
+49 203 379 - 2777 (Phone)
+49 203 379 - 1760 (Fax)

HOME PAGE: http://udue.de/goensch

Claudius Steinhardt

Bundeswehr University Munich ( email )

Werner-Heisenberg-Weg 39
Neubiberg, 85577
Germany

HOME PAGE: http://www.unibw.de/quantitative-methoden

Robert Klein

University of Augsburg ( email )

Universitätsstr. 2
Augsburg, 86159
Germany

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