Publication

Analysis of an itinerary-based airline fleet assignment model with passenger-choice driven recapture and pricing

Michel Bierlaire
2013
Talks

Abstract

There is an increasing interest for the integration of supply-demand interactions in airline schedule planning models. We work with an itinerary-based fleet assignment model where an itinerary choice model is explicitly integrated. The choice model represents the decision on pricing as well as the spill and recapture effects. We present a sensitivity analysis for the key assumptions of the demand model in order to quantify the added value of choice-based fleet assignment compared to leg-based fleet assignment. The model is solved with a local search heuristic which iterates over two sub-problems. We present a transformation of the problem which results with a convex formulation and is expected to increase the efficiency of the solution methodologies.

Official source

https://infoscience.epfl.ch/entities/publication/404b755c-b334-4d81-91ab-1e38c48edd79

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Michel Bierlaire
2013
Talks

Abstract

Official source

https://infoscience.epfl.ch/entities/publication/404b755c-b334-4d81-91ab-1e38c48edd79

About this result

Related concepts (32)

Demand for money

In monetary economics, the demand for money is the desired holding of financial assets in the form of money: that is, cash or bank deposits rather than investments. It can refer to the demand for money narrowly defined as M1 (directly spendable holdings), or for money in the broader sense of M2 or M3. Money in the sense of M1 is dominated as a store of value (even a temporary one) by interest-bearing assets. However, M1 is necessary to carry out transactions; in other words, it provides liquidity.

Rational choice theory

Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postulates that an individual will perform a cost-benefit analysis to determine whether an option is right for them. It also suggests that an individual's self-driven rational actions will help better the overall economy. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.

Supply and demand

In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.