Discrete dynamic pricing and application of network revenue management for FlixBus
Journal
Journal of Revenue and Pricing Management
ISSN
1477-657X
Type
journal article
Date Issued
2021-11-26
Author(s)
Abstract (De)
We consider a real discrete pricing problem in network revenue management for FlixBus. We improve the company's current
pricing policy by an intermediate optimization step using booking limits from standard deterministic linear programs. We
pay special attention to computational efficiency. FlixBus' strategic decision to allow for low-cost refunds might encourage
large group bookings early in the booking process. In this context, we discuss counter-intuitive findings comparing booking
limits with static bid price policies. We investigate the theoretical question whether the standard deterministic linear program
for network revenue management does provide an upper bound on the optimal expected revenue if customer's willingness
to pay varies over time.
pricing policy by an intermediate optimization step using booking limits from standard deterministic linear programs. We
pay special attention to computational efficiency. FlixBus' strategic decision to allow for low-cost refunds might encourage
large group bookings early in the booking process. In this context, we discuss counter-intuitive findings comparing booking
limits with static bid price policies. We investigate the theoretical question whether the standard deterministic linear program
for network revenue management does provide an upper bound on the optimal expected revenue if customer's willingness
to pay varies over time.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Official URL
Eprints ID
264916