Optimization models for joint airline pricing and seat inventory control : multiple products, multiple periods

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Aeronautics and Astronautics, 2011.Cataloged from PDF version of thesis.Includes bibliographical references (p. 153-157).Pricing and revenue management are two essential levers to optimize the sales of an airline's seat inventory and maximize revenues. Over the past few decades, they have generated a great deal of research but have typically been studied and optimized separately. On the one hand, the pricing process focused on demand segmentation and optimal fares, regardless of any capacity constraints. On the other hand, researchers in revenue management developed algorithms to set booking limits by fare product, given a set of fares and capacity constraints. This thesis develops several approaches to solve for the optimal fares and booking limits jointly and simultaneously. The underlying demand volume in an airline market is modeled as a function of the fares. We propose an initial approach to the two-product, two-period revenue optimization problem by first assuming that the demand is deterministic. We show that the booking limit on sales of the lower-priced product is unnecessary in this case, allowing us to simplify the optimization problem. We then develop a stochastic optimization model and analyze the combined impacts of fares and booking limits on the total number of accepted bookings when the underlying demand is uncertain. We demonstrate that this joint optimization approach can provide a 3-4% increase in revenues from a traditional pricing and revenue management practices. The stochastic model is then extended to the joint pricing and seat inventory control optimization problem for booking horizons involving more than two booking periods, as is the case in reality. A generalized methodology for optimization is presented, and we show that the complexity of the joint optimization problem increases substantially with the number of booking periods. We thus develop three heuristics. Simulations for a three-period problem show that all heuristics outperform the deterministic optimization model. In addition, two of the heuristics can provide revenues close to those obtained with the stochastic model. This thesis provides a basis for the integration of pricing and revenue management. The combined effects of fares and booking limits on the number of accepted bookings, and thus on the revenues, are explicitly taken into account in our joint optimization models. We showed that the proposed approaches can further enhance revenues.by Claire Cizaire.Ph.D

Effect of 2-module-docked spacecraft configurations on spatial orientation

Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Aeronautics and Astronautics, 2007.Includes bibliographical references (leaves 45-46).This thesis used virtual reality techniques to investigate how differences in visual vertical direction of two docked spacecraft affect the ability of a person in one module to mentally visualize the relative orientation of the other module, and spatial relationships of surfaces in it. Spacecraft and space station modules are typically connected differently in space from the way they would be in training simulators on Earth. The local visual vertical is the direction that appears to be "up" as defined by panel and rack orientation, labeling, and placement. In space, the local visual verticals of adjacent modules are not always consistently aligned and astronauts say they find it hard to orient themselves within those configurations. We investigated how relative module orientation determines performance in a spatial memory and visualization task. An experiment compared six different attachment configurations of two modules. Subjects (n = 20) wearing a color stereo head mounted display first learned the interiors of two modules separately. They then learned six flight configurations sequentially. In each configuration, subjects located in the first module were shown one "cue" wall in that module, so they could determine their orientation, and were then asked to visualize, place and orient a "target" wall within a wireframe view of the adjacent second module.(cont.) The total time to respond to each trial was recorded, along with the percentage of correct responses, and the subject's head orientation. The analysis of time to respond and percentage of correct responses showed that certain configurations were statistically significantly different. As expected, the easiest configurations were "terrestrial like" where the visual verticals of the two modules were co-aligned. Including a 180 deg pitch between the modules made the task harder. The hardest were those that included a 90 deg pitch - in which the local visual verticals of the two modules were orthogonal. Comparing the easiest (terrestrial like) configurations with hardest, subjects needed 3 seconds more to orient and accomplish the task. This represents a significant amount of time given that we perform this task without much thinking about it and almost instantaneously on Earth. Subjects relied heavily on the visual verticals, and often tilted their heads toward alignment with the local visual vertical. Performance could be predicted, based on the number of pitches and yaws relating the two modules in the configurations tested. Supported in part by NASA Cooperative Agreement NCC9-1 with the National Space Biomedical Institute.by Claire Cizaire.S.M