Research project: Revenue management

Areas of Interest:

1. Competition in Revenue Management: investigate the impact of price competition on the optimal prices to be charged for perishable products, e.g. airline seats. Competition has a huge influence on customer buying behaviour and will impact on the optimal price that companies should charge for goods or services. We consider situations where a company is selling an inventory of identical items by a fixed time and there is one competing seller, e.g. airline tickets, hotel rooms. What prices should be set over the selling period to maximise revenue?
   
   • Set up a probabilistic model of customer demand, which is influenced by the prices offered by the company and the competitor, and the time left until the end of the selling period
   • Use Calculus of Variations to maximise revenue subject to capacity constraints. The work was implemented by a major UK airline to help maximise revenue on its short-haul routes.
2. Customer Choice Modelling: finding efficient methods for parameterisation of customer choice models in revenue management systems; dealing with sparse data; optimising a firm’s offerings to maximise overall revenue.
3. Combining Revenue Management with Vehicle Routing: setting delivery prices to minimise delivery costs; using pricing to influence customers’ decisions.
   The work was carried out in collaboration with a major UK e-grocer.
4. Revenue Management in the ferry industry – optimising fares for different vehicle types.
   This work is being carried out in collaboration with two major UK ferry companies.