Capacity Options for Revenue Management (eBook)

Theory and Applications in the Air Cargo Industry

Rolf Hellermann (Autor)

eBook Download: PDF

2006
XV, 199 Seiten
Springer Berlin (Verlag)
978-3-540-34420-9 (ISBN)

Infos

This book proposes capacity options as a flexible alternative air cargo contract type, and illustrates how capacity can be priced through option contracts. The analysis is accomplished by means of an analytical multivariate optimization model under price and demand uncertainty. A case study using data from a leading German carrier illustrates the financial potential. Finally, the author shows how capacity-option contracts integrate into the context of air cargo revenue management.

Inhalt

Foreword 5
Preface 7
Contents 8
List of Abbreviations, Variables, and Functions 11
1 Introduction 14
2 Capacity Agreements in the Air Cargo Industry 17
2.1 The Air Cargo Industry 17
2.2 Case Study: Capacity Reservation and Dynamic Pricing at Lufthansa Cargo AG3 22
2.3 Research Questions and Methods 30
3 Literature Review on Supply Contracting and Revenue Management 33
3.1 Advance Sale of Capacity 33
3.2 Supply Contracts 36
3.3 Revenue Management 49
4 Capacity-Option Pricing Model 64
4.1 Model Overview and Setup 64
4.2 Assumptions 66
4.3 The Intermediary’s Problem 70
4.4 The Asset Provider’s Problem 74
5 Model Results and Comparative Statics 80
5.1 Framework for the Analysis 80
5.2 Illustration of Optimal Policies 83
5.3 The Benefit of the Contract Market 88
5.4 Comparative Static Analysis of Contract Types 91
5.5 Reduction of Double-Marginalization 130
5.6 Summary of Results 134
6 Model Extensions: Distribution of Profits, Correlations, and Overbooking 138
6.1 Distribution of Profits 138
6.2 Interdependencies Between Stochastic Variables 141
6.3 Overbooking 145
7 Application Case Study in the Air Cargo Industry 158
7.1 Data Sample 158
7.2 Estimation of Model Variables 160
7.3 Results 163
8 Managerial Implications and Conclusion 171
8.1 Managerial Implications and Implementation Issues 172
8.2 Further Applications and Future Research 174
A Mathematical Formulae 177
A.1 Normal Distribution 177
A.2 Leibniz’ Rule 179
B Proofs and Calculations 180
B.1 Second Partial Derivatives of the Asset Provider’s Expected Profit 180
B.2 Offload Quantity 183
References 187
Index 199
List of Tables 203
List of Figures 204

Produkt-Details

• Erscheint lt. Verlag: 7.10.2006
• Reihe/Serie: Lecture Notes in Economics and Mathematical Systems
• Reihe/Serie: Lecture Notes in Economics and Mathematical Systems
• Zusatzinfo: XV, 199 p. 65 illus.
• Verlagsort: Berlin
• Sprache: englisch
• Themenwelt: Mathematik / Informatik ► Mathematik
• Themenwelt: Technik
• Themenwelt: Wirtschaft ► Allgemeines / Lexika
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Logistik / Produktion
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Marketing / Vertrieb
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre
• Schlagworte: Advance Sale of Capacity • Distribution • Optimization • Real Options • Revenue Management • Supply Contracts
• ISBN-10: 3-540-34420-9 / 3540344209
• ISBN-13: 978-3-540-34420-9 / 9783540344209