Revenue Management: Research Overview and Prospects
JEFFREY I. MCGILL
Queen’s University, School of Business, Kingston, Ontario K7L 3N6, Canada
GARRETT J. VAN RYZIN
Columbia University, Graduate School of Business, 412 Uris Hall, New York 10027
This survey reviews the forty-year history of research on transportation revenue management (also known as yield management). We cover developments in forecasting, overbooking, seat inventory control, and pricing, as they relate to revenue management, and suggest future research directions. The survey includes a glossary of revenue management terminology and a bibliography of over 190 references.
n the forty years since the first publication on overbooking control, passenger reservations systems have evolved from low level inventory control processes to major strategic information systems. Today, airlines and other transportation companies view revenue management systems and related information technologies as critical determinants of future success. Indeed, expectations of revenue gains that are possible with expanded revenue management capabilities are now driving the acquisition of new information technology [see, for example, GARVEY (1997)]. Each advance in information technology creates an opportunity for more comprehensive reservations control and greater integration with other important transportation planning functions. There is now a substantial literature of journal articles, technical reports, and conference proceedings describing the practice and theory of revenue management. This paper provides a survey and bibliography of work in this important area. The paper is organized as follows. In Section 1, we outline the history and current nature of the revenue management problem and discuss some of the complexities that make solution and implementation so challenging. Sections 2 through 5 contain reviews of revenue management research in four key areas—forecasting, overbooking, seat inventory control,...