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Unconstraining methods for revenue management systems under small demand
Lancaster University Management School, University of Lancaster, Lancaster, United Kingdom.ORCID iD: 0000-0003-0211-5218
The York Management School, University of York, York, United Kingdom.
Warwick Business School, University of Warwick, Coventry, United Kingdom.
2019 (English)In: Journal of Revenue and Pricing Management, ISSN 1476-6930, E-ISSN 1477-657X, Vol. 18, no 1, p. 27-41Article in journal (Refereed) Published
Abstract [en]

Sales data often only represent a part of the demand for a service product owing to constraints such as capacity or booking limits. Unconstraining methods are concerned with estimating the true demand from such constrained sales data. This paper addresses the frequently encountered situation of observing only a few sales events at the individual product level and proposes variants of small demand forecasting methods to be used for unconstraining. The usual procedure is to aggregate data; however, in that case we lose information on when restrictions were imposed or lifted within a given booking profile. Our proposed methods exploit this information and are able to approximate convex, concave or homogeneous booking curves. Furthermore, they are numerically robust due to our proposed group-based parameter optimization. Empirical results on accuracy and revenue performance based on data from a major car rental company indicate revenue improvements over a best practice benchmark by statistically significant 0.5–1.4% in typical scenarios.

Place, publisher, year, edition, pages
Palgrave Macmillan, 2019. Vol. 18, no 1, p. 27-41
Keywords [en]
Demand unconstraining, Forecasting, Revenue management, Small demand
National Category
Transport Systems and Logistics Production Engineering, Human Work Science and Ergonomics
Identifiers
URN: urn:nbn:se:his:diva-18237DOI: 10.1057/s41272-017-0117-xISI: 000464760100003Scopus ID: 2-s2.0-85029810272OAI: oai:DiVA.org:his-18237DiVA, id: diva2:1398955
Available from: 2020-02-27 Created: 2020-02-27 Last updated: 2025-09-29Bibliographically approved

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Kourentzes, Nikolaos

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CiteExportLink to record
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Citation style
  • apa
  • apa-cv
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf