In the normal EMSRa and EMSRb algorithms (EMSR= expected marginal seat revenue), each fare class is utilizes exactly 1 unit of capacity (for eg. one seat on a plane).

But I have a similar problem for Revenue Optimization, where each fare class can occupy a different levels capacity, for eg. some fare classes might utilize 2x the amount the capacity.

How would you modify the EMSR algorithm such that along with the Fare and the Demand forecast (mean, std). you are also given a capacity c_i occupied by each fare class i and given you have some fixed total capacity C

How to modify EMSR when capacity for each fare class is different?

  • $\begingroup$ Sorry, this question may be outside the scope of Quant Finance. $\endgroup$ – noob2 Jul 29 '19 at 15:31
  • $\begingroup$ @noob2 thanks, do you have a suggestion as to where I can post this? $\endgroup$ – dg428 Jul 30 '19 at 7:47
  • 2
    $\begingroup$ or.stackexchange.com $\endgroup$ – Rodrigo de Azevedo Jul 31 '19 at 7:26
  • $\begingroup$ I'm voting to close this question as off-topic because it is not about quant finance (=> or.stackexchange.com) $\endgroup$ – byouness Aug 5 '19 at 11:43
  • $\begingroup$ Yes please close it, I've asked this on OR SE, thanks! $\endgroup$ – dg428 Aug 6 '19 at 9:38

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.