Journal
PRODUCTION AND OPERATIONS MANAGEMENT
Volume 25, Issue 10, Pages 1658-1672Publisher
WILEY
DOI: 10.1111/poms.12553
Keywords
revenue management; forecasting; leasing; stochastic comparison; dynamic programming
Funding
- UCR Regents' Faculty Fellowships
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We study a joint capacity leasing and demand acceptance problem in intermodal transportation. The model features multiple sources of evolving supply and demand, and endogenizes the interplay of three leversforecasting, leasing, and demand acceptance. We characterize the optimal policy, and show how dynamic forecasting coordinates leasing and acceptance. We find (i) the value of dynamic forecasting depends critically on scarcity, stochasticity, and volatility; (ii)traditional mean-value equivalence approach performs poorly in volatile intermodal context; (iii) mean-value-based forecast may outperform stationary distribution-based forecast. Our work enriches revenue management models and applications. It advances our understanding on when and how to use dynamic forecasting in intermodal revenue management.
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