Hellermann Capacity Options for Revenue Management

Theory and Applications in the Air Cargo Industry
1. Auflage 2006
ISBN: 978-3-540-34420-9
Verlag: Springer Berlin Heidelberg
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, Band 575, 199 Seiten

Reihe: Lecture Notes in Economics and Mathematical Systems

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.

Autoren/Hrsg.

Hellermann, Rolf

Inhaltsverzeichnis

1;Foreword;5
2;Preface;7
3;Contents;8
4;List of Abbreviations, Variables, and Functions;11
5;1 Introduction;14
6;2 Capacity Agreements in the Air Cargo Industry;17
6.1;2.1 The Air Cargo Industry;17
6.2;2.2 Case Study: Capacity Reservation and Dynamic Pricing at Lufthansa Cargo AG3;22
6.3;2.3 Research Questions and Methods;30
7;3 Literature Review on Supply Contracting and Revenue Management;33
7.1;3.1 Advance Sale of Capacity;33
7.2;3.2 Supply Contracts;36
7.3;3.3 Revenue Management;49
8;4 Capacity-Option Pricing Model;64
8.1;4.1 Model Overview and Setup;64
8.2;4.2 Assumptions;66
8.3;4.3 The Intermediary’s Problem;70
8.4;4.4 The Asset Provider’s Problem;74
9;5 Model Results and Comparative Statics;80
9.1;5.1 Framework for the Analysis;80
9.2;5.2 Illustration of Optimal Policies;83
9.3;5.3 The Benefit of the Contract Market;88
9.4;5.4 Comparative Static Analysis of Contract Types;91
9.5;5.5 Reduction of Double-Marginalization;130
9.6;5.6 Summary of Results;134
10;6 Model Extensions: Distribution of Profits, Correlations, and Overbooking;138
10.1;6.1 Distribution of Profits;138
10.2;6.2 Interdependencies Between Stochastic Variables;141
10.3;6.3 Overbooking;145
11;7 Application Case Study in the Air Cargo Industry;158
11.1;7.1 Data Sample;158
11.2;7.2 Estimation of Model Variables;160
11.3;7.3 Results;163
12;8 Managerial Implications and Conclusion;171
12.1;8.1 Managerial Implications and Implementation Issues;172
12.2;8.2 Further Applications and Future Research;174
13;A Mathematical Formulae;177
13.1;A.1 Normal Distribution;177
13.2;A.2 Leibniz’ Rule;179
14;B Proofs and Calculations;180
14.1;B.1 Second Partial Derivatives of the Asset Provider’s Expected Profit;180
14.2;B.2 Offload Quantity;183
15;References;187
16;Index;199
17;List of Tables;203
18;List of Figures;204