Risk Assessment in Airlines Revenue Management in Terms of Possibility and Impossibility of Batch Booking

Revenue management is a set of methods and techniques are implemented to maximize revenue of selling perishable goods. Flight tickets are worthless after departure so they are kind of perishable goods. Dynamic models are one of the most popular revenue management models which provide optimal sale policy considering demand forecasting. Because of uncertainty of demand forecasting, there are some amounts of risk in using revenue management methods. In this research, a dynamic model of revenue management has been offered which provides facility of choosing risk level for decision maker. According to results of computer simulation experiments by considering of batch booking, Sharpe Ratio values which express rate of efficiency on risk are calculated for various risk levels and an optimal risk level has been suggested. Tables of sale policy for risk neutral policy and optimal policy are provided and compared. Problem has been solved for assumption of 'no batch booking' and finally effect of batch booking assumption has been checked on expected revenue and optimal risk level.