Mehdi Sharifyazdi - Industrial Engineering Department, Sharif University of Technology, Tehran, Iran
Mohammad Modarres

To formulate stochastic capacity allocation problems in a train ticket sales system, the concept and techniques of revenue management is applied in this research. In this model, it is assumed the train capacity is stochastic and hence its exact size cannot be forecasted in advance, at the time of planning. There are two classes of early-reserving and late-purchasing customers demanding this capacity. The price rate as well as the penalty for booking cancellation caused by overbooking is different for each class. The model is developed mathematically and we propose an analytical solution method. The properties of the optimal solution as well as the behavior of objective function are also analyzed. The objective function is not concave in general. However, we prove it is a unimodal function and by taking advantage of this property, the optimal solution is determined.

Revenue management – Seat Inventory Control - Stochastic capacity – Overbooking –Railway Ticket Sales