A passenger revenue management system (RMS) for a national railway in an emerging Asian economy

Abstract

In this article, we provide the mathematical model for a Revenue Management System that consists of an optimizer, a simulator and a forecaster, and implement these systems on the National Railway of an Emerging Asian Economy (NREAE). We formulate a multi-period network revenue optimization model based on deterministic linear programming, which emphasizes capacity allocations adjusted to the leg-based passenger demand. This model incorporates the crucial features of NREAE like Passenger Reservation System and urgency-based booking schemes. We conduct a simulation study of passenger demand between stations and analyze the variations in revenue and also compare the performance of different pickup forecasting techniques. We illustrate and apply the concept of expected marginal seat revenue with the passenger booking data of NREAE.