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Is demand stationary a point to nesting booking limits in revenue management?

Author

Listed:
  • Jean Michel Chapuis

    (EIREST - Équipe interdisciplinaire de recherches sur le tourisme - UP1 - Université Paris 1 Panthéon-Sorbonne)

Abstract

Revenue Managers usually nest the booking limits to avoid the situation in which high-fare bookings are rejected in favour of low-fare class. To date, there are both net nesting and threshold nesting methods. However, the consequence on revenues of each one is not clearly understood. This research investigates their underlying assumptions and supports that the stationarity of the demand process is the key point. This paper also suggests a co-integration test and an event study methodology to know what is appropriate in practice.

Suggested Citation

  • Jean Michel Chapuis, 2009. "Is demand stationary a point to nesting booking limits in revenue management?," Post-Print hal-00694003, HAL.
  • Handle: RePEc:hal:journl:hal-00694003
    DOI: 10.1504/IJRM.2009.027384
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    Cited by:

    1. Li, Juan & Tang, Ou, 2012. "Capacity and pricing policies with consumer overflow behavior," International Journal of Production Economics, Elsevier, vol. 140(2), pages 825-832.

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