Genetic algorithms for calibrating airline revenue management simulations

Vock, Sebastian and Enz, Steffen and Cleophas, Catherine (2015) Genetic algorithms for calibrating airline revenue management simulations. In: Proceedings - Winter Simulation Conference 2014. Institute of Electrical and Electronics Engineers Inc., pp. 264-275. ISBN 9781479974863

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Abstract

Revenue management (RM) theory and practice frequently rely on simulation modeling. Simulations are employed to evaluate new methods and algorithms, to support decisions under uncertainty and complexity, and to train RM analysts. To be useful in practice, simulations have to be validated. To enable this, they are calibrated: model parameters are adjusted to create empirically valid results. This paper presents two novel approaches, in which genetic algorithms (GA) contribute to calibrating RM simulations. The GA emulate analyst influences and iteratively adjust demand parameters. In the first case, GA directly model analysts, setting influences and learning from the resulting performance. In the second case, a GA adjusts demand input parameters, aiming for the best fit between emergent simulation results and empirical revenue management indicators. We present promising numerical results for both approaches. In discussing these results, we also take a broader view on calibrating agent-based simulations.

Item Type:
Contribution in Book/Report/Proceedings
ID Code:
88063
Deposited By:
Deposited On:
06 Oct 2017 20:06
Refereed?:
Yes
Published?:
Published
Last Modified:
23 Sep 2020 06:51