Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/67522
Title: The effect of buy-back policy in air cargo revenue management
Authors: Lin, D
Lee, CKM 
Yang, J
Keywords: Revenue management
Buy-back
Air cargo
Asset provider
Intermediary
Issue Date: 2015
Publisher: Institute of Electrical and Electronics Engineers
Source: 2015 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM), Singapore, 6-9 Dec 2015, p.465-469 How to cite?
Abstract: In order to hedge against demand fluctuation after an intermediary has booked cargo space from an asset provider, buy-back policy has been applied in revenue management. This practice allows both the asset provider and the intermediary to buy back or sell reserved capacity options. This study seeks to apply the financial buy-back concept into the logistics domain by incorporating the Hellermann's capacity option model into the Black-Scholes pricing model. The proposed model was verified by practical air cargo booking data. The experiment results showed that the buy-back policy is capable of increasing the revenues from both the aspects of asset provider and intermediary. The developed model serves as a potential framework for the air cargo participants to handle their booking capacity during the period of order release and order execution.
URI: http://hdl.handle.net/10397/67522
ISBN: 978-1-4673-8066-9 (electronic)
978-1-4673-8065-2 (USB)
DOI: 10.1109/IEEM.2015.7385690
Appears in Collections:Conference Paper

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