Outlier detection in network revenue management
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Published version
Author(s)
Rennie, Nicola
Cleophas, Catherine
Sykulski, Adam M
Dost, Florian
Type
Journal Article
Abstract
This paper presents an automated approach for providing ranked lists of outliers in observed demand to support analysts in network revenue management. Such network revenue management, e.g. for railway itineraries, needs accurate demand forecasts. However, demand outliers across or in parts of a network complicate accurate demand forecasting, and the network structure makes such demand outliers hard to detect. We propose a two-step approach combining clustering with functional outlier detection to identify outlying demand from network bookings observed on the leg level. The first step clusters legs to appropriately partition and pools booking patterns. The second step identifies outliers within each cluster and uses a novel aggregation method across legs to create a ranked alert list of affected instances. Our method outperforms analyses that consider leg data without regard for network implications and offers a computationally efficient alternative to storing and analysing all data on the itinerary level, especially in highly-connected networks where most customers book multi-leg products. A simulation study demonstrates the robustness of the approach and quantifies the potential revenue benefits from adjusting demand forecasts for offer optimisation. Finally, we illustrate the applicability based on empirical data obtained from Deutsche Bahn.
Date Issued
2024-06-01
Date Acceptance
2023-03-09
Citation
OR Spectrum, 2024, 46, pp.445-511
ISSN
0171-6468
Publisher
Springer Nature
Start Page
445
End Page
511
Journal / Book Title
OR Spectrum
Volume
46
Copyright Statement
© The Author(s) 2023. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
License URL
Identifier
https://link.springer.com/article/10.1007/s00291-023-00714-2
Subjects
physics.soc-ph
physics.soc-ph
stat.AP
stat.ME
Notes
79 pages, re-structured and additional computational results
Publication Status
Published
Date Publish Online
2023-03-23