Optimization of Strategic Flight Ticket Purchase
Current results of revenue management and pricing policy research enable organizations to identify and realize optimal sales strategies and decisions. In response, enterprises which have to deal with the results of pricing policies are compelled to optimi
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1 Introduction In the course of contract negotiations between sales and purchase enterprises in order to support strategic and operative sourcing, it is necessary to use a structured decision support system which recommends optimal purchase decisions and offers what-if analyses. The evolution and implementation of a purchase strategy according to airline tickets is able to influence corporate profitability and perform activities due to pursue the overall business units’ objectives. The developed model provides a reasonable response to revenue management [4, 5] and dynamic pricing policies of sales oriented business units. The analysis of characteristics referring to flight ticket purchase situations and integrated types of volume discounts provides the basis for supporting in decisionmaking. Complex strategic purchase situations with several airlines, different routes, unit- and revenue-based volume discounts, varying tiers and targets and corresponding dependencies are considered. Liberalization and deregulation of air transport have led to a highly competitive flight ticket market according to traditional airlines and low-cost carriers [7, 8]. New developments in the aviation sector and airline industry provide various opportunities for purchase enterprises in order to identify and implement optimal procurement strategies. Thus, traditional airlines use travel agents, contingent contracting and negotiations with sourcing business units to conclude one year contracts while lowcost carriers want to offer new possibilities without travel agents. It is important for sourcing enterprises to make optimal strategic decisions referred to their overall objectives. Current results of negotiation and supply chain research [3, 12] show the K. Armborst · B. Werners (B) Faculty of Management and Economics, Ruhr-University Bochum, 44780 Bochum, Germany e-mail: [email protected] B. Werners e-mail: [email protected] S. Helber et al. (eds.), Operations Research Proceedings 2012, Operations Research Proceedings, DOI: 10.1007/978-3-319-00795-3_56, © Springer International Publishing Switzerland 2014
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importance of negotiation based decision-making. The developed decision system supports both strategic and operative purchase decisions regarding flight ticket procurement.
2 Characteristics The proposed model supports business units’ complex decision-making between traditional airlines and low-cost carriers in travel purchase. With the objective of flight cost minimization the presented decision support system conduces to assist structured decision support processes. It leads to an optimal supplier selection and allocation of airline tickets under consideration of possible strategic surplus purchasing. As a result of applied what-if-analyses, the decision support system promotes interactive model modifications and assists in (preparing for) contract negotiations between potential suppliers and the purchase enterprise considered. Various elements of supplier selection and order quantity allocation h
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