Capacity Allocation Model of Air Cargo with the Differences in Transport Time

Abstract

AbstractCapacity allocation is the core of air cargo revenue management. Nearly all the existing studies are conducted under the assumption of the equal transport time, overlooking the differences in transport time for the cargo in the actual operating processes. In fact, according to the foregoing differences, air cargo can be divided into urgent and general cargo. Urgent cargo should be transport as soon as possible, while the general one can be delayed within a certain time limit. In the light of the actual cargo loading demand, this paper proposes a dynamic programming model for air cargo capacity allocation so as to get the maximum revenue of a single-leg flight. Then simulation validates the effectiveness of the strategy suggested in this paper.KeywordsAir cargoRevenue managementCapacity allocationTransport time