Cancellation Cost Research Articles

Research on the recovery method of disrupted flights considering passenger transfer and cancellation costs

Research on the recovery method of disrupted flights considering passenger transfer and cancellation costs

An Observational Study on the Loss of Economy Due to Surgery Cancellation in a Tertiary Care Hospital, Kashmir India and Suggestions for Improvement

The present study was conducted to identify and estimate cost borne by cancellation of elective surgeries in a tertiary care hospital in Kashmir India .The data of scheduled elective surgeries was collected. Inpatient medical records were reviewed for elective surgeries in 6 months starting from October 2023 to march 2024. During the course of study 3000 cases were scheduled to undergo impatient elective surgical procedures. Out of these 149 were cancelled. Among the cancelled cases 105 were cancelled during the preparation in the surgery wards and 44 were cancelled in operation room. The total cost of surgery cancellation was 58050 US$. Out of this 27804 US$. (48%) was related to bed expenses, 90685 US$. (17%) was related to physician visits and 203175 US$. (35%) for direct cost related resources and supplies

Time-band network model and binary tree algorithm for multimodal irregular flight recovery

Recovery of irregular flights caused by various reasons such as aircraft failures and airport closures is studied in this research and a multimodal time-band network model for solving the issue is proposed. It transforms the flight routing problem into a time-based network, which is used to obtain the delay and cancellation costs of each flight. With delay and cancellation costs as variables, the proposed model aims to minimize recovery costs under constraints. This research also suggests a developed binary tree algorithm, which improves the efficiency of model solving. The results show that the rescheduled flights and re-selected flight routes are at the lowest cost and helpful to achieve a balance of flight flow without affecting flight safety. This method used in this work shows its certain value in helping airlines restore flight operations in the shortest possible time and at the lowest cost, improving operational efficiency and service quality.

Pricing Decision and Cancellation Strategy Selection of ‘Hotel+OTA’ Based on Customer Cancellation Behavior

This paper is based on customer cancellation behavior and combines the Hotelling model framework to construct the demand for hotel direct sales channels and online travel agency (OTA) online channels. Then, the Stackelberg game model is used to analyze the optimal pricing problem between hotels and OTA with competitive relationships, and the optimal cancellation strategy for hotel direct channel is analyzed. We demonstrate that the hotel’s most profitable cancellation strategy depend on the loss cost of customer cancellation to the hotel，the cost of channel transfer for customers, and the OTA’s monopoly market segment. When the cost of loss to the hotel due to customer cancellation is relatively small, the hotel chooses a strategy where customers can cancel their reservations (i.e. Y strategy), and the pricing of hotel rooms increases as the cost of cancellation loss increases; otherwise, the hotel chooses a strategy where the customer cannot cancel the reservation (i.e. N strategy), and the pricing of hotel rooms decreases as the cost of cancellation loss increases. When the cost of channel transfer for customers is low, the hotel chooses N strategy; otherwise, the hotel chooses Y strategy. When the OTA’s monopoly market segment (i.e., the customers attracted solely to the OTA channel) is large, the hotel chooses N strategy; otherwise, the hotel chooses Y strategy. These findings can assist hotel managers in improving the design of their pricing and cancellation strategy.

A two-stage approach to aircraft recovery under uncertainty

The paper presents a two-stage approach for minimizing the impact of daily disruptions on an airline’s published flight schedule. The problem is characterized by uncertainty in the duration of the disruption and the point in time when its length becomes known. Both a single-commodity network model and multi-commodity network model with side constraints are developed to first determine the flights that are most likely to be affected, and then to adjust their schedules to achieve system-wide optimality. The overall objective is to minimize the weighted sum of total passenger delay costs, cancellation costs, curfew violation costs, and variation from the original schedule. The two types of uncertainty are addressed by examining a range of scenarios that reflect the most likely outcomes. The results provide guidance and a measure of robustness for the flight director as the disruption unfolds. A rolling horizon approach that closely mimics current procedures used by several airlines is also presented to provide a benchmark for comparisons with the two-stage solutions.

Order Fulfillment Under Pick Failure in Omnichannel Ship-From-Store Programs

Problem definition: We consider the setting where a retailer with many physical stores and an online presence seeks to fulfill online orders using an omnichannel fulfillment program, such as buy-online ship-from-store. These fulfillment strategies try to minimize cost while fulfilling orders within acceptable service times. We focus on single-item orders. Typically, all online orders for the item are sent to a favorable set of locations to be filled. Failed trials are sent back for further stages of trial fulfillment until the process times out. The multistage order fulfillment problem is thus an interplay of the pick-failure probabilities at the stores where they may be shipped from and the picking, shipping, and cancellation costs from these locations. Methodology: We model the problem as one of sequencing the stores from which an order is attempted to be picked and shipped in the most cost-effective way over multiple stages. We solve the fulfillment problem optimally by taking into account the changing pick-failure probabilities as a result of other online order fulfillment trials by casting it as a network flow problem with convex costs. We incorporate this as the second stage of a two-stage online order acceptance problem and generalize earlier results to the case with pick failures at stores. Results: We investigate the real-world performance of our methods and models on real order data of several of the top U.S. retailers that use our collaborating e-commerce solutions provider to optimize their fulfillment strategies. Academic/Practical Relevance: Our work enables retailers to incorporate pick failure in their order management systems for ship-from-store programs. Our new online order-acceptance policies that take into account pick failures can thus create significant savings for omnichannel retailers. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1164 .

The cost effectiveness of new reservoir hydroelectricity: British Columbia’s Site C project

Large-scale, reservoir hydroelectric facilities can play an important role in decarbonizing the electricity sector. However, new hydroelectric facilities are costly, and several recent projects in Canada have been subject to cost over-runs. In this paper, we develop a methodology for evaluating the cost-effectiveness of new reservoir hydroelectric projects. We apply this methodology to a case study of the Site C hydroelectric project currently under construction in British Columbia, Canada. Our approach makes use of a purpose-built linear programming capacity expansion and dispatch model, resolved at an hourly frequency and incorporating detailed treatment of balancing area requirements, available wind and solar resources, watershed constraints on hydroelectric potential, and endogenous electricity trade. Our simulations reveal that the value of the Site C project is unlikely to exceed its total cost, and only exceeds the avoidable cost of project cancellation in scenarios where BC and Alberta build additional inter-provincial transmission capacity and aim for 100% decarbonization of their electricity systems. Site C provides a cautionary tale for policymakers and planners pursuing large hydro-electric projects. Potential cost over-runs can render large hydroelectric projects uneconomic relative to alternatives. The decision to complete the Site C project is only justified by its high sunk costs.

Online Matching with Cancellation Costs

Online Matching with Cancellation Costs

The Effects of Surgery Cancellation on Patients, Families, and Staff: A Prospective Cross-Sectional Study

PurposeThis study aimed to investigate the effects of surgery cancellation, as a common and never-ending problem within preoperative care, and its related factors on patients, family members, and medical staff. DesignThe research design implemented a prospective cross-sectional type. MethodsThis study was conducted for four months in two main teaching/general medical centers. The data collection tool was comprised of three researcher-made questionnaires for patients, families, and medical staff, separately. The samples also included a total number of 315 patients, family members, and medical staff. FindingsThe results revealed that the frequency distribution of all physical and emotional effects was higher in men than in women though it was not statistically significant. Each patient had been fasting for an average of 13.26 hours until the announcement of surgery cancellation. The most prevalent physical effects in the patients were hunger, thirst, and headache, respectively. The average cost of each surgery cancellation for the patients was almost twice that for the family members. There was a significant correlation between emotional effects in the patients and the families and the reason for cancellation and informants. ConclusionsEach surgery cancellation increased fasting time in patients by an average of 5 to 7 hours. Cancellation also correspondingly led to economic harms for the patients and the families, waste of operating room resources, and duplications. Since the most common reasons for surgery cancellation were patient-related and a significant correlation was observed between the reason for cancellation and emotional effects in the patients and the families, our recommendation is to strengthen patient protocols in terms of preoperative preparation and to review admission and information processes for patients undergoing surgeries.

Scenario-based stochastic programming for an airline-driven flight rescheduling problem under ground delay programs

We address an airline-driven flight rescheduling problem within a single airport in which a series of ground delay programs (GDPs) are considered. The objective of the problem is to minimize an airline’s total relevant cost (TRC) consisting of delay costs, misconnection costs, and cancellation costs that would result from flight rescheduling. We introduce three solution approaches—the greedy approach, the stochastic approach, and the min-max approach—that revise the daily flight scheduling whenever the schedule is affected by a GDP or further GDP changes. The greedy approach simply searches for a solution using currently updated static GDP information, and the other two approaches provide a solution by considering possible scenarios for changes of the GDP. Using real-world data in existing literature and some generated scenarios, we present extensive computational results to assess the performance of the approaches. We also report the values of information on GDP the solution approaches refer to. Deliberating various cost parameter settings an airline might consider, we discuss the value of information in implementing the proposed solution approaches.

Aircraft and passenger recovery during an aircraft’s unexpected unavailability

Airlines design their initial schedules under the assumption that all resources will be available on time and flights will operate as planned. However, some disruptions occur due to mechanical failures and unexpected delays of maintenance, making the aircraft unavailable for a certain period of time. These deviations from the initial plan result in high operational costs in addition to the serious inconveniences experienced by passengers. In order to handle aircraft and passenger recovery problems simultaneously, we work on integrated networks at which aircraft routings and passenger itineraries are superimposed. Consequently, we could calculate the actual profit and cancellation cost by evaluating each passenger itinerary while considering the seat capacity limitations. In our computational results, we use a daily schedule of a major U.S. airline and clearly demonstrate that there is an optimal trade-off between operating and passenger-related costs.

To Buy or Not to Buy? Price Salience in an Online Shopping Field Experiment

We examine whether shrouding or partitioning of a surcharge raises demand in online shopping. In a field experiment with more than 34,000 consumers, we find that consumers in the online shop of a cinema initiate a purchase process for a 3D movie more often when the 3D surcharge is shrouded, but they also drop out more often when the overall price is shown at the check-out. In sum, the demand distribution is independent of the price presentation. This result qualifies previous findings on the effectiveness of shrouding surcharges and can be rationalized through low cancellation costs.

Customer behavioural modelling of order cancellation in coupled ride-sourcing and taxi markets

In today's world, massive on-demand mobility requests are dispatched every hour on ride-sourcing platforms, however, customers later cancel quite a number of these confirmed orders. This paper makes the first attempt to look into this customer confirmed-order cancellation behaviour based on a two-month, hourly average dataset of Didi Express in Shanghai provided by Didi Chuxing. The mean ride distance and pick-up distance of cancelled orders are observed to be obviously longer than those of completed orders of the same time period, reflecting an obvious impact of travel cost on customer decisions of order cancellation. However, the correlation between the mean customer confirmed-order cancellation rate (COCR) and the mean customer waiting time for pick-up of cancelled orders is significantly negative. Shanghai, like many other cities around the world, has coupled ride-sourcing and taxi markets, and as such, this counter-intuitive phenomenon can be explained as an outcome of the lower (higher) chance of meeting vacant taxis while waiting for pick-up during peak (non-peak) hours. We formulate COCR as a function of customer waiting time for ride-sourcing vehicles and cruising taxis, the penalty strategy by the platform for cancellation of confirmed orders, and customers’ own characteristics (i.e., ride distance, value of time, perceived psychological cost of order cancellation, additional safety concern over ride-sourcing), and propose a system of nonlinear equations to depict the complex interactions between the ride-sourcing and taxi markets considering the probability of ride-sourcing cancellation after order confirmation. With the proposed model, we replicate the observed lower COCR under a higher demand rate and longer waiting time for pick-up through numerical examples, and highlight the potential improvement of platform profit that can be achieved by appropriately designed penalty/compensation strategies.

Assessment of the volcanic hazard of Mt. Paektu explosion to international air traffic using South Korean airspace

A volcanic eruption is one of the most critical natural hazards in air transportation. In the European region, the Eyjafjallajokull eruption in 2010 triggered extensive discussions and efforts to adopt a risk-based volcanic contingency management plan in civil aviation. However, there has been relative lack of such efforts in the Asia–Pacific region. In this paper, a hypothetical eruption scenario of Mt. Paektu is studied to evaluate its impact on international air traffic using South Korean airspace. Mt. Paektu is an active volcano, and man-made earthquakes caused by North Korea’s recent nuclear weapons tests have elevated concerns about the possibility of an eruption. Based on multiple route closure tolerance criteria, direct and indirect losses including system serviceability, cancellation cost and passenger losses were evaluated, utilizing air route network data set and six-day ash dispersal scenario. Under the zero tolerance, system serviceability ranged between 3 and 60%. System serviceability ranged between 51 and 100% under the most lenient tolerance of 50%. Flight cancellation costs were $231 M and $68 M under the zero and 50% tolerance criteria. More than 80% of flights and 77% of cancellation costs were associated with the Asian region, especially China and Japan. In summary, impact on international air traffic was significant, and the gaps according to variation in tolerance were evident. Decisions on tolerance criteria are critical and must consider trade-offs between aircraft damage and system serviceability. Moreover, airspaces of China and Japan need to be considered in conjunction with Korea to assess the volcanic hazards in the region.

To Buy or Not to Buy? Shrouding and Partitioning of Prices in an Online Shopping Field Experiment

We examine whether shrouding surcharges or partitioning prices raises demand in online shopping where consumers have very low costs of cancelling an initiated purchase process. In a field experiment with more than 34,000 consumers, we find that consumers in the online shop of a large German cinema initiate a purchase process more often when surcharges are shrouded or indicated separately, but they also drop out more often when the overall price becomes known at the check-out. In sum, the demand distribution is independent of the price presentation. This result qualifies previous findings on the effectiveness of such pricing practices and can be rationalized through low cancellation costs.

Prioritizing Surgical Cancellation Factors Based on a Fuzzy Best-Worst Method: A Case Study

Abstract Surgery is a potent source of income, and surgical cancellation is a significant issue for hospitals. Surgical cancellation costs a lot to both patients and hospitals. Reducing a surgical cancellation rate has a substantial effect on improving hospital management. This paper considers both the effects of surgical cancellation on patients and hospitals. In addition, it presents a fuzzy best-worst method (BWM) based on a failure mode and effect analysis (FMEA) method to evaluate surgical cancellation factors. To achieve this aim, the FMEA and three effective criteria are taken into consideration. The psychological impact of surgical cancellation is one of the effective criteria, which has never considered as the involved criterion. Finally, a real case study in a Shariati hospital in Tehran is conducted to demonstrate the application of the proposed method.

Unit Cost Buyback Problem

In this paper, we study the unit cost buyback problem, i.e., the buyback problem with a fixed cancellation cost for each canceled element. The input of the problem is a sequence of elements e1, e2, . . . , en where each element ei has a weight w(ei). We assume that the weights are in a known range [l, u], i.e., l ≤ w(ei) ≤ u for any i. Given the i th element ei, we either accept ei or reject it with no cost, where we can keep a set of elements that satisfies a certain constraint. In order to accept a new element ei, we can cancel some previously selected elements at a cost which is proportional to the number of elements canceled. Our goal is to maximize the profit, i.e., the total weights of elements accepted (and not canceled) minus the total cancellation cost occurred. We construct optimal online algorithms and prove that they are the best possible when the constraint is a matroid constraint or the unweighted knapsack constraint.

Simultaneous Train Rescheduling through Cancelling, Delaying and Re-Ordering Policies: Three-Phase Solution Method with Guaranteed Optimality

In this article, a new approach is presented to solve the double-track railway rescheduling problem, when an incident occurs into one of the block sections of the railway. The approach simultaneously considers three rescheduling policies: cancelling, delaying and reordering. To find the optimal conflict-free timetables compatible with the approach, a mathematical model and an exact three-phase solution method are proposed. The method is based on Branch-and-Bound (B&B) algorithm. The lower bound consists of two cost parts: the cost of deviation from the primary timetable and the cost of train cancellation. To generate an appropriate upper bound, the method exploits an innovative algorithm called "Local Left Shifting". A heuristic beam search technique is also developed for tackling the large-scale problems. An experimental analysis on two double-track railways of the Iranian network indicates that the proposed solution method provides the optimal solution in much shorter time, compared with the time taken to solve the mathematical model by CPLEX software. Based on the findings of this research, it is possible to optimally retrieve the primary timetable after incident occurrence during a pre-determined time horizon.

Proportional cost buyback problem with weight bounds

In this paper, we study the proportional cost buyback problem. The input is a sequence of elements e1,e2,…,en, each of which has a weight w(ei). We assume that weights have an upper and a lower bound, i.e., l≤w(ei)≤u for any i. Given the ith element ei, we either accept ei or reject it with no cost, subject to some constraint on the set of accepted elements. During the iterations, we could cancel some previously accepted elements at a cost that is proportional to the total weight of them. Our goal is to maximize the profit, i.e., the sum of the weights of elements kept until the end minus the total cancellation cost occurred. We consider a matroid and the unweighted knapsack constraints. For either case, we construct optimal online algorithms and prove that they are the best possible.

A Novel Train Rescheduling Approach in Double-Track Railways: Optimization Model and Solution Method Based on Simulated Annealing Algorithm

This paper presents a novel approach to solve the double-track railway rescheduling problem, when an incident occurs into one of the block sections of the railway. The approach restricts the effects of an incident to a specific time, based on which the trains are divided into rescheduled and unchanged ones, so that the latter retain their original time-table after the incident. The main contribution of this approach is the simultaneous consideration of three rescheduling policies: cancelling, delaying and re-ordering. A mixed-integer optimization model is developed to find optimal conflict-free time-table compatible with the proposed approach. The objective function minimizes two cost parts: the cost of deviation from the primary time-table and the cost of train cancellation. The model is solved by CPLEX 11 software which automatically generates the optimal solution of a problem. Also, a meta-heuristic solution method based on simulated annealing algorithm is proposed for tackling the large-scale problems. The results of an experimental analysis on two double-track railways of the Iranian network show an appropriate capability of the model and solution method for handling the simultaneous train rescheduling. The results indicate that the proposed solution method can provide good solutions in much shorter time, compared with the time taken to solve the mathematical model by CPLEX software.