Track: Revenue Management & Pricing
Are You Ready for the Post-Pandemic World? Adaptive Revenue Management Using Artificial Intelligence
Due to the disrupted supply chains, highly volatile supply and demand has become a norm for many industries since the start of the pandemic. Therefore, these industries need to be supply aware in their pricing. Although airline revenue management (RM) can address this problem, there is an increased need for more adaptive approaches as well as less rigidity in data requirements and assumptions, because many of these impacted industries have little experience with RM. The emerging “Data-Driven” approaches to RM could fill this gap. We present an innovative approach to RM that we call Direct Adaptive Neural Network Based RM (DiANNe). DiANNe is a non-conventional approach to RM as it skips demand forecasting and utilizes machine learning for generating prescriptions. It has an adaptive nature that handles volatility well. DiANNe not only makes RM accessible to more industries, it’s also robust to everchanging customer behavior. These properties make DiANNe more critical as we emerge from the pandemic.