Robust Capacity Control in Revenue Management: A Literature Review

Abstract

Revenue management is one of the classical topics in operations research. In recent 10 years, robust optimization methodology motivated a rapid growing amount of literature on robust revenue management. This stream of research does not rely on strict prior assumptions on distribution of random demand in classical revenue management theory but is capable to maintain tractable and to derive interesting structural properties of optimal solution. In this paper, we first briefly introduce theoretical basis of revenue management and then provide detailed review of literature on robust revenue management. Then potential directions of future research are identified.