Revenue management and e-commerce

Abstract

We trace the history of revenue management in an effort to illustrate a successful e-commerce model of dynamic, automated sales. Our discourse begins with a brief overview of electronic distribution as practiced in the airline industry, emphasizing the fundamental role of central reservation and revenue management systems. Methods for controlling the sale of inventory are then introduced along with related techniques for optimization and forecasting. Research contributions and areas of significant research potential are given special attention. We conclude by looking at how revenue management is practiced outside of the airline industry, its relationship to dynamic pricing, and future directions for the discipline.