Let’s ask ourselves a more realistic question, what about length of stay?
Combinations, combinations, and more combinations!
How to tackle the combinations problem and the two most used methods
How Bid-Prices work and the power of filtering demand. Kind of like Monopoly.
Revenue Managers are just like a lemon stand.
Although advanced, linear programming is just defining a problem.
Let’s formulate the problem and formalize the ideas.
How can we solve this in a step-by-step process.
How to use the step-by-step process to solve this problem
Bid prices are implicit values of the relaxation of the capacity constraint. Simply stated: how much would I be willing to pay for an extra room on a certain night, thus the minimal fare acceptable.
Finally, let’s put into action and see how can we create a deterministic bid price model from scratch.