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Revenue Management Essay

857 Words4 Pages

Abstract
Revenue Management method was introduced after the deregulation of the U.S airlines in 1970’s. Like airline industry, railways also offer similar Revenue Management opportunities. With a research development of RM in Indian railways, we propose a dynamic optimization model in premium trains with multiple fares and time periods. Through RM we can optimize seat inventory allocations, wait list, cancellations and overbooking in order to maximize the overall revenue. Indian Railways get 20% of its passenger related revenue from its premium trains. Demand and supply also plays a major. For example during a peak seasons there are very few trains on certain routes, if we introduce more trains we could earn more revenues.
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In FY 2013-14 railway yielded Rs. 1298 Cr through tatkal tickets and the railways is planning to get income bost via Premium Tatkal Pricing which will work on dynamic pricing model on selected routes and an additional income of Rs 300 Cr is expected to be made thorugh this process ( Business Standard, 2014). During the peak season when the demand is very high there are shortage of rail seats but unlike airline industry passengers in the waiting list of getting a seat are allowed to travel through train, this leads to succefull overbooking. This generates huge revenue. Ticket booking and cacellation charges are also revenue boosters, the tickets boked through IRCTC.CO.IN has a booking charge simillarly it also has a cancellation charge associated with it. IRCTC also makes money from the advertisements on it sites, from Online travel agents like Yatra.com, Makemytrip.com etc who sell tickets from their websites ( DMU, 2013). IRCTC website generated an annual revenue of Rs 6748 Crores ( DMU, 2013).

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