9
Breaking Down Willingness-to-Pay in RM
www.pros.com
FIGURE 5
Visual representation of the efficient
frontier. Class V lies below the efficient
frontier and thus is inefficient.
FIGURE 6
Transformed demand and fares calculated. Since V class is inefficient, the transformed fare is $0.
0
500
Demand
Revenue
1000
1500
2000
2500
3000
3500
M
Q
The final step in the process is to perform an aggregation
of the transformed fares to bring them closer to the level
of the daily fares. This step is performed in order to reduce
the number of transformed fares created. PROS RM
Advantage has a variety of aggregation options available,
which can be configured in the system.
Since the transformed fare is the representation of the
incremental revenue for a given class, this is now used
when comparing a fare to the bid price for the purposes of
determining availability. PROS RM Advantage outputs the
necessary data for consumption by the availability
calculator. PROS RTDP Advantage is seamlessly integrated
with RM Advantage, allowing the system to send real-time
updates of new bid prices to RTDP. Once this data is in
RTDP, the availability is calculated by comparing the
transformed fare to the bid price. If RTDP does not find the
transformed fare, the system falls back to the daily fare
provided by RM Advantage.
B
V
0 10 20 30 40 50 60
Class
Priceable
Demand
Cumulative
Priceable Demand
Transformed
Demand
Fare
Cumulative Revenues
from Priceable Passengers
Transformed
Fare
M 10 10 10 $200 $2,000 $200
Q 10 20 10 $150 $3,000 $100
B 10 30 10 $110 $3,300 $30
V 20 50 0 $65 $3,250 $0
