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This thesis investigates methodologies for improving the demand responsiveness of transportation systems through flexibility. The methodologies propose advances both in demand and supply models having a focus on supply-demand interactions. The demand side enables to understand the underlying travel behavior and is important to identify the most important aspects of flexibility that needs to be offered with new transportation alternatives. Supply models that integrate supply-demand interactions lead to more efficient and flexible decision support tools with integrated decision problems. Furthermore the supply models enable to understand the impact of flexibility on transportation operations with appropriate representation of flexibility aspects. The main study area of the thesis is air transportation however we believe that the methodological contributions of the thesis are not limited to any mode and have the potential to provide improvements in various systems. In the context of demand modeling, advanced demand models are studied. In the first place, hybrid choice models are developed in the context of a mode choice study motivated by a rich data set. Attitudes and perceptions of individuals are integrated in choice modeling framework and an enhanced understanding of preferences is obtained. Secondly, an air itinerary choice model is developed based on a real dataset. A mixed revealed preferences (RP) and stated preferences (SP) dataset is used for the estimation of the demand model. A demand model is obtained with reasonable demand elasticities due to the existence of the SP data. Advances in demand models can be exploited early in the planning phase when deciding on the capacity. For this matter an integrated airline scheduling, fleeting and pricing model is studied with explicit supply-demand interactions represented by the air itinerary choice model. The integrated model simultaneously decides on schedule design, fleet assignment, pricing, spill, and seat allocation to each class. Several scenarios are analyzed in order to understand the added-value of the integrated model. It is observed that the simultaneous decisions on capacity and revenue bring flexibility in decision making and provide higher profitability compared to state-of-the art models. The main reference model is called the sequential approach that solves the planning and revenue problems sequentially representing the current practice of airlines. The explicit integration of the demand model brings nonlinearities which cannot be characterized as convexity/concavity. For the solution of the model a heuristic method is implemented which iteratively solves two sub-problems of the integrated model. The first sub-problem is an integrated schedule planning model with fixed prices and the second sub-problem is a revenue management problem with fixed capacity. The heuristic is found to provide better quality feasible solutions, in considerably reduced computational time, compared to the mixed integer nonlinear solver BONMIN. Local search techniques are embedded in the heuristic method which enable to obtain better feasible solutions compared to the sequential approach in reasonable computational time even for instances that are similar to real flight networks. In order to reduce the complexity of the problem a logarithmic transformation of the logit model is proposed. The transformation results with a stronger formulation of the revenue problem. Price is the only explanatory variable of the logit model that is defined as a decision variable of the optimization model. However the methodology is flexible for other specifications. The reformulation of the model is again a mixed integer non-convex problem however as illustrated with examples and the airline case study, the model can be handled easier. In order to obtain valid bounds on the revenue a piecewise linear approximation is proposed for the non-convexities in the model. In the last part of the thesis, we focus on analyzing the impact of flexibility by a new design of aircraft called Clip-Air. The main property of Clip-Air is the flexible capacity due to the decoupling of the wing and the capsules (cabin). One, two, or three capsules can be attached under the wing and the configuration of Clip-Air can be adapted to the demand volume. Clip-Air is the main motivation for the contributions of the thesis in the context of supply modeling. The developed integrated models are therefore used in order to carry out a comparative analysis between Clip-Air and standard aircraft. It is found that Clip-Air utilizes the available capacity more efficiently and carries more passengers with less allocated capacity for several scenarios. A sensitivity analysis is performed for different realizations of cost figures. In a nutshell it is observed that the solutions are improved as the level of flexibility is increased, in other words as we move from standard systems to flexible alternatives and from classical planning models to integrated models with explicit representation of demand.