Nesting Control in a Mixed Ticket System for Railways Consisting of Regular and Flexible Products

Ticket allocations in a mixed ticket system (MTS) containing flexible products is a revenue management (RM) distribution method introduced from the civil aviation industry to the railways. This allocation method has been studied in recent years, but there is a need for further research to address the problem of rejecting high-priced ticket requests due to the first-come, first-served principle. To address this, we introduced a hybrid control strategy covering different fare levels and origin-destination (OD) pairs to control the stock of tickets under an MTS, and optimize the ticket allocation benefits. First, we refined the demand using a nested logit model (NLM), and established two types of ticket quota allocation models based on whether the demand was determined or not. The solution was used as the data input for a ticket sales simulation of the pre-sale period. Second, we generated demand samples based on a truncated normal distribution and set hybrid nesting rules adapted to the MTS. Finally, a ticket sales simulation was conducted according to the demand sample and ticket quota scheme. Through a case study analysis, we evaluated the difference between the hybrid nesting control and the traditional control methods under different demands, discounts, fluctuation coefficients, and other conditions. The results showed that there were advantages with a 1.707−12.708% increase in revenue after adopting a hybrid nesting approach in the MTS