Seats Allotment Optimization for China Railway Operation Management

Inventory control is an important branch of revenue management. In railway industry inventory means seats. Applications of revenue management in many fields are increasingly, including railway industry. To achieve the desired results, the specific application environment must be considered. The features of China's railway are discussed firstly, and then a method of demand forecast and a model of seats allotment with objective to maximize the seat load factor are proposed. The allotment method is adapted to multi seat classes on multi segments under the condition of fares relative fixed in China and also meet the need of opening pricing in future. Some trains are chosen as the object for illustrative analysis, and the result indicate that the method is useful to improve the seat load factor. Additionally it is also effective to make the seats more in line with the trends of passenger flow, and reduce the probability and amount of long-distance tickets randomly cutting into short ones during sales process.