Multiproduct revenue management: An empirical study of Auto Train at Amtrak

This study involves working with Amtrak, the National Railroad Passenger Corporation, to develop a revenue management model. The Revenue Management Department at Amtrak provides the sales data of Auto Train, a service of Amtrak that allows passengers to bring their vehicles on the train. We analysed the demand from the sales data and built a mathematical model to develop a pricing system for Auto Train. An algorithm was developed to calculate the optimal pricing strategy that yields the maximum revenue. We further introduced three pricing policies Myopic policy, Static-Price heuristic, and Pseudo-Dynamic heuristics, as benchmarks for our dynamic programming solution. Because Auto Train is a real-world application of multiproduct revenue management, our findings make an important contribution to the revenue management literature.