A Passenger Revenue Management System

(RMS)
for a National Railway in an Emerging Asian
Economy (NREAE)
Goutam Dutta
1
Priyanko Ghosh
1

1
Indian Institute of Management
Ahmedabad-380015
India
Outline
Introduction and Motivation
Literature Search
Current Reservation System in NREAE
Optimization Model
Simulation of Passenger Demand
Forecasting Module
Expected Marginal Seat Revenue Approach
Recommendations

Introduction and Motivation
Revenue Management System
Work done by SNCF
Several steps taken by NREAE
A meeting with board member
Visits by Officials of NREAE

Introduction to NREAE
1. One of the five largest in the world
2. Runs 14000 trains daily with 9000 passenger
trains
3. 30 million passengers travel daily in 7083
stations
4. Revenue about 19 billion USD
Challenges of NREAE
The passenger segment is facing challenges
from low fare airlines which promise
customer satisfaction and less travel time

The freight sector is facing challenges from
trucks and other road carriers
Industries where Revenue Management applies
Perishable Services (Products)
Identification of Market Segmentation possible
Demand is Uncertain and Fluctuating
Fixed Capacity
High Fixed Cost
Low Marginal (Variable) Cost
Advanced Reservation Possible

6
Revenue Management System
Current Data Historical Data
Forecaster
Optimizer
System
Recommendations
Performance
Monitoring and
Reports
Revenue Management in Railways
As per Talluri and Van Ryzin, (2004) following
railways are using RM

AMTRACK

SNCF

Eurostar

VIA Rail Canada

Literature Search
Literature Search
There are about 25 papers on applications of
OR/MS in railroad

These papers deal various topic related to
IE/OR/MS and not in revenue management

A few applications in railways revenue
management
Literature Search
Williamson (1992) formulates two mathematical programming models
for network revenue management (stochastic and deterministic) but
finds no significant difference between them

Ciancimino et al. (1999) formulate a deterministic linear programming
model and a probabilistic non-linear programming model for railways
and show that the probabilistic model generates more revenue than the
deterministic model

Boyar (1999) analyzes the seat reservation problem by considering two
scenarios the price is the same for all tickets and it is proportional to
the distance - and solves the problem by considering deterministic and
concrete algorithms

Bharill et al. (2008) apply revenue management principles on one of the
trains of Indian Railways. They suggest a differential pricing strategy
on the basis of passenger demand estimates to increase railway revenue
Objective Impact
SNCF
To face the competition from
European railways and airlines they
developed well designed decision
support systems to attract
passengers
- Revenue increased by 10
million francs
- Costs decreased by 3%
Canadian Railways
To create a scheduling system for
railways
- Cost reduced by $300 million
- Total savings exceeded half a
billion dollars
Netherlands Railways
To develop a new timetable that
helps to operate a higher number of
trains and causes fewer train delays
Passenger traffic increased by
15%
- 87% of the trains reach their
destinations within 3
minutes of their scheduled
time
- Annual profit is around E10
million in 2007
German Railways
Increase revenues and reduce costs
through better capacity utilization
- Around 1.5% revenue
increased
- Relief trains are 30% lower in
2003 than in 2002
- Standing minutes are reduced
by
16% in 2003 than in 2002
Three Success Stories of
Management Sciences
Societe Nationale des Chemins de der
Frances RM [Source:Interfaces]
Deutsche Bahn (Not yet published) RM
[ Source: Personal Correspondence with
Dr. Andy Boyd ]
Canadian Pacific Railways - [Cost
Reduction Focus Source : Interfaces]
Revenue Management System
Current Data Historical Data
Forecaster
Optimizer
System
Recommendations
Performance
Monitoring and
Reports
Various Fare Classes of NREAE
Codes Extensions
1A First class air-conditioned
2A Air-conditioned 2-tier sleeper
FC First class
3A Air-conditioned 3-tier sleeper
CC Air-conditioned chair-car - only sitting accommodation
(individual chairs) is provided
EC Executive class, or First class air-conditioned chair-car -
only sitting accommodation (individual chairs) is
provided
SL Sleeper class
2S Second class sitting - only sitting accommodation with
bench style seats
Current Reservation System
NREAE has two types of reservation systems
1. PRS (Passenger Reservation System) and
2. UTS (Unreserved Ticketing System)

85% of tickets are booked by the PRS and 15% of tickets
are booked by the UTS (2012)_

The revenue of NREAE is approximately NC 931.59
billion (19.13 billion USD) from which one third is earned
from passenger coaches and two thirds from freight (2012)

The Passenger Reservation System (PRS) offers reserved
seats to passengers in any train from any counter of the
country
Current Reservation System
Advance booking starts 60 days prior to the day of
departure for all fare classes and for all trains

The advance reservations are made on FCFS (First Come
First Serve) basis

NREAE has introduced a booking system called Tatkal
(urgency based scheme) where one can book tickets two
days in advance of the day of departure by paying an extra
charge

A passenger who books ticket in Tatkal, has to pay the
total fare from origin to destination and as Tatkal quotas
are usually filled up Tatkal earning is constant
Railways booking centers offer seats to
Passengers in FCFS basis
Availability of seat Non availability of seat
Passenger asks for Tatkal (Urgent) quota
(2 days prior of the journey date)
Confirmed tickets are issued on a regular
basis
Tickets are not confirmed but overbooked in
Reservation Against Cancellations (RAC) and
Waiting List (WL) format
RAC ticket holders can board a reserved coach but are only assured sitting
accommodation even if there are no cancellations.
WL ticket holders are not even guaranteed such sitting accommodations and are
entirely unconfirmed at the time of booking.
Cancellations occur and RAC and WL ticket holders get converted to confirmed
tickets subject to the order of booking.
Availability of seat Non availability of seat
Confirmed tickets are issued on Tatkal
Booking Process
Revenue Management System
Current Data Historical Data
Forecaster
Optimizer
System
Recommendations
Performance
Monitoring and
Reports
Optimization Model
I NDI CES
i: Origin indexed by i
j: Destination indexed by j
k: Fare class indexed by k
t: Time period indexed by t

SETS
S: Set of all stations (1,2,3, ..n)
L: Links {(i,j) i c S, j c S, i<j} for all the origin destination
pair
K: Set of fare classes (k=1,2,3,.p)
T: Set of time period (t=1,2,3,.q)
PARAMETERS

= Revenue for fare class k c K for leg (i,j) c L and for time period t c T

= Expected Cancellations for fare class k c K for leg (i,j) c L and for time period t c T

= Expected Demand forecasted for fare class k c K for leg (i,j) c L and for time period t c T

= Total Capacity of the Train for time period t c T

= Non Tatkal booking allowed for fare class k c K and for time period t c T

= Tatkal booking allowed for fare class k c K and for time period t c T

= Cancellation charges for fare class k c K

VARI ABLES

= Number of tickets to be allocated for fare class k c K and leg (i, j) c L and for time period t c T

= Boolean variable for fare class k c K and seat number l and leg (i,j) c L for time period t c T


=1 if a seat number l is utilized for fare class k c K , leg (i,j) c L and for time period t c T
= 0 otherwise
t
ijk
R
t
ijk
EC
t
ijk
ED
t
CT
t
k
C
t
k
T
k
Ca
t
ijk
X
t
ijkl
Y
t
ijkl
Y
Objective Function

+


First part is the revenue earning from passenger allocations
Second part is the revenue earned from cancellations that is
a constant term
Third part is the revenue earnings from Tatkal that is a
constant term

= = =
+
=
1
1 2 1
]
1
[
j
i
n
j
p
k
t
ijk
EC
k
Ca
t
ijk
X
q
t
t
ijk
R

= =
p
k
q
t
t
nk
R
t
k
T
1 1
1
Subject to :

Total Capacity Constraint

Non Tatkal booking is less than the difference between Total capacity and Maximum
Tatkal booking allowed




<= - for all k e K and all t e T


Demand Constraint

Allocated seats should not exceed Expected Passenger Demand


<= for all i,j e L , k e K and for all t e T

=
p
k
t
k
C
1
t
CT

=
p
k
t
k
T
1
t
ijk
X
t
ijk
ED
Capacity Constraint:

<= for all i,j e L, k e K, (w=1,2.n-1) , and


for all t e T

Stations:
.
1 2 3 4 5 n-1 n

X
ij
= passenger boarding from source station i to destination station j.

Capacity Configuration:

Station 1:
X
12
+ X
13
+ X
14
+ X
15
+X
1(n-1)
+ X
1n
<= C
k

Station 2:
X
23
+ X
24
+X
25
+......+ X
2(n-1)
+ X
2n
+ X
13
+ X
14
+ X
15
+.+X
1(n-1)
+X
1n
<= C
k


Station 3:
X
34
+ X
35
+......+ X
3(n-1)
+ X
3n
+ X
14
+ X
15
++.X
1(n-1)
+.X
1n
+ X
24
+ X
25
+......+ X
2(n-1)
+ X
2n
<= C
k
..
..
Station n:
X
1n
+ X
2n
+ X
3n
+ +X
(n-1)n
<= C
k

+ =

=
n
w j
t
ijk
X
w
i 1 1
t
k
C
A seat can be utilized maximum 7 times

Boolean variable =1 if a seat number l is utilized for leg (i,j) c L ,fare class k c K,
and for time period t c T
=0 otherwise





<= 7 for all i,j e L , k e K ,(w=1,2.n-1) , and t c T


= for all i,j e L ,k c K and for all t e T


Non Negativity Constraint:

>= 0 for all i,j e L , k c K and for all t e T

t
ijkl
Y

=

+ =
w
i
n
w j
t
ijkl
Y
1 1

=
k
l
t
ijkl
Y
1
t
ijk
X
t
ijk
X
We collect data of train no.2901 which runs from a metro to
a mini metro over the year 2008
We consider maximum passenger allocations for an origin
destination pair as forecasted demand data
We solve the model in AMPL
(A Mathematical Programming Language) and CPLEX solver
version 11.2
The model was run for four fare classes, 14 stations and one
day, in AMPL/CPLEX 11.2
The adjusted problem deals with 54694 variables (54528
binary and 166 linear) and 15828 linear constraints (462750
non-zeros) and 1 linear objective (116 non-zeros)

Optimization Model
The average optimal daily revenue comes to around
NC 509272
We consider it as base stage and increase the
passenger demand by 10% in five stages
In each stage revenue is increased
Optimal revenue depends on passenger demand
So accuracy of forecasting of passenger demand
plays a crucial role in optimization model

Optimization Model
Optimization Model
1
st
AC
Revenue
2
nd
AC
Revenue
3
rd
AC
Revenue
Sleeper
Revenue
Total
Revenue
Increased
Revenue
(NC) (NC) (NC) (NC) (NC) (NC)
Stage 0 26004 112768 231272 139228 509272 -----
Stage 1 26004 112768 231335 139581 509688 416
Stage 2 26004 112768 231398 139994 510164 476
Stage 3 26004 112768 231398 140475 510645 481
Stage 4 26004 112768 231398 140956 511126 481
Stage 5 26004 112768 231398 141437 511607 481
Revenue Increment Due to Increased Passenger Demand
Revenue Management System
Current Data Historical Data
Forecaster
Optimizer
System
Recommendations
Performance
Monitoring and
Reports
Simulation of Passenger Demand
Uncertainty is a crucial feature of passenger demand
We conduct a simulation study to capture this stochastic
nature of demand
Passenger demand follows normal distribution (p-value of
KS statistic is <0.01)
For one year period we compute the mean and standard
deviation of passenger demand of origin destination and
use as inputs in simulation
We simulate passenger demand for 100 times for each fare
class and for origin destination and build the demand
matrix
We refer this as stage 0 or the base stage
We run our optimization model with these
demand matrices for 100 times and compute
the optimal revenue
We increase the mean and standard
deviation by 10% in each stage and simulate
passenger arrivals for each fare class and for
origin destination.
Simulation of Passenger Demand
Stage 1: Simulated passenger demand with 10% rise in mean
and standard deviation of passenger demand of Stage 0

Stage 2: Simulated passenger demand with 10% rise in mean
and standard deviation of passenger demand of Stage 1

Stage 3: Simulated passenger demand with 10% rise in mean
and standard deviation of passenger demand of Stage 2

Stage 4: Simulated passenger demand with 10% rise in mean
and standard deviation of passenger demand of Stage 3

Stage 5: Simulated passenger demand with 10% rise in mean
and standard deviation of passenger demand of Stage 4
Simulation of Passenger Demand
Simulation of Passenger Demand
We run our optimization model for each stage and
compute the mean and standard deviation of the optimal
revenues in 6 stages
Revenue (NC)
(Mean)
Revenue (NC)
(S.D)
Stage 0 508929.5 418.0308
Stage 1 509772.2 154.2017
Stage 2 510438.9 93.09297
Stage 3 511073.8 38.25811
Stage 4 511683.7 41.84407
Stage 5 512296.6 3.6
Variations of Optimal Revenue in Stochastic Scenario
Simulation of Passenger Demand
504000
505000
506000
507000
508000
509000
510000
511000
512000
513000
1 10 19 28 37 46 55 64 73 82 91 100
Number of Simulations
O
p
t
i
m
a
l

R
e
v
e
n
u
e
Stage 0
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
Comparison of Optimal Revenues in
Deterministic and Stochastic Cases
Optimal Revenue
(deterministic case)
Optimal Revenue
(stochastic case)
Differences in
Optimal revenues
Stage 0 509272 508929.5 - (342.5)
Stage 1 509688 509772.2 84.2
Stage 2 510164 510438.9 274.9
Stage 3 510645 511073.8 428.8
Stage 4 511126 511683.7 557.7
Stage 5 511607 512296.6 689.6
Revenue Management System
Current Data Historical Data
Forecaster
Optimizer
System
Recommendations
Performance
Monitoring and
Reports
We choose train no.2901 running between a
metro and a mini metro
We use April 2005-07 booking data as
inputs to predict the passenger arrivals of
April 2008
As maximum passengers travel from origin
to destination we concentrate on that sector
and do our analysis
Forecasting Module
We collect data from CRIS (Center for
Railways Information System) on passenger
arrivals for each fare class and for all origin
destination pairs
The key elements of the data format
includes journey date, booking date, class,
passenger source, passenger destination and
booked passengers
Forecasting Module
From this format we generate two major
variables for each fare class
(1) Days before departure
(2) Cumulative booking of passengers
We build booking curves for each fare class
and for origin and destination for April
2005-08
Forecasting Module
Booking Curve for 1
st
AC dated 5
th

April 2008
Cumulative Booking
0
2
4
6
8
10
12
14
-90 -35 -31 -24 -16 -11 -10 -9 -8 -6 -5 -3 -2 -1 0
Days before departure
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g
Booking Curve for 1
st
AC dated 18
th

April 2008
Cumulative Booking
0
2
4
6
8
10
-90 -42 -25 -9 -1 0
Days before departure
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g
Booking Curve for 2
nd
AC dated 8
th

April 2008
Cumulative Booking
0
50
100
150
-
9
0
-
5
8
-
2
9
-
2
2
-
1
9
-
1
5
-
1
1
-
7
-
4
-
1
Days before departure
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g
Booking Curve for 2
nd
AC dated 18
th

April 2008
Cumulative Booking
0
20
40
60
80
100
120
140
-
9
0
-
6
8
-
5
1
-
4
8
-
4
3
-
3
1
-
2
5
-
1
9
-
1
6
-
8
-
5
-
2
Days before departure
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g
Booking Curve for 3
rd
AC dated 16
th

April 2008
0
50
100
150
200
250
300
350
400
450
-
9
0
-
6
8
-
5
9
-
5
4
-
4
9
-
4
4
-
3
7
-
2
8
-
2
3
-
1
6
-
9
-
4
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g

Days before departure
Cumulative Booking
Booking Curve for 3
rd
AC dated 27
th

April 2008
Cumulative Booking
0
100
200
300
400
-
9
0
-
6
7
-
6
0
-
4
9
-
4
1
-
3
3
-
2
6
-
1
9
-
1
2
-
5
Days before departure
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g
Booking Curve for Sleeper dated 3rd
April 2008
Cumulative Booking
0
100
200
300
400
500
600
-
9
0
-
5
8
-
5
0
-
4
0
-
3
3
-
2
8
-
2
1
-
1
6
-
1
1
-
6
-
1
Days before departure
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g
Booking Curve for Sleeper dated
23rd April 2008
Cumulative Booking
0
100
200
300
400
500
600
700
-
9
0
-
7
8
-
7
3
-
6
8
-
5
3
-
4
6
-
3
8
-
2
6
-
1
8
-
1
3
-
8
-
3
Days before departure
C
u
m
u
l
a
t
i
v
e

B
o
o
k
i
n
g
Analyzing the booking curves we divide the booking
horizon into six parts
D
-21
(21 days prior to departure), D
-14
(14 days prior to
departure), D
-7
(7days prior to departure), D
-2
(2 days
prior to departure), D
-1
(1 day prior to departure) and
D
0
(day of departure)
We use additive and incremental pick up methods to
forecast final day bookings of April 2008 for each
fare class
We measure the forecast accuracy by Mean Absolute
Deviation (MAD) and Mean Absolute Percentage
Error (MAPE)
Forecasting Method
Error Measurement
Mean Absolute Deviation (MAD)
Find absolute difference between forecast and actual
Average over all observations

Mean Absolute Percentage Error
(MAPE)
Find absolute difference between forecast and actual
Find percentage of actual
Average over all observations
F1 F2 F7 F14 F21
Monday
MAD 6.73 19.075 34.75 31.235 38.53
MAPE 0.017458 0.049722 0.091039 0.081493 0.099355
Tuesday
MAD 11.896 18.932 34.3 43.9 54.684
MAPE 0.029215 0.045282 0.085304 0.110518 0.135143
Wednesday
MAD 7.698 20.1 51.8 39.852 50.218
MAPE 0.020625 0.053199 0.135678 0.107801 0.134797
Thursday
MAD 6.415 25.125 60.25 53.84 65.17
MAPE 0.014122 0.056793 0.140512 0.123157 0.145526
Friday
MAD 2.06 14.16 51.64 29.69 35.51
MAPE 0.005263 0.035672 0.127596 0.074114 0.09101
Saturday
MAD 5.59 16.59 49.04 37.25 41.75
MAPE 0.013651 0.040783 0.120435 0.092622 0.104424
Sunday
MAD 3.85 16.03 39.17 23.485 31.5
MAPE 0.009668 0.04187 0.098905 0.061326 0.080204
MAD and MAPE for Incremental Pick Up Method for 3rd AC
in April 2008
These forecasting methods work efficiently
in case of 2
nd
AC and 3
rd
AC followed by
sleeper but not accurate for 1
st
AC
Incremental performs better than additive
method
It produces MAPE less than 10% for 1,2 or
7 days prior to departure
Forecasting Module
Mean point forecast is difficult to predict

We calculate the forecast ranges of
passenger arrivals based on the standard
deviation of historical passenger bookings
and check the percentage of forecast
accuracy
Forecasting Module
D-1 D-2 D-7
1
st
AC 86% 83% 60%
2
nd
AC 100% 83% 76%
3
rd
AC 100% 96% 73%
Sleeper 100% 100% 43%
Forecasting Accuracy for Incremental Pick
up Method
We apply various conventional forecasting
methods other than revenue management
techniques

Linear regression and Time series methods

A Weighted Average Approach
Forecasting Module
We carry out linear regression separately
for each fare class and for different days
prior to departure
We summarize the MAD and MAPE for 3rd
AC in the following table
Forecasting Module
Forecasting Error for 3
rd
AC in Linear
Regression
Day before
Departure Mon Tue Wed Thu Fri Sat Sun
D
-1



MAD 5.53 9.07 6.32 6.8 5.22 7.99 3.66
MAPE 0.01 0.02 0.01 0.02 0.01 0.02 0.01
D
-2



MAD 38.3 11.7 13.1 18.8 5.91 22.3 14.5
MAPE 0.099 0.03 0.03 0.04 0.01 0.05 0.03
D
-7



MAD 33.51 44.7 51.8 67.3 59.9 51.5 53.4
MAPE 0.08 0.1 0.13 0.15 0.14 0.12 0.13
D
-14



MAD 36.67 55.7 47.7 73.7 59.8 42.7 52.8
MAPE 0.09 0.13 0.12 0.16 0.14 0.11 0.13
D
-21


MAD 32.85 57 47 82.4 62.9 45.8 53.2
MAPE 0.08 0.14 0.12 0.18 0.15 0.11 0.13
Time series is one of the most conventional
methods of forecasting

We compare the results obtained from Auto
Regressive Integrated Moving Average
(ARIMA) process for different days of the
week across all fare classes

Forecasting Module
MAPE for ARIMA Process
0
0.05
0.1
0.15
0.2
0.25
M
O
N
D
A
Y
T
U
E
S
D
A
Y
W
E
D
N
E
S
D
A
Y
T
H
U
R
S
D
A
Y
F
R
I
D
A
Y
S
A
T
U
R
D
A
Y
S
U
N
D
A
Y
Days of the Week
M
A
P
E
1AC
2AC
3AC
SL
For different days prior to departure different
forecasting methods work well
We introduce a forecasting method which is a
weighted average of Revenue Management
and Time Series methods
Instead of using different methods of
forecasting one may use a single model by
varying different weights to make short term
as well as long term forecasts
Forecasting Module
The Average MAPE from Different
Forecasting Methods
Fare Class 1st AC 2nd AC
Days before
Departure Reg RM WF Reg RM WF
D
-1
0.07 0.07 0.08 0.02 0.03 0.03
D
-2
0.10 0.12 0.14 0.04 0.06 0.07
D
-7
0.17 0.26 0.18 0.06 0.07 0.07
D
-14
0.18 0.29 0.36 0.05 0.08 0.08
D
-21
0.21 0.27 0.38 0.06 0.11 0.09
Fare Class 3rd AC Sleeper
Days before
Departure Reg RM WF Reg RM WF
D
-1
0.01 0.02 0.02 0.01 0.01 0.02
D
-2
0.04 0.05 0.06 0.03 0.03 0.04
D
-7
0.12 0.11 0.04 0.19 0.17 0.09
D
-14
0.13 0.09 0.06 0.17 0.16 0.09
D
-21
0.13 0.11 0.06 0.15 0.15 0.08
Revenue Management System
Current Data Historical Data
Forecaster
Optimizer
System
Recommendations
Performance
Monitoring and
Reports
Expected Marginal Seat Revenue
Passenger demand is uncertain
In real life scenario passenger arrivals are
arbitrary which brings forth the issue of
protection level
Usually low yield customers book first and
high yield customers book late
EMSR gives an optimal protection level for
high yield seats
In NREAE fares and seats are fixed
We consider a hypothetical situation where
four fare classes are homogeneous in nature
We implement EMSR in our railways data
and find the protection level for each fare
classes
Expected Marginal Seat Revenue
EMSR Comparison for 1
st
, 2
nd
,3
rd
AC
and Sleeper
0
200
400
600
800
1000
1200
1400
1600
0
7
2
1
4
4
2
1
6
2
8
8
3
6
0
4
3
2
5
0
4
5
7
6
6
4
8
7
2
0
7
9
2
8
6
4
9
3
6
1
0
0
8
1
0
8
0
Number of Seats
E
M
S
R
1st AC EMSR
2nd AC EMSR
3rd AC EMSR
SL EMSR
As seats are homogeneous throughout all
fare classes we have a total of 1116 seats in
the train
Among them 12, 94 and 278 seats can be
reserved for 1st AC, 2nd AC and 3rd AC.
Rest of the seats can be allotted to Sleeper
class.
Expected Marginal Seat Revenue
Recommendations
Forecasting module performs well for 1 or 2 days
prior to departure
So intermediate stations quota can be released 1 or 2
days before departure date
Excess demand of a train can be shifted to another
train sharing the same origin and destination
If no show information is stored in the data
warehouse we will get better patterns regarding
passenger behaviour and can analyze booking
process more efficiently

Thank You
Capacity of NREAE
Fare Class Capacity
1st AC 18
2nd AC 138
3rd AC 384
Sleeper 576
Booking Matrix
Days before departure D
0
D
-1
D
-2
D
-3
. . . D
-T

Day of departure 0 1 2 3 . . . T
1 b
1
a
11
a
12
a
13
a
1T

2 b
2
a
21
a
22
a
23
. . . a
2T

3 b
3
a
31
a
32
a
33
. . . a
3T

. . . . . . . . .
. . . . . . . . .
. . . . . . . .
k b
k
a
k1
a
k2
a
k3
. . . a
kT

Notations
i = Date of departure indexed by i i= 1,2,,k
j = Days before departure indexed by j j= 1,2,.,T
a
ij
= Booking on i
th
date of departure from j days before
departure for i= 1,2,,k and j= 1,2,.,T
b
i
= Booking on day of departure i.e. day 0 for i= 1,2,,k
A
ij
= Cumulative booking on i
th
date of departure from j days
before departure for i= 1,2,,k and j= 1,2,.,T
A
ij
=

a
ij
+

A
ij+1
for i
th
date of departure from j days before
departure
Cumulative Booking Matrix
Days before
departure D
0
D
-1
D
-2
D
-3
. . . D
-T

Date of
departure 0 1 2 3 . . . T
1 A
10
A
11
A
12
A
13
. . A
1T

2 A
20
A
21
A
22
A
23
. . . A
2T

3 A
30
A
31
A
32
A
33
. . . A
3T

. . . . . . . . .
. . . . . . . . .
. . . . . . . . .
k A
k0
A
k1
A
k2
A
k3
. . . A
kT

Additive Pick up Method
Sum of column =

Additive pick up from = =


= Booking on i
th
date from j days before departure
= Forecasted final day bookings on i
th
date from j days
before departure

= *

=
k
i
ij
A
1
j
D

j
D

j
r

=
=
k
i
ij
k
i
i
A
A
1
1
0
ij
B
ij
F
ij
F
ij
B
j
r
Incremental Pickup Method
Incremental pick up from to

=

= + + + ..+
j
D
1 j
D
j
r
( )
k
A A
k
i
ij ij
=


1
1
ij
F
ij
B
1
r
2
r
j
r
Multiplicative Pickup Method
Multiplicative pick up from to


=

= (1+ )(1+ )..(1+ )

j
D

1 j
D
j
r
k
A
A A
k
i
ij
ij ij

|
|
.
|

\
|

1
1
ij
F
ij
B
1
r
2
r
j
r
MAD and MAPE for Additive Pick Up Method for
3rd AC in April 2008
Days F
1
F
2
F
7
F
14
F
21

Monday
MAD 7.25 24.375 23.4225 106.6125 215.78
MAPE 0.018668 0.063141 0.060739 0.272733 0.550312
Tuesday
MAD 14.016 31.48 31.544 141.732 234.15
MAPE 0.033832 0.073218 0.068885 0.326871 0.536305
Wednesday
MAD 9.312 28.902 46.272 72.758 162.716
MAPE 0.024738 0.075469 0.124273 0.197385 0.428708
Thursday
MAD 7.235 32.3525 46.785 36.7625 89.95
MAPE 0.016161 0.074405 0.110557 0.083487 0.203463
Friday
MAD 2.94 22.01 42.9525 20.39 85.46
MAPE 0.00742 0.055099 0.10632 0.051219 0.214934
Saturday
MAD 6.2325 23.93 54.89 55.585 110.685
MAPE 0.015193 0.058711 0.135098 0.138784 0.275027
Sunday
MAD 3.35 22.975 15.2125 126.485 239.555
MAPE 0.0082 0.05878 0.03828 0.313862 0.586287
MAD and MAPE for Multiplicative Pick Up
Method for 3rd AC in April 2008
F
1
F
2
F
7
F
14
F
21

Monday
MAD 9.1875 24.8719 21.4098 121.504 265.511
MAPE 0.02365 0.06442 0.05482 0.31098 0.6777
Tuesday
MAD 14.016 32.6029 30.8474 174.504 298.035
MAPE 0.03383 0.07579 0.06414 0.39748 0.67591
Wednesday
MAD 9.312 29.7854 45.3163 92.6103 202.093
MAPE 0.02474 0.07762 0.12182 0.24674 0.52793
Thursday
MAD 7.235 30.7113 42.1568 40.2239 108.647
MAPE 0.01616 0.07032 0.09977 0.09053 0.25293
Friday
MAD 2.94 22.5546 42.1245 35.058 131.411
MAPE 0.00742 0.05645 0.10426 0.0859 0.32538
Saturday
MAD 6.2325 20.8648 48.1818 75.5487 156.326
MAPE 0.01519 0.05118 0.11861 0.18716 0.38611
Sunday
MAD 3.35 21.0683 17.3841 166.21 295.746
MAPE 0.0082 0.05411 0.04215 0.4114 0.72359


Indian Railways launches premium trains with dynamic
pricing that can be booked online only

Ticket fare: The dynamic fare pattern is similar to the one used by
airlines with it going up with rising demand. The fare applicable to each
day/transaction is indicated at the time of booking on the IRCTCs e-
ticketing website.
The special trains will have only AC 2 Tier and AC 3 Tier classes with Rajdhani-
like facilities, including catering. The Indian Railways experimented with this
model during Christmas season last year. It looks like they intend to implement
this model during every festival season, when demand exceeds the average.
How is it different from normal trains:
Advance Reservation Period (ARP) of these trains will be a maximum of 15 days.
The ticket fare follows a dynamic-pricing model, and fares will be much higher.
Tickets can be booked only online, via IRCTCs website. It will not be sold over the
reservation counter.
No wait-list tickets will be issued to passengers on these trains.
Tickets wont be refunded unless the train gets cancelled due to unforeseen
circumstances.
No concession is applicable in this train, irrespective of their age. However, after
charting, vacant berths will be offered at the current-day booking counters in the
originating stations.