System for Prediction of Materialization of a Reserved Purchase

Abstract

The present invention provides a system for predicting the likelihood of materialization of pending reservations for the purchase of perishable commodities. Details pertaining to perishable commodities for which reservations for purchase have been made in the past, are gathered and analyzed as are details pertaining to perishable commodities for which reservations for purchase are currently pending. Based upon the analysis, the likelihood that a particular pending reservation will actually be purchased or “materialize” is determined and this information is utilized for yield management.

Description

BACKGROUND OF THE INVENTION[0001]1. Field of the Invention[0002]This invention relates generally to purchasing and reservation systems and, in particular, the present invention relates to improvement of yield management with respect to perishable commodities such as airline seats, hotel rooms and the like.[0003]2. Description of the Related Art[0004]Common carriers such as commercial buses, trains, and airlines, and service industries such as hotels and rental car companies, face complex issues when conducting strategic and operational planning. Businesses of this type deal with “perishable commodities” which are defined as commodities that cannot be inventoried and share three common characteristics: perishability, “fixed” capacity, and segmentability. Perishability means that each commodity ages or becomes unavailable, and thus has no value, after a certain date, time or similar temporal event. “Fixed” capacity implies a high cost of adding an incremental unit such that capacity i...

AI Technical Summary

Problems solved by technology

Common carriers such as commercial buses, trains, and airlines, and service industries such as hotels and rental car companies, face complex issues when conducting strategic and operational planning.

“Fixed” capacity implies a high cost of adding an incremental unit such that capacity is regarded as static and unchanging.

Given the relatively wide selection of carriers available to airline passengers, and the ease with which reservations can be made and changed, a failure in any of these areas by an airline is likely to result in a migration of passengers to other airlines.

Similarly, the passenger may not know with any certainty what time he or she will be able to leave London on a return flight.

While providing convenience for the air passenger, such reservation practices make it particularly difficult for airlines to assure that all flights depart without empty seats.

In reality, however, it is impossible to predict precisely how may reservations will not materialize; thus, airlines frequently end up with either too few seats sold, thereby losing revenues by flying aircraft with empty seats, or too many seats sold, requiring the airlines to “bump” passengers onto the next available flight to their destination.

While most airlines will in some manner compensate passengers that have been bumped, for example, by providing them with vouchers good towards future flights on the airline, free hotel accommodations, and the like, such a practice, is costly for the airlines, is usually extremely inconvenient to the airline traveler, and can lead to once-loyal passengers migrating to a competitor airline.

However, none of the prior art systems attempt to make such an analysis.

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