Optimizing Distance-Based Fares and Headway of an Intercity Transportation System with Elastic Demand and Trip Length Differentiation
Document Type
Journal Article
Publication Date
2008
Subject Area
ridership - demand, policy - fares, economics - profitability, place - urban
Keywords
Waiting time, Trip length, Travel models (Travel demand), Travel distance, Travel demand, Taiwan, Sensitivity analysis, Profit maximization, Optimization, Optimisation, Interurban transportation, Intercity transportation, High speed trains, Headways, Formosa, Elastic demand, Distance based fares, China (Republic : 1949- ), Case studies
Abstract
An efficient fare structure combined with good service quality can stimulate demand and increase revenue. This paper presents an optimization approach for an intercity transportation system where demand is sensitive to fare and wait time and the fare sensitivity further varies with trip length. The approach jointly optimizes service headway and distance-based fare structure to maximize total profit, subject to service capacity and fleet size constraints. The optimal fares are also differentiated on the basis of trip length. An efficient solution method is developed and applied to solve the profit maximization problem. The model is applied to a case study of the Taiwan High-Speed Rail System. Numerical results, including optimal solutions and sensitivity analyses, are presented. Insights that may lead to managerial decisions are discussed.
Recommended Citation
Tsai, Feng-Ming, Chien, Steven, Spasovic, Lazar, (2008). Optimizing Distance-Based Fares and Headway of an Intercity Transportation System with Elastic Demand and Trip Length Differentiation. Transportation Research Record: Journal of the Transportation Research Board, 2089, pp 101-109.
