R/EMSRb_internal.R

In RM2: Revenue Management and Pricing Package

EMSRb_internal = function (Fare = Fare, Mean = Mean, Var = Var, p_up = numeric(length(Fare)), cap = cap) {
    N_FProd <- length(Fare)
    # ASSURE CONSISTENCY OF THE INPUTS
    tmp <- sort.int(Fare, decreasing=T, method = "sh", index.return=TRUE)
    Fare <- tmp$x
    ind <- tmp$ix
    Mean <- Mean[ind]
    Var <- Var[ind]
    p_up <- p_up[ind]
    # INITIALIZE PROTECTION LEVELS
    p <- vector(mode="numeric", length(Fare))
    for (i in 1:(length(Fare)-1)) {
        # WEIGHTED AVERAGE REVENUE: wr
        wr <- sum(Fare[1:i]*Mean[1:i])/sum(Mean[1:i])
        # MEAN AGGREGATE DEMAND
        X <- sum(Mean[1:i])
        # STANDARD DEVIATION AGGREGATE DEMAND
        Sigma <- sqrt(sum(Var[1:i]))
        # COMPUTE CURRENT PROTECTION LEVEL
        p[i] <- qnorm((1 / (1 - p_up[i+1])) * (1 - Fare[i+1]/wr), mean=X, sd=Sigma)
    } # end for i
    p[length(Fare)] <- cap
    # INTEGER PROTECTION LEVELS
    p <- ceiling(p)
    p <- p * (p < cap) + cap * (p >= cap)
    names(p) <- as.character(Fare)
    return(p)
} # end function