Barry Smith

Past Awards

Impact Prize : Awardee(s)
2016 - Awardee(s)

The 2016 INFORMS IMPACT PRIZE is awarded to Peter Belobaba, E. Andrew Boyd, Tom Cook, Guillermo Gallego, Robert Phillips, Barry C. Smith, Kalyan Talluri and Garrett van Ryzin for contributions in revenue management.

Revenue management is the theory and practice of dynamically managing the price and availability of a portfolio of products or services to maximize profitability. Revenue Management was famously first developed to enable airlines to manage the prices and availability of their seat inventory following deregulation in 1978. During the 1980’s it spread from the airlines to other capacity-constrained service industries such as hotels, rental cars, and cruise lines. From the 1990’s through today it has become a mainstream business practice across a wide range of industries including not only airlines and hotels but also freight transportation, media, retailing, entertainment, consumer finance, and manufacturing. As the internet and the information economy has grown, revenue management has become even more critical to many businesses including Amazon, Airbnb, Google, Microsoft and UBER.

From its earliest days, the field of revenue management has been characterized by an active interchange between industry and academia. Revenue management has proven to be a deep and enduring topic for research. There are two specialty journals devoted the field of revenue management, as well as a Pricing and Revenue Management Section of INFORMS and an INFORMS Revenue Management and Pricing Conference which is attended by more than 100 practitioners and academics each year. Furthermore, academic research has resulted in approaches and algorithms that are routinely used to improve revenue-management systems used in industry that deliver additional revenues to companies while enabling access of scarce resources to customers.

For their pivotal role in the creation and wide-spread adoption of revenue management, INFORMS is pleased to award the 2016 Impact Prize to Peter Belobaba, E. Andrew Boyd, Tom Cook, Guillermo Gallego, Robert Phillips, Barry C. Smith, Kalyan Talluri, and Garrett van Ryzin.

Franz Edelman Award: Winner(s)
Winning material: Yield Management at American Airlines

Critical to an airline's operation is the effective use of its reservations inventory. American Airlines began research in the early 1960s in managing revenue from this inventory. Because of the problem's size and difficulty, American Airlines Decision Technologies has developed a series of OR models that effectively reduce the large problem to three much smaller and far more manageable subproblems: overbooking, discount allocation, and traffic management. The results of the subproblem solutions are combined to determine the final inventory levels. American Airlines estimates the quantifiable benefit at $1.4 billion over the last three years and expects an annual revenue contribution of over $500 million to continue into the future.

Access the winning project’s companion paper