Conclusions
Belobaba’s [1987] leg-based “EMSR rule” focuses on the price discrimination aspect of revenue management for a single flight leg.
- It allocates capacity among different fare classes by setting equal the expected marginal revenue of each fare class on each leg.
However, since the primary focus of most railroad revenue management problems is on traffic mix optimization and not on price discrimination, the traditional leg-based “EMSR” approach really does not address well the central issue of railroad revenue management.