Unconstraining the Passenger Demand for Rail Yield Management at Trenitalia

The Yield Management System (YMS) described in this article has been developed by IBM for Trenitalia, main Italian and 3rd European railway undertaking, with 24 Million passengers and more than 260 High Speed Trains (“Frecce”) offered per day on average in 2017 first half, delivering good results in a period of raising competition. The YMS forecasts the unconstrained demand, using an additive method with an emphasis and a multiplicative correction, to account for censored data, allowing a capacity allocation optimization per Origin-Destination (O&D), and fare cluster. The system has been implemented gradually to most trains “Frecce” at Trenitalia, and since 2005 it has forecasted and optimized approximatively 4 Million model instances: nearly 120 Billion train-date-class-O&D-fare decisions.