A dynamical management model for accepting reservations

The paper considers a dynamical management problem for accepting reservations of airplane seats. When the penalty for the airline company canceling an accepted reservation is increasing as a period approaches to the flight day, how many reservations must the company accept or cancel in each period? The paper shows that the optimal policy has two levels zn and &ztilde;n (¸≥zn) in the n-th period áperiod? The paper shows that the optimal policy has two levels