A dynamic airline seat inventory control model and its optimal policy

A dynamic airline seat inventory control model and its optimal policy

0.00 Avg rating0 Votes
Article ID: iaor2003277
Country: United States
Volume: 49
Issue: 6
Start Page Number: 938
End Page Number: 949
Publication Date: Nov 2001
Journal: Operations Research
Authors: ,
Keywords: production, yield management
Abstract:

We consider an airline seat inventory control problem with multiple origins, one hub, and one destination. Passengers from the origins fly to the destination via the hub. Seat capacity of the hub–destination flight is fixed. Demands at origins are assumed to obey the Poisson process. To maximize the expected revenue, management faces decisions on allocating seats among competing origin–destination routes. This study presents a stochastic control model and develops optimal control rules. The basic model is subsequently distended to consider multiple fares on each route, time-dependent demands, and booking control on an extended network. A numerical example shows that optimal seat control is simple and efficient.

Reviews

Required fields are marked *. Your email address will not be published.