Airline seat management with rejection-for-possible-upgrade decision

Airline seat management with rejection-for-possible-upgrade decision

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Article ID: iaor2003280
Country: United Kingdom
Volume: 35B
Issue: 5
Start Page Number: 507
End Page Number: 524
Publication Date: Jun 2001
Journal: Transportation Research. Part B: Methodological
Authors:
Keywords: programming: dynamic, yield management
Abstract:

The problem of determining optimal booking policy for multiple fare classes in a pool of identical seats is considered. Most of the previous studies assume that customers leave the booking system once they find that their requests are rejected. This study, on the other hand, assumes that these customers can be expected to upgrade to higher fare classes. A discrete time dynamic programming model is developed. It is found that the basic properties of the decision rule can be reduced to some sets of critical values.

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