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A Static Model in Single Leg Flight Airline Revenue Management

Author

Listed:
  • J. B. G. Frenk

    (Faculty of Engineering and Natural Sciences, Sabancı University, 34956 Tuzla, Istanbul, Turkey)

  • Behrooz Pourghannad

    (Department of Industrial and Systems Engineering, University of Minnesota, Minneapolis, Minnesota 55414)

  • Semih O. Sezer

    (Faculty of Engineering and Natural Sciences, Sabancı University, 34956 Tuzla, Istanbul, Turkey)

Abstract

Static models on single leg airline revenue management generally consider booking limits or protection limits as the main decision variables to control reservation requests. In the current paper, we provide an alternative framework in which the decision variables are the closing times of fare classes. In a continuous time model with nonhomogeneous Poisson arrivals, cancellations, and no-shows, we study the problem of finding optimal closing times to maximize the expected net revenue from a given flight. We analyze the value function, point out some easy cases, and bring an easily implementable dynamic programming based solution method. We also illustrate this method on some numerical examples.

Suggested Citation

  • J. B. G. Frenk & Behrooz Pourghannad & Semih O. Sezer, 2017. "A Static Model in Single Leg Flight Airline Revenue Management," Transportation Science, INFORMS, vol. 51(1), pages 214-232, February.
    • Handle: RePEc:inm:ortrsc:v:51:y:2017:i:1:p:214-232
    DOI: 10.1287/trsc.2016.0695
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    References listed on IDEAS

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