Seat inventory control for sequential multiple flights with customer choice behavior

Authors:
Changkyu Park;Junyong Seo
Affiliations:
College of Business Administration, University of Ulsan, Republic of Korea;College of Business Administration, University of Ulsan, Republic of Korea
Venue:
Computers and Industrial Engineering
Year:
2011

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Abstract

This paper considers a seat inventory control problem in which flights depart sequentially and passengers purchase available seats depending on customer choice behavior. Customer choice behavior can lead to either a horizontal shift or a booking loss when a desired fare class is unavailable. This problem is mathematically challenging and intractable via exact mathematical models. As an alternative heuristic approach, this paper develops a simulation-based greedy grid-search algorithm and illustrates simulation experiments using the newly developed algorithm. This paper obtains encouraging numerical results with the approach proposed here, but additional studies are required for accommodating more general assumptions such as booking arrival patterns, booking control mechanisms (e.g., cancellation and overbooking) and strategic customer behavior.