A case-based seat allocation system for airline revenue management

Authors:
Pei-Chann Chang;Jih-Chang Hsieh;Chia-Hsuan Yeh;Chen-Hao Liu
Affiliations:
Department of Industrial Engineering and Management, Yuan-Ze University, Ne-Li, Tao-Yuan, Taiwan, R.O.C;Department of Finance, Vanung University, Chung-Li, Tao-Yuan, Taiwan, R.O.C;Department of Information Management, Yuan-Ze University, Ne-Li, Tao-Yuan, Taiwan, R.O.C.;Department of Industrial Engineering and Management, Yuan-Ze University, Ne-Li, Tao-Yuan, Taiwan, R.O.C
Venue:
ICIC'06 Proceedings of the 2006 international conference on Intelligent Computing - Volume Part I
Year:
2006

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Abstract

Airline companies usually implement revenue management to increase profits. The revenue management can be performed through seat inventory management. The current system to book seats is first-come first-served. This approach tends to sell low-price seats because low-price requests often appear earlier. It also results in low revenue. In this paper, an expected dynamic probability method and a case-based seat allocation system are proposed to enhance the performance of the seat inventory management. Extensive studies are conducted to compare the performance of first-come first-served method, expected dynamic probability method, and case-based decision support system. The result indicates that the case-based seat allocation system outperforms the other methods.