Revenue Management Problem via Stochastic Programming in the Aviation Industry

Mio Imai, Tetsuya Sato, Takayuki Shiina*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

This paper presents an optimization model using stochastic programming to secure the optimum seat and maximizing the profit of the airline in consideration of overbooking. Airline seat inventory control involves selling the right seats to the right people at the right time. If an airline sells tickets on a first-come, first-serve basis, it is likely to be occupied by leisure travelers and late bookers. Generally, business travelers willing to pay a higher fare will subsequently find no seats left, and revenue from such sales will be lost. The airline allows overbooking, accepting more reservations than seats to minimize losses. While there are various needs that depend on the type of passenger, we propose an optimization model using stochastic programming as a method of maximizing the profit of the airline company by securing seats appropriately and employing the concept of overbooking.

Original languageEnglish
Title of host publicationModelling, Computation and Optimization in Information Systems and Management Sciences - Proceedings of the 4th International Conference on Modelling, Computation and Optimization in Information Systems and Management Sciences - MCO 2021
EditorsHoai An Le Thi, Hoai Minh Le, Hoai An Le Thi, Tao Pham Dinh
PublisherSpringer Science and Business Media Deutschland GmbH
Pages145-157
Number of pages13
ISBN (Print)9783030926656
DOIs
Publication statusPublished - 2022
Event4th International conference on Modelling, Computation and Optimization in Information Systems and Management Sciences, MCO 2021 - Hanoi, Viet Nam
Duration: 2021 Dec 112021 Dec 13

Publication series

NameLecture Notes in Networks and Systems
Volume363 LNNS
ISSN (Print)2367-3370
ISSN (Electronic)2367-3389

Conference

Conference4th International conference on Modelling, Computation and Optimization in Information Systems and Management Sciences, MCO 2021
Country/TerritoryViet Nam
CityHanoi
Period21/12/1121/12/13

Keywords

  • Overbooking
  • Revenue management
  • Stochastic programming

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Signal Processing
  • Computer Networks and Communications

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