Revenue management problem in the aviation industry with optimal seat allocation model

  • MIO IMAI Waseda University
  • Tetsuya Sato Waseda University
  • Takayuki Shiina Waseda University
Keywords: revenue management, stochastic programming, overbooking


This study presents an optimization model that uses stochastic programming to optimally allocate seats and maximize the profit of the airline, considering 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. Therefore, business travelers willing to pay a higher fare will subsequently find no seats left, and revenue from such sales will be lost. While there are various needs that depend on the type of passenger, this study proposes an optimization model that uses stochastic programming as a method of maximizing the profit of the airline company by allocating seats appropriately and employing the concept of overbooking. 


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