Optimal overbooking strategies in the airlines using dynamic programming approach in continuous time

The authors propose a novel approach to solve the long-standing challenge of airline overbooking management. They solve the problem using dynamic programming with an industrial setting characterised as near-to-perfect competition where airlines strategically overbook their flights to control their market shares instead of a more conventional setting with a revenue maximisation. The theorised optimisation problem is constructed using a terminal utility criterion and with the application of the Hamilton-Jacobi-Bellman equation. The analysis expands on four most commonly applicable overbooking strategies, and the results provide guidance on how airlines can choose a strategy to pursue an optimisation solution best suited to them.

• Record URL:
  https://doi.org/10.1016/j.tre.2019.07.001
• Record URL:
  http://www.sciencedirect.com/science/article/pii/S1366554519300250
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/13665545
• Supplemental Notes:
  • © 2019 Elsevier Ltd. All rights reserved. Abstract reprinted with permission of Elsevier.
• Authors:
  • Alavi Fard, Farzad
  • Sy, Malick
  • Ivanov, Dmitry
  • 0000-0003-4932-9627
• Publication Date: 2019-8

Language

• English

Media Info

• Media Type: Web
• Features: Figures; References; Tables;
• Pagination: pp 384-399
• Serial:
  • Transportation Research Part E: Logistics and Transportation Review
  • Volume: 128
  • Issue Number: 0
  • Publisher: Elsevier
  • ISSN: 1366-5545
  • Serial URL: http://www.sciencedirect.com/science/journal/13665545

Subject/Index Terms

• TRT Terms: Airlines; Dynamic programming; Optimization; Overbooking; Yield management
• Subject Areas: Administration and Management; Aviation; Operations and Traffic Management;

Filing Info

• Accession Number: 01712824
• Record Type: Publication
• Files: TRIS
• Created Date: Jul 29 2019 11:03AM