Korean Management Science Review (경영과학)

The Korean Operations Research and Management Science Society (한국경영과학회)
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A Seat Inventory Management Model in the Presence of Dependent Demands

종속적 수요를 반영하는 좌석재고 할당 모형

  • Kim, Sang-Won (College of Business Administration, University of Ulsan)
  • 김상원 (울산대학교 경영대학 글로벌경영학)
  • Received : 2010.01.05
  • Accepted : 2010.06.05
  • Published : 2010.07.31
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Abstract

When airlines sell the same seats on an air flight at different fares, demand for a fare class depends on demand for other fare classes due to demand dependency. Demand dependencies occur when customers will buy other fare class tickets if the originally requested fare were unavailable, or when customers postpone their purchase decisions in anticipation of reopening of the lower fare in the next period. Demand dependency as a result customer buying behavior has a considerable profit implication, which was ignored in many earlier studies. We investigate the impact of demand dependency on the optimal booking limits and the expected revenues under a single-period and a two-period setting. We show how to find optimal booking limits of the problem and provide numerical examples to illustrate the impact.

Keywords

References

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