Abstract
Expected marginal seat revenue (EMSR) is a well-known method for airline seat inventory control airlines. However, this method employs a static model to study the dynamic reservation process, and does not take into account the risk tolerance of policy makers. Expected marginal seat utility (EMSU) replaces revenue by utility, which addresses the real situation of seat inventory control. However, there is still a lack of multi-leg seat control algorithms based on EMSU. Therefore, using EMSU and bucket algorithms, this paper applies the Markov decision-making process to simulate the flight reservation process and builds a dynamic multi-leg seat inventory control model. Experimental results validate the effectiveness of the proposed method.
Highlights
Airline seat inventory control is about “selling the appropriate seat to the right person at the right time” [1]
The most well-known airline seat inventory control method today is the expected marginal seat revenue (EMSR) method proposed by Belobaba [2]
A reservation limit produced by EMSR cannot be changed as the reservation process progresses
Summary
Airline seat inventory control is about “selling the appropriate seat to the right person at the right time” [1]. The most well-known airline seat inventory control method today is the expected marginal seat revenue (EMSR) method proposed by Belobaba [2]. Because this method is easy to understand and easy to implement, it was quickly adopted by many airline companies. EMSR has become the classic airline seat inventory control method and the normal foundation of seat optimization algorithms. The method does not consider the risk in the decision-making process [3] To address these two shortcomings, the research community has recently proposed the expected marginal seat utility (EMSU) method [3,4]. A model based on the virtual bucket and EMSU ideas is proposed in order to solve the multi-leg problem
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