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An adaptive method for generating demand inputs to airline seat inventory control models

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  • Popovic, Jovan
  • Teodorovic, Dusan

Abstract

In order to increase the passenger load factor and total profit, most airlines offer several different fares to passengers on the same flight. Seat inventory control is the process of assigning the available number of seats to different fare classes. During the last three decades, various aspects of this problem have been considered in the literature. The basic input data for the existing airline seat inventory models are the demand distributions for seats in particular fare classes. Statistical data as a base for forecasting future passenger demand are very often not available (opening a new route, significant changes in fares, the appearance of competitive carriers, etc.). The current models are not able to handle cases where no prior historical data is available. This paper attempts to develop an approach to deal with this problem. The adaptive airline seat inventory control, which is proposed, is based on the Bayesian approach. The model developed is illustrated by numerical examples.

Suggested Citation

  • Popovic, Jovan & Teodorovic, Dusan, 1997. "An adaptive method for generating demand inputs to airline seat inventory control models," Transportation Research Part B: Methodological, Elsevier, vol. 31(2), pages 159-175, April.
    • Handle: RePEc:eee:transb:v:31:y:1997:i:2:p:159-175
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    References listed on IDEAS

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