Optimization and estimation problems in airline yield management

• Main Author: McGill, Jeffrey I.
• Language: English
• Published: University of British Columbia 2011
• Subjects: Airlines > Reservation systems > Mathematical models
• Online Access: http://hdl.handle.net/2429/30652

This thesis addresses problems of optimization and estimation encountered in the process of airline yield management, also called airline seat inventory control. Optimality conditions are given for the problem of setting booking limits for multiple, stochastically independent demand classes that are booked in a nested fashion into a fixed pool of airline seats. These optimality conditions are compared with the approximations given by the EMSR method. Additional conditions are given for two stochastically dependent fare classes, and extensions are made that allow for incorporation of passenger goodwill and upgrades of passengers between fare classes. The model developed for the dependent demand case is also applied to the problem of determining an optimal overbooking limit in a single fare class. Finally, a methodology is developed for using multivariate multiple regression in conjunction with the EM method to estimate the parameters of demand distributions on the basis of historical demand data that have been censored by the presence of booking limits. === Business, Sauder School of === Operations and Logistics (OPLOG), Division of === Graduate