Abstract: In this talk we will present a static and dynamic single leg airline revenue management model with overbooking. In this model it is assumed that the requests for fare class i tickets arrive ac- cording to a nonhomogeneous Poisson process and the different arrival processes are independent. Moreover each accepted request can cancel its reservation before departure and at the departure time no-shows may occur. A static policy is now given by a m-dimensional vector of which the ith component represents the closing time for fare class i. Among those policies we determine that policy with the highest expected revenue. As such this model can be seen as the static counter part of the dynamic continuous time airline overbooking model resulting in an optimal control problem and an alternative for the well-known EMSR heuristics. We will discuss the performance of the optimal static policy and compare it with the optimal dynamic policy.
(joint work with Semih Onur Sezer (Sabanci university), Behrooz Pourghanned (Ph.D student Ross Management School, Ann Arbor) and Muzaffer Arslan ( Ph.D student Department of Statictics and Operations Research Chapell Hill)
Bio: Hans Frenk joined the Faculty of Engineering and Natural Sciences at Sabanci university 4 years ago. He graduated from Utrecht University (master degree in mathematics) and did his Ph.D thesis (1984) within the field of renewal theory and regenerative processes at the Econometric Institute, Erasmus university, Rotterdam, The Netherlands. Through the years his main research interest is in optimization, convex and quasiconvex analysis and its connection to stochastic pro- cesses. At the moment his research is in applications of those techniques to problems in Manage- ment Science and Engineering. (maintenance, inventory control and revenue management). He published both in theoretical and applied oriented journals.