lecture15 - A History of Air Fares Capacity Control Chicago...

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e62: lecture 15 3/11/10 A History of Air Fares 1 1988 1990 } dinamo yields $1.4B incremental revenue revenue management era 1985 dinamo 1981 founding of 1986 bankruptcy of government controlled 1978 deregulation act e62: lecture 15 3/11/10 Capacity Control 2 New Orleans NY SF LA Chicago Fare Product Speci±cation Price 1 Economy SF-LA 8AM 12/11/10 LA-SF 1PM 15/11/10 Nonrefundable ... $120 2 First SF-Ch 8AM 12/24/10 Ch-NY 4PM 12/24/10 Refundable ... $2500 ... ... ... seat inventory determine “availability” e62: lecture 15 3/11/10 Idealized Allocation Model Fare products Seat categories Fare product speci±cation Prices Seats Seat inventory Fare product demand Allocation decisions Optimize revenue 3 max cx s . t . Ax b x d x 0 x ∈± N d ∈± N b ∈± M c ∈± N A ∈± M × N { 1 , . . . , N } { 1 , . . . , M } but demand is random! e62: lecture 15 3/11/10 Capacity Control Based on the Idealized Model Consider a current request for fare product
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This note was uploaded on 07/29/2011 for the course MS&E 111 at Stanford.

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lecture15 - A History of Air Fares Capacity Control Chicago...

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