P. Zouein and W. Abillama (Lebanon)
Optimization, Dynamic Programming
This paper addresses the problem of determining optimal
overbooking policies on a single flight leg with multiple
daily flights. In particular, it solves for the optimal
booking level to accept on each of n daily flights from an
origin to a destination point that minimizes the total cost
of denied boarding and revenue losses. The problem is
modeled and solved as a stochastic dynamic program
where optimal overbooking policies for a single origin
destination flight leg are derived for up to 3 daily flights.
An example illustrating the computation of optimal
booking levels using the policies derived from the
proposed model is shown for the case of Middle East
Airlines daily flights on the Paris-Beirut leg.