CHOICE-BASED SEATING POSITION MODEL WITH UNDISTINGUISHED MULTI-LINES IN REVENUE MANAGEMENT

Abstract

In revenue management, there are models which aim to maximize revenue by controlling policy for uncertain demands throughout a booking horizon. The models are called dynamic models. One of the applications of the dynamic models is reservation system which offers available seats for customers’ requests. Recently, the system has allowed us to choose our booking seat position. However, the dynamic models in revenue management have not been included customers’ selection behavior for seating position. This paper proposes choice-based seating position model with undistinguished multi-lines that is a dynamic model considered with the customers’ selection behavior for seating positions. Approximate solutions for this model are calculated by Choice-based Deterministic Linear Programming (CDLP) and decomposition approximation which are used in choice-based network revenue management models. This paper suggests that CDLP is more effective than decomposition approximation for the choice-based seating position model, even through some reports in revenue management suggested that decomposition approximation could derive higher revenue than CDLP in their models.