A DYNAMIC MODEL WITH RESOURCES PLACED ON SINGLE LINE IN REVENUE MANAGEMENT

Abstract

Recently, a seating position can be often selected when a plane or bullet train ticket is reserved. Specially, for theater and stadium, it is important to decide how to assign reservations to seats. This paper proposes a dynamic model where seats’ resources are located at a single line with considering seats position that have already been assigned. An analysis has been conducted and the results show that, 1) optimal policy for an arriving request is to allocate it to one side of the edges of the adjacent vacancies, 2) if all of the resources are vacant at beginning time for booking, then the model corresponds to a single-leg model with multiple seat bookings and single fare class in Lee and Hersh (1993), 3) it is not necessarily optimal that a request is allocated to the less adjacent seats’ vacancy. Finally, this paper proposes an algorithm to solve the optimal policy using above results and conducts numerical examples.