Research On Overbooking Of Airline Revenue Management

Revenue management has been the most popular scientific method ofmanagement and the hottest discussed-spot since 1970s. Overbooking is animportant part of it. In this paper, we study overbooking models and overbookingdecision support system. Firstly, we study the background and the history of airlinerevenue management development. We also summarize the developing history andresearch methods about overbooking since 1960s. After analyzing the situation ofaviation transport service of our country, we find out the actual problems and pointedout meaning of this study both in academic and practical application. Secondly, webuild up static overbooking models using queuing theory. We model the reservationsprocess as a Markov birth-and-death process and build up the dynamic overbookingmodel using dynamic programming, and analyze the object function to get optimalbooking-limit policy. Thirdly, we put forward a design of overbooking DSS, anddevelop a simple overbooking DSS. By analyzing an example of the airline, we findthat the dynamic overbooking model is viable , and the system is effective.