Yield Management: What Quantities of Airline Tickets to Sell at What Prices and What Times

Variables

Table 24.5 shows the variables that are used in this example.

Table 24.5: Variables

Variable Name

Interpretation

P1[class,option]

1 if price option is chosen for class in period 1; 0 otherwise

P2[i,class,option]

1 if price option is chosen for class in period 2 as a result of scenario i in period 1; 0 otherwise

P3[i,j,class,option]

1 if price option is chosen for class in period 3 as a result of scenarios i and j in periods 1 and 2, respectively; 0 otherwise

S1[i,class,option]

Sales for class in period 1 under price option and scenario i

S2[i,j,class,option]

Sales for class in period 2 under price option and scenarios i and j in periods 1 and 2, respectively

S3[i,j,k,class,option]

Sales for class in period 3 under price option and scenarios $i,j,k$ in periods 1, 2, 3, respectively

R1[i,class,option]

Revenue for class in period 1 under price option and scenario i

R2[i,j,class,option]

Revenue for class in period 2 under price option and scenarios i and j in periods 1 and 2, respectively

R3[i,j,k,class,option]

Revenue for class in period 3 under price option and scenarios $i,j,k$ in periods 1, 2, 3, respectively

TransferFrom[i,j,k,class]

Number of seats transferred from class under scenarios $i,j,k$ in periods 1, 2, 3, respectively

TransferTo[i,j,k,class]

Number of seats transferred to class under scenarios $i,j,k$ in periods 1, 2, 3, respectively

NumPlanes

Number of planes to use