Airline Yield Management

Rules of the Game

  • There are five fare types, or classes, in coach, with ticket prices ranging from $500.00 (full-fare) to $205.00 (deeply discounted).
  • The booking process is separated into four booking periods.
  • Demands for every class in every booking period have different patterns, and passengers in different classes have different probabilities of not showing up for the flight ("no-shows").
  • There are 100 seats in the coach cabin of the plane.
  • To counteract the possibility of no-shows, you are allowed to overbook the coach cabin by up to 20% (i.e., you are allowed to make up to 120 bookings).

Important Airline Policies

  • No-shows holding full-fare tickets will be reimbursed in full for their tickets; all other no-shows will not get reimbursed.
  • If, due to overbooking, some passengers are denied boarding, they get re-booked on another flight and receive a conciliation coupon worth $200.00 each.



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