ABSTRACT
This chapter presents the mechanism of the seat inventory control for flight-based Revenue Management (RM) systems. The approach to treat the single-leg RM problem is to formulate the problem as a dynamic programming model. Flight-based RM systems are used by air carriers that adopt a point-to-point network structure. For any flight in the point-to-point network structure, the objective of the seat inventory control is to determine the number of seats to be allocated for each booking class considered for the flight. In the dynamic seat inventory control, estimates of future booking requests at various times before departure are required to calculate the optimal protection levels for the unbooked seats on the flight. Flight-based seat inventory control problems were first solved by Littlewood's rule. Belobaba extends Littlewood's rule to multiple nested fare classes and introduces the term Expected Marginal Seat Revenue (EMSR) for the general approach.
