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The newsboy problem: a stochastic two period model in airline seats inventory control

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The newsboy model concerns the determination of an optimal inventory replenishment level, given the uncertain demand, for perishable products. This work approaches that problem by formulating and analysing a stochastic two period model for airlines that explores an effective seats inventory control. It allows realistic assumptions such as cancellations, no-shows and overbooking. Furthermore, there are incorporated holding and shortage costs. Another assumption is that there exists consumer diversion. It is shown a numerically example, with results for the optimal overbooking quantity, when demand for reservations follows a Uniform Distribution.

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A Work Project, presented as part as the requirements for the Award of a Masters Degree in Management from the Nova School in Business and Economics

Palavras-chave

newsboy problem inventory overbooking diversion

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Licença CC