Journal article

Yield management at {A}merican {A}irlines

Smith B, Leimkuhler J, Darrow R ...see all

Interfaces, vol. 22, issue 1 (1992) pp. 8-31

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Critical to an airline's operation is the effective use of its reservations
inventory. {A}merican {A}irlines began research in the early 1960s
in managing revenue from this inventory. {B}ecause of the problem's
size and difficulty, {A}merican {A}irlines {D}ecision {T}echnologies
has developed a series of {OR} models that effectively reduce the
large problem to three much smaller and far more manageable subproblems:
overbooking, discount allocation, and traffic management. {T}he results
of the subproblem solutions are combined to determine the final inventory
levels. {A}merican {A}irlines estimates the quantifiable benefit
at 1.4 billion over the last three years and expects an annual revenue
contribution of over 500 million to continue into the future.

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  • Bary C Smith

  • John F Leimkuhler

  • Ross M Darrow

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