Mohammad Modarres - Sharif University of Technology, Tehran, Iran
Mehdi Sharifyazdi - Sharif University of Technology, Tehran, Iran

In this paper, we formulate capacity allocation problems in a Revenue Management structure. In this model, it is assumed the production apacity is stochastic. There are two groups of customers demanding this capacity. The price for each group as well as the penalty for overbooking is also different for two groups. The model is developed mathematically and we propose an analytical solution method. The properties of optimal solution and the behavior of objective function is also analyzed.

Revenue Management / Capacity Allocation / Stochastic Capacity / Seat Inventory Control