Flexible Services and Manufacturing Journal | 2008
overbooking decisions over an airline network. The crucial observation behind our model is that if
the penalty cost of denying boarding to the reservations were given by a separable function, then the optimality equation for the joint capacity allocation and overbooking problem would decompose by the itineraries. Our approach exploits this observation by building a separable approximation to the penalty cost. In this case, we can approximately solve the optimality equation for the joint capacity allocation and overbooking problem by using the separable approximation in the boundary
condition of the optimality equation. Computational experiments indicate that our approach provides significant improvements over standard benchmark methods that are based on a deterministic linear programming formulation.
Sumit Kunnumkal is a Professor and Area Leader of Operations Management at the Indian School of Business (ISB). He holds a PhD in Operations Research from Cornell University. He received his MS in Transportation from the Massachusetts Institute of Technology and a B.Tech in Civil Engineering from the Indian Institute of Technology, Madras.
Professor Kunnumkal has previously taught at the Smith School of Business, Queen’s University, and has held visiting positions at the Singapore University of Technology and Design and Universitat Pompeu Fabra. His research interests lie in the areas of pricing and revenue management, retail operations, assortment planning, and approximate dynamic programming.
At ISB, he has taught in the PGP programme, the Fellow programme, and various Advanced Management and Executive Education programmes.
