Case A BlueSky operates Flight 97, a nonstop flight from JFK to Salt Lake City that departs at 9:30 p.m. For this route they fly an Airbus A320 that can carry 146 pas- sengers. On the airplane, all seats are economy-class (there is no business or 1st-class), and the marginal cost of each additional passenger in these seats is negligible. All passengers on Flight 97 purchase one-way tickets on that flight alone, and therefore are not connecting from other flights operated by BlueSky. The airline has constructed a two-tier fare structure for this flight: Advance purchase tickets (i.e., nonrefund- able tickets purchased at least 14 days in advance) cost $114 one-way. Full-fare refundable tickets purchased at any time cost $174. There is heavy demand for advance purchase tickets, so BlueSky could sell out the aircraft with these discount passengers. Therefore, BlueSky's revenue management system may need to protect a certain number of seats for full-fare tickets. On March 5, 2007, BlueSky is setting its booking limits for the week of March 19, 2007 through March 25, 2007. To make these decisions, BlueSky's revenue managers have collected the daily demand for full- fare tickets over the previous 12 months. Note that these are estimates of actual demand, not the num- ber of tickets sold. These data are available in BlueSky Single-Leg A demand.xls. 1 Find the optimal (revenue-maximizing) protection level for full-fare seats and the optimal booking limit for economy-class seats for each day of the week beginning on March 19. You should find seven protec- tion levels and seven booking limits, the best possible pair for each day of that week. You may want to use a simple formula to calcu- late the protection level (see, for example, the end of 5 of Netessine and Shumsky 2002 2 ) Think carefully, however, about how you use the historical data to estimate F Q, the distribution of demand for full-fare tickets. 1 This Excel spreadsheet file can be found and downloaded from http://ite.pubs.informs.org 2 Netessine, S., R. Shumsky. 2002. Introduction to the theory and practice of yield management. INFORMS Trans. Ed. 2(1) 34-44. Available online at http://archive.ite.journal.informs.org/Vol3No1/ NetessineShumsky. 140 Additional information, including supplemental material and rights and permission policies, is available at http://ite.pubs.informs.org.

Days of Operation: Monday - Sunday (seven days per week) Data are Full-Fare ticket demand for 1 year

Date	Demand for Full-Fare Tickets (# seats)
3/5/06	106
3/6/06	69
3/7/06	98
3/8/06	80
3/9/06	85
3/10/06	104
3/11/06	65
3/12/06	99
3/13/06	62
3/14/06	68
3/15/06	69
3/16/06	70
3/17/06	119
3/18/06	121
3/19/06	77
3/20/06	69
3/21/06	55
3/22/06	78
3/23/06	101
3/24/06	120
3/25/06	102
3/26/06	62
3/27/06	57
3/28/06	69
3/29/06	82
3/30/06	86
3/31/06	106
4/1/06	120
4/2/06	68
4/3/06	57
4/4/06	76
4/5/06	61
4/6/06	57
4/7/06	58
4/8/06	49
4/9/06	124
4/10/06	61
4/11/06	54
4/12/06	64
4/13/06	71
4/14/06	147
4/15/06	148
4/16/06	96
4/17/06	76
4/18/06	78
4/19/06	56
4/20/06	56
4/21/06	83
4/22/06	62
4/23/06	84
4/24/06	40
4/25/06	42
4/26/06	71
4/27/06	45
4/28/06	73
4/29/06	73
4/30/06	121
5/1/06	39
5/2/06	52
5/3/06	34
5/4/06	56
5/5/06	59
5/6/06	75
5/7/06	73
5/8/06	48
5/9/06	43
5/10/06	57
5/11/06	42
5/12/06	45
5/13/06	59
5/14/06	65
5/15/06	61
5/16/06	31
5/17/06	54
5/18/06	60
5/19/06	57
5/20/06	73
5/21/06	48
5/22/06	52
5/23/06	37
5/24/06	43
5/25/06	37
5/26/06	97
5/27/06	82
5/28/06	51
5/29/06	54
5/30/06	34
5/31/06	24
6/1/06	42
6/2/06	52
6/3/06	79
6/4/06	28
6/5/06	44
6/6/06	30
6/7/06	21
6/8/06	41
6/9/06	88
6/10/06	65
6/11/06	43
6/12/06	45
6/13/06	18
6/14/06	34
6/15/06	49
6/16/06	39
6/17/06	72
6/18/06	69
6/19/06	31
6/20/06	24
6/21/06	35
6/22/06	47
6/23/06	66
6/24/06	72
6/25/06	45
6/26/06	31
6/27/06	39
6/28/06	40
6/29/06	22
6/30/06	88
7/1/06	72
7/2/06	73
7/3/06	56
7/4/06	39
7/5/06	52
7/6/06	35
7/7/06	65
7/8/06	54
7/9/06	55
7/10/06	43
7/11/06	41
7/12/06	31
7/13/06	34
7/14/06	54
7/15/06	74
7/16/06	67
7/17/06	33
7/18/06	45
7/19/06	38
7/20/06	46
7/21/06	63
7/22/06	82
7/23/06	84
7/24/06	47
7/25/06	48
7/26/06	51
7/27/06	47
7/28/06	73
7/29/06	62
7/30/06	93
7/31/06	31
8/1/06	33
8/2/06	53
8/3/06	57
8/4/06	93
8/5/06	75
8/6/06	39
8/7/06	47
8/8/06	54
8/9/06	32
8/10/06	61
8/11/06	47
8/12/06	85
8/13/06	45
8/14/06	27
8/15/06	60
8/16/06	45
8/17/06	34
8/18/06	80
8/19/06	68
8/20/06	76
8/21/06	44
8/22/06	43
8/23/06	41
8/24/06	43
8/25/06	73
8/26/06	62
8/27/06	68
8/28/06	38
8/29/06	31
8/30/06	31
8/31/06	31
9/1/06	110
9/2/06	77
9/3/06	74
9/4/06	33
9/5/06	63
9/6/06	26
9/7/06	29
9/8/06	66
9/9/06	54
9/10/06	58
9/11/06	39
9/12/06	37
9/13/06	34
9/14/06	47
9/15/06	46
9/16/06	68
9/17/06	65
9/18/06	60
9/19/06	49
9/20/06	38
9/21/06	36
9/22/06	46
9/23/06	83
9/24/06	47
9/25/06	44
9/26/06	37
9/27/06	28
9/28/06	56
9/29/06	78
9/30/06	57
10/1/06	52
10/2/06	28
10/3/06	32
10/4/06	45
10/5/06	62
10/6/06	72
10/7/06	56
10/8/06	63
10/9/06	41
10/10/06	41
10/11/06	24
10/12/06	25
10/13/06	80
10/14/06	79
10/15/06	76
10/16/06	35
10/17/06	52
10/18/06	42
10/19/06	50
10/20/06	65
10/21/06	77
10/22/06	74
10/23/06	58
10/24/06	64
10/25/06	75
10/26/06	52
10/27/06	86
10/28/06	64
10/29/06	74
10/30/06	40
10/31/06	62
11/1/06	53
11/2/06	69
11/3/06	78
11/4/06	102
11/5/06	101
11/6/06	87
11/7/06	106
11/8/06	79
11/9/06	61
11/10/06	110
11/11/06	109
11/12/06	99
11/13/06	82
11/14/06	65
11/15/06	63
11/16/06	109
11/17/06	141
11/18/06	76
11/19/06	77
11/20/06	132
11/21/06	139
11/22/06	207
11/23/06	61
11/24/06	150
11/25/06	151
11/26/06	143
11/27/06	106
11/28/06	54
11/29/06	70
11/30/06	79
12/1/06	54
12/2/06	153
12/3/06	95
12/4/06	100
12/5/06	94
12/6/06	69
12/7/06	100
12/8/06	114
12/9/06	106
12/10/06	89
12/11/06	83
12/12/06	75
12/13/06	104
12/14/06	44
12/15/06	96
12/16/06	106
12/17/06	110
12/18/06	87
12/19/06	78
12/20/06	90
12/21/06	117
12/22/06	163
12/23/06	172
12/24/06	112
12/25/06	84
12/26/06	133
12/27/06	83
12/28/06	104
12/29/06	211
12/30/06	156
12/31/06	181
1/1/07	102
1/2/07	98
1/3/07	70
1/4/07	139
1/5/07	79
1/6/07	89
1/7/07	113
1/8/07	85
1/9/07	73
1/10/07	44
1/11/07	98
1/12/07	122
1/13/07	74
1/14/07	119
1/15/07	69
1/16/07	89
1/17/07	58
1/18/07	105
1/19/07	100
1/20/07	129
1/21/07	65
1/22/07	79
1/23/07	78
1/24/07	97
1/25/07	93
1/26/07	98
1/27/07	95
1/28/07	84
1/29/07	121
1/30/07	85
1/31/07	68
2/1/07	84
2/2/07	113
2/3/07	84
2/4/07	99
2/5/07	91
2/6/07	99
2/7/07	77
2/8/07	86
2/9/07	118
2/10/07	82
2/11/07	111
2/12/07	46
2/13/07	80
2/14/07	73
2/15/07	53
2/16/07	148
2/17/07	135
2/18/07	57
2/19/07	102
2/20/07	78
2/21/07	85
2/22/07	84
2/23/07	78
2/24/07	82
2/25/07	56
2/26/07	95
2/27/07	98
2/28/07	65
3/1/07	65
3/2/07	107
3/3/07	112
3/4/07	89

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