Question
We have 3 airports: San Francisco (SFO), Denver (DIA), and St. Louis (STL), and two flight-legs (resources): SFO-DIA and DIA-STL. We want to sell 3
We have 3 airports: San Francisco (SFO), Denver (DIA), and St. Louis (STL), and two flight-legs (resources): SFO-DIA and DIA-STL. We want to sell 3 itineraries (products): SFO-DIA, DIA-STL, and SFO-DIA-STL. Suppose you are in time period t in the booking window. Assume that we have at most one product request in every time period. A part of the value function for time period t + 1 has been computed and given in the following table.
0 | 1 | 2 | 3 | |
---|---|---|---|---|
0 | 0 | 600 | 900 | 1000 |
1 | 300 | 700 | 1000 | 1300 |
2 | 400 | 800 | 1100 | 1300 |
3 | 500 | 850 | 1100 | 1300 |
Remaining capacity for SFO-DIA
For example, if the remaining capacity on flight leg SFO-DIA is 2 and the remaining capacity on flight leg DIA-STL is 1, then the value of the value function at time period t+ 1 is Vt+1([2, 1]) = 800.
(a) Assume that the remaining capacity on flight leg SFO-DIA is 1 and the remaining capacity on flight leg DIA-STL is 2 at time period t. Suppose we get a request for a SFO-DIA flight for $150. Is it optimal to accept a this request? Why?
(b) Assume that the remaining capacity on flight leg SFO-DIA is 2 and the remaining capacity on flight leg DIA-STL is 3 at time period t. Is it optimal to accept a request for a SFO-DIA-STL itinerary for $275 at time period t? Why?
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