Conditions are determined under which (a) the sum of forecasts of sales in market segments is preferred to a forecast of the whole market and (b) a forecast of an individual market segment is preferred to a forecast obtained through proration of a forecast of the whole market. The comparisons in (a) and (b) are also applied to the problem of forecasting for several time periods into the future.forecasting, statistics: time series
The paper presents a model for determining an overbooking policy for an airline. Of the three criteria chosen, the first two ensure that the probability of a rejection and the expected rejection level do not exceed given limits, and the third determines the loss incurred by rejecting a passenger relative to the profit of carrying one, thereby permitting maximization of the expected gain. The following three cases are considered: (a) Single-leg flight carrying a single type of passenger; (b) Single-leg flight carrying two types of passengers, and (c) Two-leg flight. It is assumed that all types of passengers generate the same profit for a given flight-leg, and differ only in probability of cancellation.
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