SC&L SEMINAR SERIES :: Air Cargo Overbooking Using a Discrete Show-up Rate Distribution
Most airlines overbook their actual capacity (for both passengers and cargo), since part of the booked demand often does not show up at the flight departure. One of the key elements of overbooking is a model that accurately predicts the show-up rate of the current bookings. Given the increasing importance of cargo within their business, most major airlines now take a closer look at the estimation of the show-up rates for cargo bookings. We investigated the effectiveness of an alternate show-up rate estimator and demonstrated the benefits of a discrete estimator for cargo overbooking. Tested on real world data from a major airline as well as simulated data, the study shows that improved estimation of the show-up rate can have a significant impact on profits and customer service.
Students and faculty are invited to remain after the seminar for a coffee and snacks reception sponsored by The Logistics Institute.