15.071 | Spring 2017 | Graduate

# The Analytics Edge

8.2 Airline Revenue Management: An Introduction to Linear Optimization

## 8.2 Airline Revenue Management: An Introduction to Linear Optimization

### Quick Question

Using the visualization we created in the previous video, answer the following questions:

Suppose that our demand for regular seats remains the same (100) but our demand for discount seats goes down to 100. Will our optimal solution change?

Explanation In the first case, our optimal solution will not change because we are only offering 66 discount seats. So even if the demand goes down to 100, we are not meeting the demand. But in the second case, we can only offer 50 discount seats. So our airplane will not be full, and our optimal solution will change to 100 regular seats and 50 discount seats.

Now suppose that our demand for regular seats remains the same (100) but our demand for discount seats goes down to 50. Will our optimal solution change?

Explanation In the first case, our optimal solution will not change because we are only offering 66 discount seats. So even if the demand goes down to 100, we are not meeting the demand. But in the second case, we can only offer 50 discount seats. So our airplane will not be full, and our optimal solution will change to 100 regular seats and 50 discount seats.

## Course Info

Spring 2017
##### Learning Resource Types
Lecture Videos
Lecture Notes
Problem Sets with Solutions