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It is a current airline industry practice t o upgrade passengers from the economy cabin t o the business cabin at no additional cost to the passengers. Incorporating this practice, this paper deals with a single-flight-leg multi-fare class seat inventory control problem. A discrete-time dynamic programniing model for finding the optimal booking policy is developed. It i s found tha t the booking policy can be reduced to some set. of critical values.

A DYNAMIC MODEL FOR A TWO-CABIN YIELD MANAGEMENT WITH FREE UPGRADING DECISION