Patent ID: 8645173

Claim:
A system, comprising: a network interface communicating with a memory; the memory communicating with a processor for enabling revenue maximization; and the processor, when executing a computer program, executes operations comprising: calculating, by the processor, a flight authorization level (AU) that minimizes an overbooking cost associated with the flight, the flight with a coach seating capacity (CAP), wherein the overbooking cost is based upon a spoiled seat (SS) cost and a denied booking (DB) cost, and wherein minimizing overbooking cost with respect to AU is determined by: ∑ n = 0 μ + 3 ⁢ σ ⁢ ⁢ P ⁡ ( x = n ) × [ SSCost n + DBCost n ] where: x=# no shows for a flight SSCost n =SSCost(max[n−(AU−CAP),0]) DBCost n =DBCost(max[(AU−CAP)−n,0]) x˜Binomial(AU, p=“No-Show-Rate”) P ⁡ ( x = n ) ≡ ( AU n ) ⁢ p n ⁡ ( 1 - p ) ( AU - n ) μ=AU×p σ=√{square root over (AU×p×(1−p))} wherein DBcost n is associated with the DB cost of an n th passenger that is DB and is determined by DB cost n =DDB n *[(1−ncf)*(voucher_amt*b*pv n +(ill_will+exp_invol_cost n )*(1−pv n )+HMT n )], where ncf=no compensation factor=the percentage of passengers denied boarding that do not qualify to be compensated, voucher_amt=an amount of a voucher offered to passengers who volunteer to DB, b: Breakage factor, the expected percentage of voucher dollars that will be used, pv n : given n passengers who are denied boarding to the flight, pv n is the expected percentage of volunteers; ill_will: Extra cost added due to had customer image and possible loss of customers due to involuntarily denying boarding to passengers; exp_invol_cost n : an expected payout to an involuntary DB passenger; HMT n =an expected accommodation cost of the n th DB passenger; DDB n =a double DB factor.