An aircraft acquisition decision model under stochastic demand

This study proposes the probabilistic dynamic programming model to address the stochastic demand issue in aircraft acquisition problem. A probable phenomena is defined to comprehend the uncertain state variables so that the targeted level of service could be achieved profitably by the airline company. The objective function and the constraints have a linear expression with respect to the decision variables, and hence the proposed model is then converted as a linear programming model. The proposed model and the solution method are then examined with an illustrative case study to determine the number and the types of new aircraft that should be purchased at every time period. The results show that the proposed methodology is viable in providing the optimal solution.