DYNAMIC ALLOCATIONS FOR MULTIPRODUCT DISTRIBUTION

Consider the problem of allocating multiple products by a distributor with limited capacity (truck size), who has a fixed sequence of custom ers (retailers) whose demands are unknown. Each time the distributor v isits a customer, he gets information about the realization of the dem and for this customer, but he does not yet Know the demands of the fol lowing customers. The decision faced by the distributor is how much to allocate to each customer given that the penalties for not satisfying demand are not identical. In, addition, we optimally solve the proble m of loading the truck with the multiple products, given the limited s torage capacity. This framework can. also be used for the general prob lem of seat allocation in the airline industry. As with the truck in t he distribution problem, the airplane has limited capacity. A critical decision is how to allocate the available seats between early and lat e reservations (sequence of customers), for the different fare classes (multiple products), where the revenues from discount (early) and reg ular (late) passengers are different.