Customer selection problem with profit from a sideline

Son, Jae-Dong

doi:10.1016/j.ejor.2005.09.029

Cited by 7 publications

(7 citation statements)

References 16 publications

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“…Then the optimal admission criterion h i is unimodal in the number of customer orders i over (i , N ]; the managerial implication of this unimodality is the same as that stated in Section 9 of[25] (ŝ s<s 0 of C2). (iii) The fact that the optimal admission criterion h i is increasing on each of the two ranges,[0, i ] and (i , N ], implies that there exists a stable point of oscillation on each of the two ranges.…”

mentioning

confidence: 83%

“…The basic model with the aforementioned assumptions was introduced by Son and Ikuta [24] and Son [25]. In the former, they considered the due date and the penalty where only one customer order is allowed to be held in the system.…”

Section: Pricing Control Problemmentioning

confidence: 99%

“…In the latter where multiple customer orders are allowed to be held in the system, the properties of the optimal policies in the number of customer orders were clarified without considering the due date and the penalty. The model of this paper is an extension of [25], where the multiple servers are in the system. When the sideline profit is sufficiently large, the company naturally places a higher priority on the sideline and assigns some of the servers to 328 J.-D.…”

Section: Pricing Control Problemmentioning

confidence: 99%

“…(a) means that it is always optimal to continue the search when a small search cost with T (0)>c has to be paid and no sideline profit is obtained regardless of the number of idle servers. (b) represents the monotone property of the optimal admission/pricing policy, the implications of which were prescribed in [25]. This article introduced two opportunity losses, types I and II, which arise due to holding few customer orders and too many customer orders, respectively, and gave a description that the number of customer orders i in the system oscillates with an equilibrium point to avoid two opportunity losses.…”

Section: Theorem 42mentioning

confidence: 99%

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Optimal admission and pricing control problems in service industries with multiple servers and sideline profit

Son¹,

Ghamari²

2008

Appl Stoch Models Bus & Ind

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This paper deals with the problem of selecting profitable customer orders sequentially arriving at a company operating in service industries with multiple servers in which two classes of services are provided. The first class of service is designed to meet the particular needs of customers; and the company (1) makes a decision on whether to accept or to reject the order for this service (admission control) and (2) decides a price of the order and offers it to an arriving customer (pricing control). The second class of service is provided as a sideline, which prevents servers from being idle when the number of customer orders for the first class is less than the number of servers. This yields the sideline profit. A cost is paid to search for customer orders, which is called the search cost. In the context of search cost, the company has an option whether to conduct the search or not. In this paper, we discuss both admission control and pricing control problems within an identical framework as well as examine the structure of the optimal policies to maximize the total expected net profit gained over an infinite planning horizon. We show that when the sideline profit is large, the optimal policies may not be monotone in the number of customer orders in the system. OPTIMAL ADMISSION AND PRICING CONTROL PROBLEMS ‡ There exists a finite x )x , then z(x) = (>)a (see [26]). If F(w) is a uniform distribution on [a, b] with 0

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mentioning

confidence: 83%

Section: Pricing Control Problemmentioning

confidence: 99%

Section: Pricing Control Problemmentioning

confidence: 99%

Section: Theorem 42mentioning

confidence: 99%

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Optimal admission and pricing control problems in service industries with multiple servers and sideline profit

Son¹,

Ghamari²

2008

Appl Stoch Models Bus & Ind

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“…In their formulation, the former arrivals are controlled by only the admission policy, while the latter ones are sequentially controlled by both policies. Son [18] gave separate formulations of the admission and the pricing control problems, yet showing that both problems can be analyzed within an identical framework.…”

Section: Introductionmentioning

confidence: 99%

Optimal Switching Strategy between Admission Control and Pricing Control Policies with Two Types of Customers and Search Costs

Son

2015

Advances in Operations Research

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This paper presents a switching strategy between the admission control and the pricing control policies in a queueing system with two types of customers. For an arriving first-type customer, the decision maker has an option on which policy to choose between the two control policies; that is, one determines whether or not to admit the customer’s request for the service (admission control) or decides a price of the customer’s request and offers it to the customer (pricing control). The second-type customers are only served when no first-type customers are present in the system in order to prevent the system from being idle. This would yield an extra income, which we refer to as the sideline profit. The so-called search cost, which is a cost paid to search for customers, creates the search option on whether to continue the search or not. We clarify the properties of the optimal switching strategy as well as the optimal search policy in relation to the sideline profit in order to maximize the total expected net profit. In particular, we show that when the sideline profit is sufficiently large, the two optimal switching thresholds exist with respect to the number of first-type customers in the system.

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Serel

Erel

2008

Appl Stoch Models Bus & Ind

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Customer selection problem with profit from a sideline

Cited by 7 publications

References 16 publications

Optimal admission and pricing control problems in service industries with multiple servers and sideline profit

Optimal admission and pricing control problems in service industries with multiple servers and sideline profit

Optimal Switching Strategy between Admission Control and Pricing Control Policies with Two Types of Customers and Search Costs

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