Congestion-Based Leadtime Quotation and Pricing for Revenue Maximization with Heterogeneous Customers

Queueing Syst 73, 35–78 (2013). https://doi.org/10.1007/s11134-012-9288-8

The University of Auckland Business School Research Paper Series

Posted: 27 Oct 2021

Date Written: 2013

Abstract

This paper studies a queuing model where two customer classes compete for a given resource and each customer is dynamically quoted a menu of price and leadtime pairs upon arrival. Customers select their preferred pairs from the menu and the server is obligated to meet the quoted leadtime. Customers have convex–concave delay costs. The firm does not have information on a given customer’s type, so the offered menus must be incentive compatible. A menu quotation policy is given and proven to be asymptotically optimal under traditional large-capacity heavy-traffic scaling. Full paper available at https://doi.org/10.1007/s11134-012-9288-8

Keywords: Asymptotic optimality, Dynamic scheduling, Leadtime quotation, Dynamic pricing

Suggested Citation

Ata, Baris and Lennon Olsen, Tava, Congestion-Based Leadtime Quotation and Pricing for Revenue Maximization with Heterogeneous Customers (2013). Queueing Syst 73, 35–78 (2013). https://doi.org/10.1007/s11134-012-9288-8 , The University of Auckland Business School Research Paper Series, Available at SSRN: https://ssrn.com/abstract=3947476

Baris Ata (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Tava Lennon Olsen

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

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