Successful Internet service offerings can only thrive if customers are satisfied with service performance. While large service providers can usually cope with fluctuations of customer visits retaining acceptable Quality of Service, small and medium-sizes enterprises face a big challenge due to limited resources in the IT infrastructure. Popular services, such as justin.tv and SmugMug, rely on e...

Contract (custom) manufacturers of components and manufactured materials such as steel sell capacity under different contract terms to different buyers. In a common practice, the supplier offers a market standard price and lead time combination for products listed in its catalog. At the same time, it strikes annual contracts with some high-volume customers who require recurring delivery of a cu...

The techniques of revenue management have potential application in many industries – as long as customers view the resulting policies as being fair.

Revenue management has been successfully implemented in the airline industry since the deregulation in 1978. There have been very few comprehensive, rigorous studies of its practices and impact, however. In this paper we examine how revenue management practices affect airline performances such as loadfactor and revenue, and how revenue management practices are implemented in different market st...

The practice of Revenue Management has received widespread acceptance in the international hospitality industry yet a lack of best practice in terms of organizational integration persists. This paper follows the notion that revenue management is first and foremost a human activity, dependent on knowledge exchange and concerted decision within revenue management teams. One critical attribute of ...

Static game-theoretic models of bilateral bargaining assume that the seller knows his valuation for the item that is up for sale; that is, how the seller may determine this quantity is exogenous to these models. In this paper, we develop and analyze a stylized Markov decision process that endogenizes the seller’s computation of his marginal inventory valuation in an infinite horizon revenue man...

Revenue management (RM) is the art and science of predicting consumer behavior and optimizing price and product availability to maximize revenue. RM models, despite their success and popularity, still remain somewhat simplistic. The most critical flaw is that current RM models are designed under the assumption that demands are independent random variables. The models are readily extended to com...

We develop two classes of optimization models to maximize revenue in a restaurant (while controlling average waiting time as well as perceived fairness) that may violate the first-come-first-serve (FCFS) rule. In the first class of models, we use integer programming, stochastic programming, and approximate dynamic programming methods to decide dynamically when, if at all, to seat an incoming pa...

A well-studied problem in the literature on airline revenue (or yield) management is the optimal allocation of seat inventory among fare classes given a demand distribution for each class. In the literature thus far, passenger demand is an exogenous parameter. However, the seat allocation decisions of one airline affect the passenger demands for seats on other airlines. In this paper we examine...