| Author: | Grossman, T. A. Jr. Brandeau, M. L. |
| Title: | Optimal pricing for service facilities with self-optimizing Customers |
| Journal: | European Journal of Operational Research
2002 : AUG, VOL. 141:1, p. 39-57 |
| Index terms: | PRICES PRICING QUEUING THEORY SERVICE MANAGEMENT CUSTOMERS |
| Language: | eng |
| Abstract: | Many service industries (e.g., walk-in clinics, vehicle inspection facilities, and data-processing centers) have customers who choose among congested facilities, and select the facility with the lowest combination of travel cost plus congestion cost at the facility. In general, customers over-utilize attractive facilities, causing higher costs than if customers were assigned to facilities to minimize total costs. Optimal facility prices induce customers to select facilities that minimize total cost. The authors find optimal facility prices and show they equal charging customers for the impact (net costs and benefits) they cause for others. The authors explore a rich flexibility that allows a range of optimal prices, useful when negotiating the implementation of facility fees. |
SCIMA