Name
Abstract | ||
|---|---|---|
We consider a rental firm with two types of customers. Contract customers pay fixed, prenegotiated rental fees and expect a high quality of service. Walk-in customers have no contractual relations with the firm and are “shopping for price.” Given multiple contract and walk-in classes, the rental firm has to decide when to offer service to contract customers and what fees to charge walk-in customers for service. We formulate this rental management problem as a problem in stochastic control and characterize optimal policies for managing contract and walk-in customers. We also consider static, myopic controls that are simpler to implement, and we analytically establish conditions under which these policies perform optimally. Complementary numerical tests provide a sense of the range of systems for which myopic policies are effective. |
Year | DOI | Venue |
|---|---|---|
2007 | 10.1287/mnsc.1060.0651 | Management Science |
Keywords | Field | DocType |
myopic policy,walk-in customer,walk-in class,myopic control,rental firm,contract customer,capacity rationing,rental management problem,prenegotiated rental fee,complementary numerical test,multiple contract,uncertain durations,quality of service,rentals,services,dynamic programming,stochastic control | Revenue management,Economics,Optimal control,Service quality,Microeconomics,Quality of service,Rationing,Renting,Rate of return,Stochastic control | Journal |
Volume | Issue | ISSN |
53 | 3 | 0025-1909 |
Citations | PageRank | References |
23 | 1.72 | 19 |
Authors | ||
2 | ||
Name | Order | Citations | PageRank |
|---|---|---|---|
| Noah Gans | 1 | 613 | 66.60 |
| Sergei Savin | 2 | 339 | 31.76 |