Authors
Jian Liu, Jian Chen, Rui Bo, Fanlin Meng, Yong Xu, Peng Li
Publication date
2023/3/1
Journal
European Journal of Operational Research
Volume
305
Issue
2
Pages
722-737
Publisher
North-Holland
Description
This study analyzes dynamic pricing in a non-preemptive M/M/1 service system in which customers exhibit patience in regard to waiting time. We use a stylized, single-server queue to incorporate customer patience into the queuing problem, with the assumption that customers will not enter the queue when the waiting time exceeds their inherent patience time, reflecting the decision whether to wait. We focus on queue design, structure, and revenue and consider two homogeneous and heterogeneous customer scenarios. Our findings show that, for homogeneous customers, price-raising and price-discounting strategies can mitigate revenue loss. We examined which policy is better for service providers in different scenarios. For heterogeneous customers, we draw two conclusions. First, a revenue-maximizing service provider should increase her priority fee if customers have patience in regard to waiting time …
Total citations
202220232024147
Scholar articles
J Liu, J Chen, R Bo, F Meng, Y Xu, P Li - European Journal of Operational Research, 2023