A Hotelling queue model with probabilistic service

Xiaoya Xu, Zhaotong Lian, Xin Li, Pengfei Guo

Research output: Journal article publicationJournal articleAcademic researchpeer-review

8 Citations (Scopus)

Abstract

We study the pricing problem for a firm with two servers where heterogeneous customers can choose between deterministic service and probabilistic service. We find that different queueing priority policies do not affect the firm's revenue but affect the firm's optimal pricing strategies. Specifically, when the flexible customers (who choose probabilistic service) have a high priority, the optimal price of the deterministic service could be lower than the one of the probabilistic service in a small or moderate market.
Original languageEnglish
Pages (from-to)592-597
Number of pages6
JournalOperations Research Letters
Volume44
Issue number5
DOIs
Publication statusPublished - 1 Sep 2016

Keywords

  • Hotelling model
  • Priority
  • Probabilistic service
  • Queueing

ASJC Scopus subject areas

  • Software
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering
  • Applied Mathematics

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