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Congestion-Based Lead-Time Quotation for Heterogenous Customers with Convex-Concave Delay Costs: Optimality of a Cost-Balancing Policy Based on Convex Hull Functions
2012
Operations Research
We consider a congestible system serving multiple classes of customers who differ in their delay sensitivity and valuation of service (or product). Customers are endowed with convex-concave delay cost functions. A system manager offers a menu of lead times and corresponding prices to arriving customers, who then choose the lead-time-price pair that maximizes their net utility (value minus disutility of delay and price). We investigate how such menus should be chosen dynamically (depending on
doi:10.1287/opre.1120.1117
fatcat:nhprjhwfn5btbmfp4z5gh4gt4m