Author ' s personal copy Optimal reservation policies and market segmentation

@inproceedings{Georgiadis2014AuthorS,
  title={Author ' s personal copy Optimal reservation policies and market segmentation},
  author={Georgios Georgiadis and Christopher S. Tang},
  year={2014}
}
When operating in a market with heterogeneous customers, a service firm (e.g., a car rental company or a hotel) needs to manage its capacity so as to maximize its revenue. To gauge the potential demand, a service firm often allows each customer to reserve a unit of service in advance. However, to avoid the loss associated with “no-shows”, service firms may require a non-refundable deposit. To determine an optimal reservation policy with a non-refundable deposit, we consider the case in which… CONTINUE READING

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