Congestion-Based Lead-Time Quotation for Heterogenous Customers with Convex-Concave Delay Costs: Optimality of a Cost-Balancing Policy Based on Convex Hull Functions

@article{Akan2012CongestionBasedLQ,
  title={Congestion-Based Lead-Time Quotation for Heterogenous Customers with Convex-Concave Delay Costs: Optimality of a Cost-Balancing Policy Based on Convex Hull Functions},
  author={Mustafa Akan and Barış Ata and Tava Lennon Olsen},
  journal={Oper. Res.},
  year={2012},
  volume={60},
  pages={1505-1519}
}
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 the… 

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