Revenue Management of a Make-to-Stock Queue

@article{Caldentey2002RevenueMO,
  title={Revenue Management of a Make-to-Stock Queue},
  author={Ren{\'e} A. Caldentey and Lawrence M. Wein},
  journal={Operations Research},
  year={2002},
  volume={54},
  pages={859-875}
}
Motivated by recent electronic marketplaces, we consider a single-product make-to-stock manufacturing system that uses two alternative selling channels: long-term contracts and a spot market of electronic orders. At time 0, the risk-averse manufacturer selects the long-term contract price, at which point buyers choose one of the two channels. The resulting long-term contract demand is a deterministic fluid, while the spot-market demand is modeled as a stochastic renewal process. An exponential… CONTINUE READING
Highly Cited
This paper has 20 citations. REVIEW CITATIONS