Abstract
Allocation of a limited capacity of resources among several customer types is a critical decision encountered by many manufacturing and service firms. We tackle this problem by focusing on a hospital setting and formulate a general model that is applicable to various resource allocation problems of a hospital. To this end, we consider a system with multiple customer classes that display different reactions to the delays in service. By adopting a dynamic-programming approach, we show that the optimal policy for a system involving both lost sales and backorders is not simple but exhibits desirable monotonicity properties. Furthermore, we propose a simple threshold heuristic policy that performs well in our experiments.
Original language | English |
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Pages (from-to) | 386-398 |
Number of pages | 13 |
Journal | Journal of Revenue and Pricing Management |
Volume | 9 |
Issue number | 5 |
Early online date | 17 Sept 2010 |
DOIs | |
Publication status | Published - 1 Nov 2010 |
Externally published | Yes |
Event | 9th Annual INFORMS Revenue Management and Pricing Section Conference at the Kellogg School of Management - Kellogg School of Management, Northwestern University, Evanston, United States Duration: 22 Jun 2009 → 23 Jun 2009 |
Keywords
- backorders
- dynamic programming
- hospital resource allocation
- lost sales