Article ID Journal Published Year Pages File Type
10498145 Omega 2012 10 Pages PDF
Abstract
► We study capacity investment and operational strategies of a firm providing two-class services. ► We formulate the problem as a one-period, two-stage stochastic problem. ► We introduce an operational strategy called degrade-at-a-discount. ► We analyze how to set up the optimal capacity and the optimal discount. ► We show the benefits of the degrade-at-a-discount strategy.
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Related Topics
Social Sciences and Humanities Business, Management and Accounting Strategy and Management
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On service degrade at a discount: Capacity, demand pooling, and optimal discounting
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