Pricing and Capacity Rationing for Rentals with Uncertain Durations

We consider a rental firm with two types of customers. Contract customers pay fixed, prenegotiated rental fees and expect a high quality of service. Walk-in customers have no contractual relations with the firm and are “shopping for price.” Given multiple contract and walk-in classes, the rental firm has to decide when to offer service to contract customers and what fees to charge walk-in customers for service. We formulate this rental management problem as a problem in stochastic control and characterize optimal policies for managing contract and walk-in customers. We also consider static, myopic controls that are simpler to implement, and we analytically establish conditions under which these policies perform optimally. Complementary numerical tests provide a sense of the range of systems for which myopic policies are effective.

• 저널Management Science · 53(3) · 390–407
• 토픽Advanced Queuing Theory Analysis · Management Information Systems
• DOI10.1287/mnsc.1060.0651
• 저자Noah Gans, Sergei Savin