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Optimizing contracted resource capacity with two advance cancelation modes

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  • Geng, Na
  • Xie, Xiaolan

Abstract

Critical resources are often shared among different classes of customers. Capacity reservation allows each class of customers to better manage priorities of its customers but might lead to unused capacity. Unused capacity can be avoided or reduced by advance cancelation. This paper addresses the service capacity reservation for a given class of customers. The reservation process is characterized by: contracted time slots (CTS) reserved for the class of customers, requests for lengthy regular time slots (RTS) and two advance cancelation modes to cancel CTS one-period or two-period before. The optimal control under a given contract is formulated as an average cost Markov Decision Process (MDP) in order to minimize customer waiting times, unused CTS and CTS cancelation. Structural properties of optimal control policies are established via the corresponding discounted cost MDP problem. Numerical results show that two-period advance CTS cancelation can significantly improve the contract-based solution.

Suggested Citation

  • Geng, Na & Xie, Xiaolan, 2012. "Optimizing contracted resource capacity with two advance cancelation modes," European Journal of Operational Research, Elsevier, vol. 221(3), pages 501-512.
    • Handle: RePEc:eee:ejores:v:221:y:2012:i:3:p:501-512
    DOI: 10.1016/j.ejor.2012.04.017
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    Cited by:

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    3. Gang Du & Xinyue Li & Hui Hu & Xiaoling Ouyang, 2018. "Optimizing Daily Service Scheduling for Medical Diagnostic Equipment Considering Patient Satisfaction and Hospital Revenue," Sustainability, MDPI, vol. 10(9), pages 1-23, September.
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    5. Ahmadi-Javid, Amir & Jalali, Zahra & Klassen, Kenneth J, 2017. "Outpatient appointment systems in healthcare: A review of optimization studies," European Journal of Operational Research, Elsevier, vol. 258(1), pages 3-34.
    6. Yang, Xiaopeng & Zheng, Danheng & Sieminowski, Tammy & Paradi, Joseph C., 2015. "A dynamic benchmarking system for assessing the recovery of inpatients: Evidence from the neurorehabilitation process," European Journal of Operational Research, Elsevier, vol. 240(2), pages 582-591.
    7. Geng, Na & Xie, Xiaolan & Jiang, Zhibin, 2013. "Implementation strategies of a contract-based MRI examination reservation process for stroke patients," European Journal of Operational Research, Elsevier, vol. 231(2), pages 371-380.

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