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Customer Selection Problem With Search Cost, Due Date, Sideline Profit, And No Waiting Room

Author

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  • JAE-DONG SON

    (Department of Information Management Engineering, Korea University, 1-5ga, Anam-dong, Seongbuk-gu, 136-701, Korea)

  • SEIZO IKUTA

    (Department of Information Management Engineering, Korea University, 1-5ga, Anam-dong, Seongbuk-gu, 136-701, Korea)

Abstract

This paper deals with a problem of selecting profitable orders to accept out of sequentially arriving customers in a custom production company where only one customer is allowed to be held. It is assumed that a cost must be paid to search for orders, that a delay cost would be paid for every order not completed up to its due date, and that when there was no order in the system, the company could engage in sidelines yielding income. The purpose of this paper is twofold: One is to demonstrate that both admission control and pricing control problems for our customer selection problem can be analyzed within an identical framework and the other is to clarify the properties of the optimal decision rules for this particular problem.

Suggested Citation

  • Jae-Dong Son & Seizo Ikuta, 2007. "Customer Selection Problem With Search Cost, Due Date, Sideline Profit, And No Waiting Room," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 24(05), pages 647-666.
    • Handle: RePEc:wsi:apjorx:v:24:y:2007:i:05:n:s0217595907001437
    DOI: 10.1142/S0217595907001437
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    Cited by:

    1. Jae‐Dong Son & Yaghoub Khojasteh Ghamari, 2008. "Optimal admission and pricing control problems in service industries with multiple servers and sideline profit," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 24(4), pages 325-342, July.

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