RELIABILITY-CONSTRAINED PRICING, CAPACITY, AND QUALITY: AN ILLUSTRATION OF ECONOMIC CONCEPTS TO POSTAL SERVICES
| Autor: | Jess S. Boronico |
|---|---|
| Rok vydání: | 2009 |
| Předmět: |
Marginal cost
Service quality Operations research Computer science Quality of service media_common.quotation_subject Management Science and Operations Research Service provider Industrial and Manufacturing Engineering Microeconomics Competition (economics) Management of Technology and Innovation Quality (business) Constraint (mathematics) Reliability (statistics) media_common |
| Zdroj: | Production and Operations Management. 8:92-107 |
| ISSN: | 1059-1478 |
| DOI: | 10.1111/j.1937-5956.1999.tb00063.x |
| Popis: | A model is developed from which welfare-optimal prices, capacities, and reliabilities for a service provider are simultaneously determined. Solutions are determined under conditions of stochastic demand subject to a reliability constraint on service quality. Both quality of service provided, as well as price, impact on demand for services rendered. Results indicate that (i) optimal prices are equated to the reliability-constrained marginal costs, (ii) optimal reliabilities require that the marginal benefits of increasing reliability are equated to the marginal costs of doing so, and (iii) optimal capacity allocation involves minimizing the system's expected costs subject to meeting the prespecified reliability constraint for service quality. The model is applied to postal delivery services in light of the growing competition that has emerged in this industry. |
| Databáze: | OpenAIRE |
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