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When should service firms provide free experience service?
Zhou,Wenhui1; Lian,Zhaotong2; Wu,Jinbiao2,3
2014-05-01
Source PublicationEuropean Journal of Operational Research
ISSN0377-2217
Volume234Issue:3Pages:830-838
Abstract

By providing a free experience service, a service firm can attract more uninformed customers. However, it could reversely effect the delay-sensitive, informed customers' decision. In this paper, we study a priority queueing system with free experience services. We study the customer behavior in equilibrium after we derive the expected customer waiting time. We then construct the service firm's revenue function and obtain an optimal strategy for the service firm. Our results suggest that when the market size of informed customers is relatively small, the firm should consider providing free experience services for uninformed customers. Conversely, if the demand rate of potential informed customers is quite high, the firm should ignore uninformed customers. © 2013 Elsevier B.V. All rights reserved.

KeywordDelay-sensitive Experience Service Or In Service Industries Queueing Revenue Management
DOI10.1016/j.ejor.2013.10.036
URLView the original
Indexed BySCI ; SSCI
Language英语
WOS Research AreaBusiness & Economics ; Operations Research & Management Science
WOS SubjectManagement ; Operations Research & Management Science
WOS IDWOS:000331419800025
PublisherELSEVIER SCIENCE BV, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS
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Cited Times [WOS]:4   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF ACCOUNTING AND INFORMATION MANAGEMENT
Corresponding AuthorLian,Zhaotong
Affiliation1.School of Business Administration,South China University of Technology,,China
2.Faculty of Business Administration,University of Macau,,Macao
3.School of Mathematics and Statistics,Central South University,,China
Corresponding Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Zhou,Wenhui,Lian,Zhaotong,Wu,Jinbiao. When should service firms provide free experience service?[J]. European Journal of Operational Research,2014,234(3):830-838.
APA Zhou,Wenhui,Lian,Zhaotong,&Wu,Jinbiao.(2014).When should service firms provide free experience service?.European Journal of Operational Research,234(3),830-838.
MLA Zhou,Wenhui,et al."When should service firms provide free experience service?".European Journal of Operational Research 234.3(2014):830-838.
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