When should service firms provide free experience service?
Wenhui Zhou1; Zhaotong Lian2; Jinbiao Wu2,3
2014-05-01
Source PublicationEuropean Journal of Operational Research
ABS Journal Level4
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
DOIhttps://doi.org/10.1016/j.ejor.2013.10.036
URLView the original
Indexed BySCIE ; SSCI ; SSCI
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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Citation statistics
Cited Times [WOS]:4   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionDEPARTMENT OF ACCOUNTING AND INFORMATION MANAGEMENT
Corresponding AuthorZhaotong Lian
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
Wenhui Zhou,Zhaotong Lian,Jinbiao Wu. When should service firms provide free experience service?[J]. European Journal of Operational Research,2014,234(3):830-838.
APA Wenhui Zhou,Zhaotong Lian,&Jinbiao Wu.(2014).When should service firms provide free experience service?.European Journal of Operational Research,234(3),830-838.
MLA Wenhui Zhou,et al."When should service firms provide free experience service?".European Journal of Operational Research 234.3(2014):830-838.
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