Online Assignment of Flexible Resources in Professional Service Firms


by


Yalcin Akcay
Koc University
College of Administrative Sciences and Economics


(joint work with Anant Balakrishnan and Susan H. Xu)
Revenue management is a well-know business practice for optimizing revenues from the sale of a product, and is embraced in many service industries, especially in airlines. Our paper addresses a revenue management problem in a new application area: the workplace learning industry. This industry has been growing rapidly in recent years, and the potential of revenue management is encouraging. We focus on the acceptance decisions of the incoming client requests for training programs, and the assignment decisions of instructors to the accepted requests. We model the revenue maximization problem as a stochastic dynamic program, which is computationally challenging to solve. Based on our insights gained from the analysis of special cases of the problem, we propose several  approximate solutions; rollout, threshold, newsboy and dynamic randomization heuristics. Through an extensive simulation study, we verify that these heuristics are indeed effective in solving the problem, and are near-optimal for many problem instances.