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.