Integrated segmentation of supply and demand with service differentiation (Extended abstract)

Zusammenfassung

The presented research studies the integrated segmentation of supply and demand with service differentiation by means of service-level menus. A service-level menu is a self-selection mechanism that allows customers to choose among several offerings, each with its own cost and guaranteed level of service. The provision of different levels of service can be achieved by use of inventory rationing, in particular, by use of critical-level policies. The presented research takes an integrated perspective on the inventory management policy on one hand and the joint setting of prices and service levels on the other hand. This integrated perspective comprises an answer to the question when the introduction of a service-level menu is likely to significantly increase profits.