Besbes, Omar; Maglaras, Costis Revenue optimization for a make-to-order queue in an uncertain market environment. (English) Zbl 1233.90111 Oper. Res. 57, No. 6, 1438-1450 (2009). Summary: We consider a revenue-maximizing make-to-order manufacturer that serves a market of price- and delay-sensitive customers and operates in an environment in which the market size varies stochastically over time. A key feature of our analysis is that no model is assumed for the evolution of the market size. We analyze two main settings: (i) the size of the market is observable at any point in time; and (ii) the size of the market is not observable and hence cannot be used for decision making. We focus on high-volume systems that are characterized by large processing capacities and market sizes, and where the latter fluctuate on a slower timescale than that of the underlying production system dynamics. We develop an approach to tackle such problems that is based on an asymptotic analysis and that yields near-optimal policy recommendations for the original system via the solution of a stochastic fluid model. Cited in 13 Documents MSC: 90B22 Queues and service in operations research 91B70 Stochastic models in economics Keywords:revenue management; dynamic pricing; market uncertainty; queueing; state-dependent queues; asymptotic analysis PDF BibTeX XML Cite \textit{O. Besbes} and \textit{C. Maglaras}, Oper. Res. 57, No. 6, 1438--1450 (2009; Zbl 1233.90111) Full Text: DOI Link OpenURL