Revenue-maximizing pricing and scheduling strategies in service systems with flexible customers

We propose a model of service operations systems in which customers are heterogeneous both in terms of their private delay sensitivity and flexibility. A service provider maximizes revenue through jointly optimal pricing and steady-state scheduling strategies. We provide a complete analysis for this generally intractable problem. Interestingly, when one queue accommodates a large population of impatient customers, it may be desirable to strategically idle the server in the other queue, which is a phenomenon new to the literature. Published by Elsevier B.V.