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1709. Quality-Speed Trade-Offs in Dynamic Service Systems: How to Anticipate Future Demand Changes

Invited abstract in session TA-39: Stochastic Models in Service Operations I, stream Stochastic Modelling.

Tuesday, 8:30-10:00
Room: 35 (building: 306)

Authors (first author is the speaker)

1. Raik Stolletz
Chair of Production Management, University of Mannheim
2. Jannik Vogel
SDB Science-driven Business Ltd
3. Tim Weber
Business Administration, University of Mannheim

Abstract

Quality-speed trade-offs occur in many service systems in which employees have discretion over their service times. An increase in service time often results in an increase in the quality of a service but also increases congestion. We investigate this trade-off in a dynamic setting with time-dependent and stochastic demand. To the best of our knowledge, this work is the first analysis of the quality-speed trade-off with exogenous changes in the demand. It shows how service providers can anticipate future expected demand changes with optimized service rates.

We investigate a piecewise-stationary approach whereby periods are not interrelated. Based in this, a closed-form stationary smoothing heuristic accounts for future demand changes. A performance evaluation based on a stationary backlog-carryover (SBC) approach considers the interrelations of performance measures between periods directly, and hence, allows to determine service rates simultaneously over all periods of the planning horizon.

We show that forecasted demand changes are anticipated by service rates several periods in advance. Substantial benefits are achieved by incorporating forecasted demand changes in the decision making of time-dependent service systems affected by the quality-speed trade-off.

Keywords

Status: accepted

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