Abstract
This paper studies an online revenue management problem of accepting and assigning two classes of customers to two levels of resources with capacity constraints. A customer's request may be either accepted or rejected immediately upon its arrival without the information of further demand. One class of customers can be served either by a low-level resource at the resource's regular price, or by a high-level resource at the customer's reservation price. Another class of customers can be served by either level of resource at the regular price of the corresponding resource. Given the capacities of both levels of resources, the objective is to accept appropriate customers and assign them to appropriate resources so as to maximize the total revenue. From the perspective of competitive analysis, we derive an upper bound of competitive ratio for the problem and develop an optimal online strategy whose competitive ratio matches the upper bound.
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