Abstract
Purpose This paper studies the revenue management problem for reusable products. A firm rents out products to customers, and the products are returned after a random duration of time. The returned products are used by other customers. Unlike the previous papers studying reusable products, this paper considers the possibility that the products are returned with breakdowns. This implies that some returned products are not used by other customers. Methods A dynamic programming is formulated for the optimal admission control. To deal with the computational complexity of the dynamic programming, the paper develops a heuristic based on the linear programming. Results The numerical study shows that the computational time of the dynamic programming increases significantly as the initial capacity increases. For a large initial capacity, the heuristic produces a near-optimal solution. Conclusion Therefore, a firm with a large initial capacity is recommended to use the proposed heuristic.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
