Cancellation Fee Research Articles

Cost Optimization in Cloud Computing: Capacity Reservation for Intermittent Random Demand Surges

The adoption of cloud computing has been accelerating over the last decade, while enterprise cloud users (“firms”) are struggling to manage their growing cloud expenditures in the face of intermittent digital demand surges caused by planned or random events. To deal with such challenges, a firm can employ reserved instances with the standard contract length (e.g., one year) to meet the stationary base demand, which we refer to as the base contracts, complemented by additional reserved instances with either standard or shorter contract lengths, which we refer to as the supplementary contracts, to cope with the demand surges. We first analyze a model whereby the surge and inter-surge durations are deterministic, demand magnitude is random, and cancellation of the reservations is allowed. We develop a capacity management plan for the firm including not only the optimal capacity levels, which follow a newsvendor-type solution, but also the optimal policy for managing the purchase, renewal, cancellation, or expiration of the supplementary contracts, which can be characterized as a two-threshold policy. Due to the complexity of the structure of the optimal policy, we also construct an effective heuristic policy by excluding the renewal option from the action space, which can be applied to a more general setting where the surge and inter-surge durations are random. We examine two model extensions: (1) when trades of reserved instances are allowed in a secondary marketplace; (2) when the firm does not have exact information about the distributions of the surge magnitude and duration while it can adjust the capacity levels as data unveils. Our analysis shows that the optimal policy for managing the supplementary contracts depends on the relative magnitude of the surge and inter-surge durations in relationship to the cancellation fee. Moreover, our numerical results show that cloud platforms that offer a secondary marketplace are more attractive to firms from a cost standpoint than those that allow cancellation only. The latter, without the secondary marketplace, however, can achieve parity with the former by offering a deeper discount rate for the reserved instances, thereby bypassing the cost of administering the secondary marketplace.

Pricing in Service Systems with Rational Balking and Abandonment of Time‐Sensitive Customers

The current literature on pricing in service systems with time‐sensitive customers predominately ignores the rational abandonment of customers with mixed‐risk attitude. The goal of this study is to address this gap. We consider an unobservable queueing system with a nonlinear waiting cost function, which is concave up to a certain point and then becomes convex, capturing the mixed‐risk attitude of customers observed in empirical studies. We assume that customers are sensitive with respect to waiting time (delay) and strategic regarding their balking and abandonment decisions. We characterize the optimal pricing policy that maximizes the service provider's revenue. We show that the pricing policies studied in the literature, including the joint service and cancellation (entrance) fee policy, are suboptimal and cannot induce the socially optimal behavior. We demonstrate that while the cancellation fee can regulate a customer's balking strategy, the service fee cannot effectively control a customer's abandonment decision. We then provide conditions under which the joint service and cancellation fee policy is optimal. We finally prove that the service provider should compensate customers for their waiting in order to efficiently control the abandonment of customers. We propose a pricing policy, which includes entrance, service, and wait time (delay) fees, that maximizes the provider's revenue. We derive the optimal fees and show that, under the proposed optimal pricing policy, customers pay service and cancellation fees while they are partially compensated for the time spent waiting for service.

관광소비자의 불공정거래 경험에 대한 현상학적 연구 : OTA를 대상으로

The purpose of this study is to analyze the unfair trade experience of tourism consumers using OTA by applying the phenomenological research method, and to discover the individual characteristics, essential structure, and general structural description of the experience. The data collection for the analysis was collected through in-depth one-on-one interviews with 8 tourism consumers who had experience in unfair trade in the process of tourism products. As an analysis method, Colaizzi(1978)'s phenomenological research technique was applied. Colaizzi's phenomenological research technique is characterized by focusing on the common attributes of the research participants' statements. As a result of the analysis, 3 essential structures, 8 theme clusters, and 27 themes were derived. The derived essential structure was matched with the research problem of the 'content-cause-evaluation' structure. First, in terms of content, 'difficulty of canceling the contract' was derived as the essence, and 'excessive cancellation fee', 'avoidance of refund responsibility' were derived for the theme cluster. Second, in terms of the cause of the transaction, 'irrationality of the transaction conditions' was derived as the essence, and 'abuse of business status', 'infringement of property rights and choice of tourism consumers', 'unfair business conditions', 'vulnerable tourism consumer status' were derived for the theme cluster. Third, in terms of evaluation, 'distrust of OTA' was derived as the essence, and 'OTA's lack of service mind', 'OTA's indifference to tourism consumer protection' were derived from the theme cluster. In conclusion, this study confirmed the practical problems that occur in OTA by presenting the essential structure through the experience of unfair trade of tourism consumers.

Capacity Reservation and Leasing Plans for Periodic Random Demand Surges

Over the last decade, adoption of cloud computing has been accelerating, while firms are struggling to manage their growing cloud spending in the face of demand surges caused by planned or random events including marketing campaigns, new-product introduction, and natural disasters. In general, a firm can purchase capacity through a standard reservation contract from the cloud providers, supplemented by on-demand capacity as well as capacity purchased through reservation contracts from the reserved-instance marketplace (like the one administered by Amazon Web Services) to deal with the demand surges. We first analyze a model where the firm knows the distributions of the surge magnitude and duration. We characterize the firm’s optimal decision on when to sell excess capacity in the marketplace, show that the optimal capacity levels are dependent on the pricing of the reserved instances and the cancellation fee, and devise a heuristic for determining the length of the supplementary contract. Furthermore, we examine a model extension with the Bayesian updating paradigm, whereby the firm has a prior estimate about the surge-demand distribution, and we propose a pragmatic policy that leverages the firm’s trade options to adjust the desired capacity levels as data unveils and the estimate is updated. Through a comprehensive numerical study with simulation, we find that, to deal with the demand surges, the firm should purchase more capacity through a supplementary contract with a longer duration, if the unit discount rate increases, the cancellation fee decreases, or the average surge and inter-surge durations increase. In such cases, the firm also benefits more from the flexibility of trade in the marketplace, and the benefits achieve the maximum if demand stays at the base and surge levels for almost equal durations. Therefore, our study provides both efficient optimization algorithms and valuable insights into the firm’s cloud capacity management practices.

Partial refunds as a strategic price commitment device in advance selling in a service industry

Over the past decade, consumers’ strategic waiting behavior in anticipation of a price markdown has become increasingly common when advance selling is used. Recently, studies in the durable goods industry show that a partial refund strategy can activate the price-commitment mechanism to counter consumers’ strategic waiting, which is primarily driven by both consumers’ and retailers’ behaviors that discount the future. In this research, we investigate the possibility of using this partial refund strategy in a service industry context in which demand uncertainty and consumption state uncertainty act as major influential factors.We study analytical models that consider the demand uncertainty of later arrivals and the consumption state uncertainty of early arrivals over two selling periods (advance and spot selling). Our results show a consistent pattern reflecting that a partial refund strategy in which the cancellation fee acts as a price-commitment mechanism is capable of emerging as the optimal strategy. Other than the strategic commitment mechanism, the cancellation fee paid by the advance buyers who choose to cancel their advance purchase also plays a profit-enhancer role. Combining these two mechanisms, a partial refund strategy dominates both a price-matching strategy and a dynamic pricing strategy, and they are only special cases of that type of strategy. Finally, comparative statistical analyses are conducted and reveal the impacts of demand-related parameters on the optimality of the partial refund strategy. These results provide instructive guidance for sellers when utilizing the partial refund strategy in their marketing practices.

Analysis: Accommodation Establishments and the Cancellation of Advance Bookings: The Challenge of Determining a Reasonable Cancellation Fee

Analysis: Accommodation Establishments and the Cancellation of Advance Bookings: The Challenge of Determining a Reasonable Cancellation Fee

Optimal inventory decisions for a risk-averse retailer when offering layaway

Layaway allows economically disadvantaged budget-constrained consumers to purchase expensive items through amortized payments and nominal program fees, as opposed to using high-interest financing options such as credit cards and payday loans. We consider a risk-averse retailer’s ordering decisions when offering a layaway program. We use the net loss and total loss functions, found in the literature, to determine a risk-averse retailer’s optimal order quantity under conditional value-at-risk (CVaR). We next analyze the effects of the model parameters, retailer’s risk aversion, the market default rate, enrollment fee, cancellation fee and so on, on the optimal order quantity decisions. We show that the optimal order quantity depends on different loss functions and different demand distribution functions. Further, we show that as market default rate increases or the retailer becomes more risk averse, then a rational retailer will not offer a layaway program.

Pricing in Service Systems with Rational Balking and Abandonment of Time-Sensitive Customers

The current literature on pricing in service systems with time-sensitive customers predominately ignores the rational abandonment of customers with mixed-risk attitude. The goal of this paper is to address this gap. We consider an unobservable queueing system with a nonlinear waiting cost function, which is concave up to a certain point and then becomes convex, capturing the mixed-risk attitude of customers observed in empirical studies. We assume that customers are sensitive with respect to waiting time (delay) and strategic regarding their balking and abandonment decisions. We first analyze the equilibrium customers' behavior and determine the optimal social behavior. We then characterize the optimal pricing policy that maximizes the service provider's revenue. We show that the pricing policies studied in the literature, including the joint service and cancellation (entrance) fee policy, are suboptimal and cannot induce the socially optimal behavior. We demonstrate that while the cancellation fee can regulate a customer's balking strategy, the service fee cannot effectively control a customer's abandonment decision. We then provide conditions under which the joint service and cancellation fee policy is optimal. We finally prove that the service provider should compensate customers for their waiting in order to efficiently control the abandonment of customers. We propose a pricing policy, which includes entrance, service, and wait time (delay) fees, that maximizes the provider's revenue. We derive the optimal fees and show that, under the proposed optimal pricing policy, customers pay service and cancellation fees while they are partially compensated for the time spent waiting for service.

553 Exploring Methods to Reduce Colonoscopy Cancellations

INTRODUCTION: Colonoscopy cancellation negatively impacts endoscopy center efficiency and physician productivity. According to previous studies, the rates of colonoscopy cancellations within 24 hours were reported to be 2-4% (1,2). Using an automated call system to make reminder calls and informing patients of a cancellation fee, may be methods to reduce cancellations. Our aim is to evaluate the effectiveness of these methods in reducing late cancellations. METHODS: A prospective and retrospective study done at Sierra Nevada Gastroenterology Medical Associates and Sierra Endoscopy Center in Grass Valley, CA from Nov 2, 2018 to May 2, 2019. All enrolled patients had colonoscopy issues addressed by a physician at an office visit prior to scheduling. A reminder phone call was made by an automated calling system 48 hours prior to the colonoscopy. Results were compared to previous studies where a nurse gave the reminder call. Another group of patients were informed of a policy that a cancellation fee may be charged for late cancellation. Data was compared from this current study group to similar groups in 2009-11 and 2016-17 (1,2) to see if there were any significant factors that influenced colonoscopy cancellation rates. RESULTS: 138 from a total of 2310 pts (6%) cancelled their colonoscopy within 24 hours of their scheduled procedure time when receiving the automated reminder phone call. 2-4% of pts cancelled their colonoscopy when receiving a personal reminder call from a nurse (1,2).Knowledge of a cancellation fee did not reduce the amount of cancellations. CONCLUSION: Using an automated phone call system to make reminder phone calls led to a higher cancellation rate (6%) when compared to a personal reminder phone call from a nurse (2-4%). Potential reasons are that the patient may not pick up the phone thinking it was a robocall, wrong phone numbers, deleted messages, and difficulty understanding automated messages. Even though no late fees were actually charged, just the knowledge of a potential cancellation fee was not a deterrent for cancellation. Type of insurance was the most significant factor influencing colonoscopy cancellation, as the rate of cancellation was directly related to the increase in Medicaid insured patients and inversely related to the number of privately insured patients. Personal issues were the most frequent cause for last minute cancellations. Anticipating and addressing these issues at the time of scheduling may be the most effective way of reducing cancellation rates.

Order Cancellations, Fees, and Execution Quality in U.S. Equity Options

Abstract We examine the effects of an order cancellation fee on limit order flow and execution quality in the PHLX options market. The cancellation fee on professional order flow effectively reduces the rate at which limit orders are canceled. Whereas the cancellation fee discourages the submission of nonmarketable orders, it encourages the submission of marketable orders. Consequently, nonmarketable order fill rates increase; marketable order fill speeds decrease; and bid-ask spreads widen. We also find slight increases in both dollar volume and market share. (JEL G11, G14, G18) Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Order Cancellations, Fees, and Execution Quality in U.S. Equity Options

We examine the effects of an order cancellation fee on limit order flow and execution quality in the PHLX options market. The cancellation fee on professional order flow is effective in reducing the rate at which limit orders are canceled. While the cancellation fee discourages the submission of non-marketable orders, it encourages the submission of marketable orders. Consequently, non-marketable order fill rates increase, marketable order fill speeds decrease, and bid-ask spreads widen. We also find slight increases in both dollar volume and market share. We explore whether a change in pick-off risk is a potential explanation for these new findings and policy implications.

Bread and Roses, and Quality Too? A New Faculty Majority Negotiating the New Academy

ABSTRACTThis study of 252 collective bargaining agreements examined language negotiated in “class cancellation fee” provisions addressing “just-in-time” employment of adjunct faculty. The analysis focused on the balance between managerial discretion and professional rights and on whether and how contract language addresses remuneration (bread) and respect (roses) as well as quality, which are at the heart of the contingent faculty labor movement’s mantra about faculty’s working conditions being students’ learning conditions. Comparing the language in 64 bargaining units that cover only adjunct faculty to language in 188 units that combine part- and full-time faculty, and considering the language negotiated in Service Employees International Union “metro campaign” contracts, I found that provisions are both markers of precarious employment and of adjunct faculty’s agency to countermobilize and improve the quality of their working conditions, particularly in part-time-only units and in the new metro campaigns, though not in terms of language explicitly invoking quality concerns.

Restaurant revenue management: apply reservation management?

Restaurateurs obviously want to turn their tables as empty seats equates to zero revenue, so to achieve the best revenue per available seat hour (RevPASH) they can work hard by scrambling at the door trying to orchestrate people into chairs or should they work smart and let the technology sort out the crowds…or a combination. The latest fad in trendy restaurants is to not take reservations. Many restaurant operators are confident and feel that their product is so good that customer’s will walk-in and wait for a table. The wait may be at the bar, in the lobby, on the sidewalk or even at another restaurant or bar across the street, but they will wait for a table in “the place to dine”. It seems that some restaurateurs of these trendy places cannot be bothered with the services of mobile apps like Open Table who take all the work away from restaurants by allowing customers to “book a table” in three clicks. The issue with these reservation apps is the cost to the restaurateur which is around $1.25 CDN per guest plus a one-time start-up cost for hardware and access. Every reservation system relies on staff to answer telephones and emails and/or manage software to then coordinate the process to ‘reserve’ the actual physical space. Reservation systems can work effectively if the reservation staff work error-free and the customers honor the booking by showing up at the time they requested (or booked), but in reality this is never the case. Restaurant staffs make errors and customers don’t show up. Major complaints from customers arise from errors in booking (phone/email) where the table isn’t available at the time (or even booked) and restaurant management complain (lost revenue)when guests are ‘no-shows’. To curtail the ‘no-shows’, some restaurant’s demand a credit card number with a booking and threaten a cancellation fee charge to those who don’t cancel in time. With this being said a restaurant can get a bad review by customers from the way a reservation is handled before they even taste the food. So the question this research paper attempts to answer is simple; in fine dining (trendy) environments, do customers who have pre-booked reservations spend more than the customers who “walk-in”? Data was collected by observing the ‘average guest check’ spending on revenue statistics on tables of two, three and four at five fine dining restaurants over the course of a 3 week period. The findings show that the mean guest check for guests with reservations was overall higher in all five restaurants with three of the five statistically significant using an independent t test as verification. This finding perhaps demonstrates that restaurant customers who make reservations are more valuable and restaurants that don’t take reservations may need to re-think their policy as this may affect revenue. More research is needed in other major centers to verify this trend in restaurant spending along with a study of the restaurants that do not take reservations. The findings of this research will enable restaurateurs to develop a reservation system that takes advantage of their seating plan to maximize the revenue per chair based on whichever reservation policy they feel comfortable with.

Bread and roses, and quality too: A new faculty majority negotiating the new academy

ABSTRACTThis study of 252 collective bargaining agreements examined language negotiated in “class cancellation fee” provisions addressing “just-in-time” employment of adjunct faculty. The analysis focused on the balance between managerial discretion and professional rights and on whether and how contract language addresses remuneration (bread) and respect (roses) as well as quality, which are at the heart of the contingent faculty labor movement’s mantra about faculty’s working conditions being students’ learning conditions. Comparing the language in 64 bargaining units that cover only adjunct faculty to language in 188 units that combine part- and full-time faculty, and considering the language negotiated in Service Employees International Union “metro campaign” contracts, I found that provisions are both markers of precarious employment and of adjunct faculty’s agency to countermobilize and improve the quality of their working conditions, particularly in part-time-only units and in the new metro campaig...

Auctions in the post-change-order period

A change order is frequently initiated by either the supplier or the buyer, especially when the contract is long-term or when the contractual design is complex. In response to a change order, the buyer can enter a bargaining process to negotiate a new price. If the bargaining fails, she pays a cancellation fee (or penalty) and opens an auction. We call this process the sequential bargaining-auction (BA). At the time of bargaining, the buyer is uncertain as to whether the bargained price is set to her advantage; indeed, she might, or might not, obtain a better price in the new auction. To overcome these difficulties, we propose a new change-order-handling mechanism by which the buyer has an option to change the contractual supplier after bargaining ends with a bargained price. We call this the option mechanism. By this mechanism, the privilege of selling products or services is transferred to a new supplier if the buyer exercises the option. To exercise the option, the buyer pays a prespecified cash payment, which we call the switch price, to the original supplier. If the option is not exercised, the bargained price remains in effect. When a switch price is proposed by the buyer, the supplier decides whether or not to accept it. If the supplier accepts it, the buyer opens an auction. The option is exercised when there is a winner in the auction. This article shows how, under the option mechanism, the optimal switch price and the optimal reserve price are determined. Compared to the sequential BA, both the buyer and the supplier benefit. Additionally, the option mechanism coordinates the supply chain consisting of the two parties. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 248–265, 2015

Dynamic pricing for subscription services

This paper investigates the use of pricing schemes in subscription services that consist of various combinations of activation, subscription, and cancellation fees. When customers exclusively consider what is directly perceivable, the activation fee starts low and increases as the network grows (penetration strategy), whereas the cancellation fee starts high and decreases as the network grows (skimming strategy). The activation and cancellation fees take various other forms otherwise. The subscription fee remains low at the early stages and increases only when a reasonable number of subscribers is secured. Finally, the authors discuss the theoretical and managerial implications of their findings.

LETTER TO THE EDITOR BY MEGAN HALL

Sir, We read with interest the recent review by Santiago Munne entitled, “Preimplantation Genetic Diagnosis for Aneuploidy and Translocations Using Array Comparative Genomic Hybridization” (1). As part of the review of array comparative genome hybridization (aCGH), the author provides additional information on other 24-chromosome preimplantation genetic diagnosis/screening (PGD/PGS) techniques. As a commercial lab that offers single nucleotide polymorphism (SNP) microarray analysis for PGD/PGS, we would like to comment on a few claims that were made within this article regarding SNP microarrays. (Table 1) in the article summarizes the differences between 24-chromosome PGD/PGS techniques. This table contains a number of errors regarding SNP microarray detection capabilities as it groups the different approaches of SNP microarray analysis under a single heading of “SNPs”. SNP technologies that employ a combination of qualitative and quantitative data analysis detect far more abnormalities than those that use just one type of analysis. First, it is not accurate to say that “SNPs” cannot detect tetraploidy. SNP microarrays using qualitative/quantitative analysis can detect some forms of tetraploidy; this method will not detect 2:2 tetraploidy, though is indeed capable of detecting 3:1 tetraploidy. Second, SNP microarray technologies that use a qualitative/quantitative approach can detect meiotic and mitotic duplications without recombination (3); the table incorrectly states that SNP microarray approaches cannot detect these abnormalities. Lastly, it is an exaggeration to state that aCGH approaches are able to detect all unbalanced translocations and SNP microarray approaches can only detect some; both approaches are equally limited in their inability to detect very small deletions and duplications (both have a similar threshold in that they typically detect DNA segments greater than 6Mb). We also question a number of statements the author makes about aCGH and SNP microarray within the body of the paper. The author acknowledges that aCGH cannot detect haploidy or polyploidy but claims that this is a small limitation, as the majority of the haploid or polyploid embryos tested (7.7%) had additional detectable abnormalities; however, these additional abnormalities are not named. It is our experience that other abnormalities are not typically found with 69,XXX. Next, the author credits SNP microarray with the ability to detect uniparental disomy (UPD) but then goes on to use the incidence of UPD of chromosome 15 (UPD-15) to say that UPD in general is a very rare event. Chromosome15 is only one of six imprinted chromosomes (6, 7, 11, 14, 15, and 16), which if UPD is present, could lead to the birth of a baby with a severe genetic syndrome (4). We feel that detection of UPD prior to embryo transfer decisions is highly beneficial to, and desired by, couples undergoing IVF with PGD/PGS. Furthermore, in regards to PGD/PGS for reciprocal and Robertsonian translocations, we would like to clarify that not all SNP microarray approaches can differentiate between normal and balanced (carrier) embryos. Last, the author correctly points out that SNP microarray approaches require parental DNA analysis prior to the embryo sample analysis. However, our lab does not charge a cancellation fee for this parental analysis when IVF cycles are cancelled, thus patients do not pay for unnecessary parental testing. We appreciate that the author mentions SNP microarray analysis that employs a qualitative/quantitative approach will avoid many of the limitations inherent to the purely qualitative or quantitative approaches. However, the review references our article (Johnson DS et al. [2], reference 77 in the original paper) as an aCGH technology, when in fact we utilize a SNP-based approach with bioinformatics analysis. Natera’s PGD/PGS Parental SupportTM method utilizes SNP measurements of parental and embryonic samples, giving us the ability to analyze both qualitative and quantitative data from each chromosome to determine the embryonic chromosomal copy number. In addition, the Parental SupportTM method utilizes a much more sophisticated bioinformatics-based analysis (2) than the combined approach described in the article. New methods should always be validated against more established ones, but given the errors rates reported with FISH PGD/PGS (as stated by the author at the beginning of the paper), we strongly disagree that validation studies using FISH for reanalysis should be considered the gold standard (2, 5). Natera thus supports the creation of an oversight body to administer proficiency testing for laboratories offering 24-chromosome PGD/PGS. Sincerely,

Effect of a No-Show/Short-Term Cancellation Fee Policy in Deterring NonCompliance with Attendance at Scheduled Appointments

Effect of a No-Show/Short-Term Cancellation Fee Policy in Deterring NonCompliance with Attendance at Scheduled Appointments

A fuzzy multi-objective model for capacity allocation and pricing policy of provider in data communication service with different QoS levels

Data communication service has an important influence on e-commerce. The key challenge for the users is, ultimately, to select a suitable provider. However, in this article, we do not focus on this aspect but the viewpoint and decision-making of providers for order allocation and pricing policy when orders exceed service capacity. It is a multiple criteria decision-making problem such as profit and cancellation ratio. Meanwhile, we know realistic situations in which much of the input information is uncertain. Thus, it becomes very complex in a real-life environment. In this situation, fuzzy sets theory is the best tool for solving this problem. Our fuzzy model is formulated in such a way as to simultaneously consider the imprecision of information, price sensitive demand, stochastic variables, cancellation fee and the general membership function. For solving the problem, a new fuzzy programming is developed. Finally, a numerical example is presented to illustrate the proposed method. The results show that it is effective for determining the suitable order set and pricing policy of provider in data communication service with different quality of service (QoS) levels.

The search for the best deal: How hotel cancellation policies affect the search and booking decisions of deal-seeking customers

This study examined cancellation policies and their role in shaping travelers’ deal-seeking behavior, exploring the impact of cancellation fees and deadlines on three, mutually exclusive, customers’ hotel booking behavior categories: “Book”, “Book and Search”, and “Search”. 291 subjects, who participated in a week long online “booking game”, attempted to book a room in a virtual hotel and get the best deal. The results were tested using small sample t-test for comparing proportions between two independent populations, non-parametric multiple pairwise comparisons, and multinomial logit regression models. The findings indicate that the cancellation deadline affected participants’ behavior while the size of the cancellation fee had no statistically significant impact. In addition, there was no significant difference between lenient cancellation deadline and no cancellation policy.