Unsatisfied Customers Research Articles

Options and overbooking strategy in the management of wireless spectrum

Dynamic spectrum management makes it possible for the owner of usage rights on some frequency blocks to sublet each of them in real time and for a limited period of time. As a softer implementation with respect to the spot market a two stage assignment is here proposed through the use of options, which give buyers the right to purchase the usage right on a single block and for a timeslot. In the sale of options the primary owner may accomplish an overbooking strategy, which consists in selling more blocks than the available ones, and acts as a hedging tool against the risk of unsold blocks. A model for the overbooking strategy is described and evaluated, which takes into account both the value of the option, the correlated decisions taken by the prospective purchasers, and the penalty to be paid to the unsatisfied customers. The dependence of the economical convenience of the overbooking strategy on the relevant parameters (among which the penalty value and the overbooking ratio) is shown for a significant range of cases.

Transshipment between competing retailers

This paper is based on observations that competing retailers have the option of either agreeing in advance to transship excess inventory to each other or seeing unsatisfied customers switch to the competitor for a substitute. A transshipment game and a substitution game between competing retailers is studied. After establishing the existence and uniqueness of a pure-strategy Nash equilibrium in retail prices and safety stocks for each game, it is shown that transshipment never leads to a lower retail price and a higher safety stock, so transshipment never leads to a situation that definitely benefits consumers. It is also shown that when the transshipment price is low and competition strong (perhaps because of low retailer differentiation), retailers should prefer consumers substituting. However, when the transshipment price is high and competition weak (with high retailer differentiation), then transshipment benefits them. Transshipment becomes less attractive as competition increases or retailer differentiation decreases. Competitive retailers serving the same market need to be cautious in agreeing to transship because they face larger opportunity costs than retailers serving independent markets. The results provide guidance for management as well as for public policy regarding transshipment in a competitive market. [Supplementary materials are available for this article. Go to the publisher's online edition of IIE Transactions for the following free supplemental resource: Appendix with proofs of statements in Transshipment Between Competing Retailers]

Inventory Models for Substitutable Products: Optimal Policies and Heuristics

In this paper, we examine the nature of optimal inventory policies in a system where a retailer manages substitutable products. We first consider a system with two products 1 and 2 whose total demand is D and individual demands are negatively correlated. A fixed proportion of the unsatisfied customers for an item will purchase the other item, if it is available in inventory. For the single period case, we show that the optimal inventory levels of the two items can be computed easily and follow what we refer to as policies, i.e. base stock policies that are not state dependent, in certain critical regions of interest both when D is known and random. Furthermore, we show that such a partially decoupled base-stock policy is optimal even in a multi-period version of the problem for known D for a wide range of parameter values and in an N-product single-period model under some restrictive conditions. Using a numerical study, we show that heuristics based on the de-coupled inventory policy perform well in conditions more general than the ones assumed to obtain the analytical results. The analytical and numerical results suggest that the approach presented here is most valuable in retail settings for product categories where the level of substitution between items in a category is not high, demand variation at the aggregate level is not high and service levels or newsvendor ratios are high.

Newsvendors Under Simultaneous Price and Inventory Competition

This paper extends the theory of N competitive newsvendors to the case where competition occurs simultaneously in price and inventory. The basic research questions are whether the Nash equilibrium exists in this game, whether it is unique, and how the resulting inventories and prices are affected by competition. Using a novel method, we show the quasiconcavity of the competitive newsvendor's problem and establish the existence of the pure-strategy Nash equilibrium. Through a contraction mapping approach, we develop sufficient conditions for the Nash equilibrium to be unique. We then analyze the properties of the equilibrium and compare it with the optimal solution for the (noncompeting) price-sensitive newsvendor. We prove that at a symmetric equilibrium, retail prices and safety stocks strictly increase with the proportion of a newsvendor's unsatisfied customers that switch to a competitor, but strictly decrease with the intensity of price competition. Total inventories, on the other hand, increase with the intensity of price competition. Furthermore, the competitive equilibrium never has lower safety stocks and higher retail prices (a situation that definitely hurts the customers) than the solution for noncompetitive newsvendors.

Inventory Models for Substitutable Products: Optimal Policies and Heuristics

In this paper, we examine the nature of optimal inventory policies in a system where a retailer manages substitutable products. We first consider a system with two products 1 and 2 whose total demand is D and individual demands are negatively correlated. A fixed proportion of the unsatisfied customers for an item will purchase the other item if it is available in inventory. For the single-period case, we show that the optimal inventory levels of the two items can be computed easily and follow what we refer to as “partially decoupled” policies, i.e., base stock policies that are not state dependent, in certain critical regions of interest both when D is known and random. Furthermore, we show that such a partially decoupled base-stock policy is optimal even in a multiperiod version of the problem for known D for a wide range of parameter values and in an N-product single-period model under some restrictive conditions. Using a numerical study, we show that heuristics based on the decoupled inventory policy perform well in conditions more general than the ones assumed to obtain the analytical results. The analytical and numerical results suggest that the approach presented here is most valuable in retail settings for product categories where the level of substitution between items in a category is not high, demand variation at the aggregate level is not high, and service levels or newsvendor ratios are high.

A discrete-time retrial queue with multiplicative repeated attempts

The repeated attempts have been always made individually by each unsatisfied customer in discrete-time retrial queues. However, the time between two consecutive repeated requests can be independent of the number of customers applying for service. This paper considers a new retrial discipline, that we call multiplicative, which extends both types of repeated attempts.

Tempering universities' marketing rhetoric: a strategic protection against litigation or an admission of failure?

The changed dynamic between tertiary students and universities has resulted in much discussion about consumer rights and obligations. Whilst some consider the change from students to clients to be simply an accurate reflection of changing times, others believe the trend to be a covert blueprint for radical change imposed by forces external to the academy. In either case, the discussion is more concerned with rights, responsibilities and obligations rather than pedagogic issues. With the shift in focus comes the possibility of consumer‐based litigation based upon contractual obligations. To some extent, the success of such litigation will be based upon legalistic interpretations of the marketing rhetoric universities use to describe their product. As public statements, such rhetoric is part of the contract into which students enter with universities. This paper considers one of the ways in which universities have responded to the potential of being sued by unsatisfied customers: a tempering of hyperbole in their advertising. But how does the implication of such a strategy impact upon the perceived or actual standards of teaching? The paper begins with a brief overview of how universities have responded to students recasting themselves as customers, with the concomitant demands for satisfaction. It follows with a consideration of how these trends have become manifest in Australia. The focus narrows to consider how one university has responded to the changing environment, and then uses the example of one faculty within that university to exemplify the change in strategy. Finally, the paper considers the potential future relevance of that response.

Inventory competition and allocation in a multi-channel distribution system

Consider a supply chain involving one manufacturer and one independent retailer. The manufacturer distributes her product to the end consumer through the independent retailer as well as through her direct channel. Each of the two channels faces a stochastic demand. If one channel is out of stock, a fraction of the unsatisfied customers visit the other channel, which induces inventory competition between the channels. Under the scenario described above, will the manufacturer ever undercut the retailer’s order when the capacity is infinite? What are the equilibria of the game? How does a capacity constraint affect the equilibrium outcome? What is the optimal inventory allocation strategy for the manufacturer? Using a game theoretic model we seek answers to the above questions. Both the capacitated and the infinite capacity games are considered. We establish the necessary condition for a manufacturer to undercut a retailer’s order and show that a manufacturer may deny the retailer of inventory even when the capacity is ample. We show that there can be an equilibrium in the capacitated game where a manufacturer might not use the entire capacity and still deny a retailer inventory. We also show that a mild capacity constraint may make both parties better off and thereby increase the total supply chain profit. We develop a simple yet practical contract called the reverse revenue sharing contract and show that along with a fixed franchise fee this contract can coordinates our decentralized supply chain.

On (s, S) inventory system with random lead time and repeateddemands

We consider an (s, S) inventory system with random lead time and repeated demands of unsatisfied demands from the orbit. Whenever the inventory level falls to the level s, an order is placed to bring the level to S. The quantity ordered is M = S − s. Demands to the system are served immediately if there is a positive inventory. Otherwise it will go to a pool of unsatisfied customers called orbit. After a random amount of time, that demand is retried for service. We assume a Markovian setup for the time between consecutive arrivals, replenishments, and retrials. We obtained the condition for ergodicity of the system, steady state system size probabilities, expected length of the busy period of the system, expected inventory level, expected number of customers waiting in the orbit, expected waiting times, and so forth. A control problem is studied and some numerical illusrtations are provided.

ARC: an integrated admission and rate control framework for competitive wireless CDMA data networks using noncooperative games

The competition among wireless data service providers brings in an option for the unsatisfied customers to switch their providers, which is called churning. The implementation of Wireless Local Number Portability (WLNP) is expected to further increase the churn rate (the probability of users switching the provider). However, the existing resource management algorithms for wireless networks fail to fully capture the far-reaching impact of this unforeseen competitiveness. From this perspective, we first formulate noncooperative games between the service providers and the users. A user's decision to leave or join a provider is based on a finite set of strategies. A service provider can also construct its game strategy set so as to maximize their utility (revenue) considering the churn rate. Based on the game theoretic framework, we propose an integrated admission and rate control (ARC) framework for CDMA-based wireless data networks. The admission control is at the session (macro) level while the rate control is at the link layer packet (micro) level. Two admission control modes are considered - one-by-one mode and batch processing mode, in which multiple users are admitted at a time. We show that: 1) for the one-by-one mode, the Nash equilibrium using pure strategy can be established for both under-loaded and fully-loaded systems and 2) for batch processing mode, there is either an equilibrium in pure strategy or a dominant strategy exists for the service provider. Therefore, the providers have clearly defined admission criteria as outcome of the game. Users are categorized into multiple classes and offered differentiated services based on the price they pay and the service degradation they can tolerate. We show that the proposed ARC framework significantly increases the provider's revenue and also successfully offers differentiated QoS to the users.

The Dilemma of the Unsatisfied Customer in a Market Model of Public Administration

The relationship between administrative service performance and citizen satisfaction has been assumed, but not demonstrated, in the application of market models to public service delivery. Although the citizen satisfaction literature cautions that the link between objective and subjective measures of service quality is tenuous at best, public-sector professional organizations define a managerial focus on objective measures of service performance as accountability to citizens for outcomes. What if we’re wrong?

Analysis of multiserver queues with constant retrial rate

We consider multiserver retrial queues in which the time between two successive repeated attempts is independent of the number of customers applying for service. We study a Markovian model where each arriving customer finding any free server either enters service or leaves the service area and joins a pool of unsatisfied customers called `orbit'. This system is analyzed as a quasi-birth-and-death (QBD) process and its main performance characteristics are efficiently computed.

Thailand's international travel image: mostly favorable

A June 2000 study of 510 tourists examined their image of Thailand as an international travel destination and assessed the effects of the destination's image on the likelihood of the travelers' returning there. Using several statistical analyses, the study indicates that Thailand has a positive image as a rich cultural, natural, and historical travel destination. At the same time, however, Thailand's image is tarnished by pollution, prostitution, and deterioration of some tourist attractions. On balance, most tourists surveyed indicated that they would consider a return visit to Thailand. The only truly unsatisfied customers were certain tourists who had found themselves on a “free” tour that promoted shopping and other types of spending, yet left them in poor restaurants and hotels.

The role of discriminant analysis in the refinement of customer satisfaction assessment.

To test discriminant analysis as a method of turning the information of a routine customer satisfaction survey (CSS) into a more accurate decision-making tool. A 7-question, 10-multiple choice, self-applied questionnaire was used to study a sample of patients seen in two outpatient care units in Valparaíso, Chile, one of primary care (n=100) and the other of secondary care (n=249). Two cutting points were considered in the dependent variable (final satisfaction score): satisfied versus unsatisfied, and very satisfied versus all others. Results were compared with empirical measures (proportion of satisfied individuals, proportion of unsatisfied individuals and size of the median). The response rate was very high, over 97.0% in both units. A new variable, medical attention, was revealed, as explaining satisfaction at the primary care unit. The proportion of the total variability explained by the model was very high (over 99.4%) in both units, when comparing satisfied with unsatisfied customers. In the analysis of very satisfied versus all other customers, significant relationship was identified only in the case of the primary care unit, which explained a small proportion of the variability (41.9%). Discriminant analysis identified relationships not revealed by the previous analysis. It provided information about the proportion of the variability explained by the model. It identified non-significant relationships suggested by empirical analysis (e.g. the case of the relation very satisfied versus others in the secondary care unit). It measured the contribution of each independent variable to the explanation of the variation of the dependent one.

On the busy period of theM/G/1 retrial queue

The M/G/1 queue with repeated attempts is considered. A customer who finds the server busy, leaves the service area and joins a pool of unsatisfied customers. Each customer in the pool repeats his demand after a random amount of time until he finds the server free. We focus on the busy period L of the M/G/1$ retrial queue. The structure of the busy period and its analysis in terms of Laplace transforms have been discussed by several authors. However, this solution has serious limitations in practice. For instance, we cannot compute the first moments of L by direct differentiation. This paper complements the existing work and provides a direct method of calculation for the second moment of L.

Cosmetic tattoo refractive to Q-switched alexandrite laser

Lip tattooing is a common cosmetic technique not exempt from certain risks and which may lead an unsatisfied customer to seek tattoo elimination. To assess the clinical outcome of a patient with a brownish-colored cosmetic lip tattoo after treatment with the Q-switched alexandrite laser (QSAL). Two sites were tested using the pigment lesion dye laser (PLDL) and QSAL. The patient received 10 monthly sessions with QSAL, with an average fluence of 6.925 J/cm2. The double and triple shot technique was applied. The brownish pigmentation turned black after the PLDL and QSAL tests. Epidermal splattering and bleeding made a fluence increase with QSAL inadvisable. Treatment was unsuccessful. PLDL and QSAL may induce a photochemical alteration in brownish pigment. Factors that may contribute to the poor response of a cosmetic lip tattoo to QSAL treatment are related to pigment characteristics and laser parameters.

Steady state solution of a single-server queue with linear repeated requests

Queueing systems with repeated requests have many useful applications in communications and computer systems modeling. In the majority of previous work the repeat requests are made individually by each unsatisfied customer. However, there is in the literature another type of queueing situation, in which the time between two successive repeated attempts is independent of the number of customers applying for service. This paper deals with the M/G/1 queue with repeated orders in its most general setting, allowing the simultaneous presence of both types of repeat requests. We first study the steady state distribution and the partial generating functions. When the service time distribution is exponential we show that the performance characteristics can be expressed in terms of hypergeometric functions.

Steady state solution of a single-server queue with linear repeated requests

Queueing systems with repeated requests have many useful applications in communications and computer systems modeling. In the majority of previous work the repeat requests are made individually by each unsatisfied customer. However, there is in the literature another type of queueing situation, in which the time between two successive repeated attempts is independent of the number of customers applying for service. This paper deals with the M/G/1 queue with repeated orders in its most general setting, allowing the simultaneous presence of both types of repeat requests. We first study the steady state distribution and the partial generating functions. When the service time distribution is exponential we show that the performance characteristics can be expressed in terms of hypergeometric functions.

Customer needs and front‐office technology adoption

Based on a wide survey of over 1,500 Italian customers, analyses both payment services and sales and private banking areas. In the former, human contact attributes of service prove to be overemphasized when customer satisfaction is observed. In the latter, technology seems extremely important in helping bank branch officers decide which new services to offer to which customers. In both sections customers’ clusters are identified according to the importance of different service attributes; subsequently, they are described in terms of demographic, behavioural and psychographic characteristics. Technology‐oriented unsatisfied customers seem to belong to most segments. This calls for a major shift in the approach to delivery channels the majority of Italian banks are still adopting.

Single retrial queues with service option on arrival

We analyze a queueing system in which customers can call in to request service. A proportion, say 1−p of them on their arrival test the availability of the server. If the server is free the customer enters service immediately. Otherwise, if the service system is occupied, the customer joins a source of unsatisfied customers called the orbit. The remaining p proportion of the initial customers enter the orbit directly, without examining the state of the server. We consider two models characterized by the discipline governing the order of re-requests for service from the orbit. First, all the customers from the orbit apply at a fixed rate. Secondly, customers from the orbit are discouraged and reduce their rate of demand as more customers join the orbit. The arrival at and the demands from the orbit are both assumed to be according to the Poisson Process. However, the service times for both primary customers and customers from the orbit are assumed to have a general distribution. We calculate several characteristic quantities of these queueing systems.