Strategic and operational decisions in restaurant revenue management

Guerriero, Francesca; Miglionico, Giovanna; Olivito, Filomena

doi:10.1016/j.ejor.2014.02.048

Cited by 28 publications

(20 citation statements)

References 21 publications

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“…RM has been accredited for the success in various industries. Originally developed and implemented for airlines (Smith et al, 1992), it quickly expanded to hotels (Goldman et al, 2002;Badinelli, 2000) and car rentals (Geraghty and Johnson, 1997;Li and Pang, 2016), while extending to other less traditional industries such as restaurants (Hwang et al, 2010;Guerriero et al, 2014) and cruises (Ladany and Arbel, 1991;Maddah et al, 2010). An overview of research on these can be found in Chiang et al (2007).…”

Section: Introductionmentioning

confidence: 99%

Revenue management of airport car parks in continuous time

Papayiannis

Johnson

Yumashev

et al. 2018

IMA Journal of Management Mathematics

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We study the revenue management (RM) problem encountered in airport carparks, with the primary objective to maximize revenues under a continuous-time framework. The implementation of pre-booking systems for airport carparks has spread rapidly around the world and pre-booking is now available in most major airports. Currently, most RM practices in carparks are simple adjustments of those developed for hotels, exploiting the similarities between the two industries. However, airport carparks have a distinct setting where the price-per-day of a parking space is heavily discounted by the length-of-stay of the booking. This is because the customer decision tends to be made after the length of the trip is already set, and it becomes a choice between parking or alternative modes of transport. Consequently, the length-of-stay becomes a critical variable for revenue optimization. Since customers are able to book the parking by the minute, the resulting state space is very large, making a conventional network solution intractable. Instead, decomposed single-resource problems need to be considered. Here we develop a bid-price control strategy to manage the bookings and propose novel approaches to define such bidprices depending on the length of stay, which could be utilized in real-time RM algorithms. Managing stochastic carpark bookings by length-of-stay in the decomposed single-resource approximation allowed us to achieve within 5% of the expected revenues for a multi-resource approximation, with a fraction of the computational effort. When expected demand exceeds the available parking capacity, the method increases the revenues by up to 45% relative to the first-come-first-serve acceptance policy.

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Section: Introductionmentioning

confidence: 99%

Revenue management of airport car parks in continuous time

Papayiannis

Johnson

Yumashev

et al. 2018

IMA Journal of Management Mathematics

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“…Shields (2006) found that greater changes in standard operating procedures between high and low demand periods are positively related to revenue generation. Guerriero et al (2014) proposed new formulations of table mix problems by considering the expected meal duration, the room share, and tables' combinability and the performances of the different booking control policies. Thompson (2015) assessed the use of early-bird and night-owl specials in restaurants as a tool for service capacity-demand management using back-of-the-envelope calculations and cannibalizationbased value estimation.…”

Section: Introductionmentioning

confidence: 99%

New performance indicators for restaurant revenue management: ProPASH and ProPASM

Heo

2017

International Journal of Hospitality Management

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“…At the strategic level, problems of optimal configuration of the order processing/handling environment occur. In the case of a restaurant, these include the selection, configuration and arrangement of tables, known as the Table Mix Problem (TMP) [1,2]. The ''best'' table mix is influenced by several factors such as: the expected number of each size party that will be potential customers; the expected meal duration of each party; the dimensions and the layout of the restaurant, which limit the number and type of tables that can be used, and the possibility of combining tables of different dimensions.…”

Section: Iiliterature Reviewmentioning

confidence: 99%

“…A very good illustration of the handling of jobs (orders) in groups is the process of preparing and serving food in a restaurant [1]. Guests enter the restaurant in different groups at different moments.…”

mentioning

confidence: 99%