Strategic Revenue Management of Preemptive versus Non-Preemptive Queues

07/14/2020

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by   Jonathan Chamberlain, et al.

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Consider a two-class unobservable priority queue, with Poisson arrivals, generally distributed service, and strategic customers. Customers are charged a fee when joining the premium class. We analyze the maximum revenue achievable under the non-preemptive (NP) and preemptive-resume (PR) policies, and show that a provider is always better off implementing the PR policy. Further, the maximum revenue under PR is sometimes achieved when only a fraction of the customers join the premium class.