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Resource Allocation in Multisite Service Systems with Intersite Customer Flows

Department of Industrial Engineering and Interdisciplinary OR Programs, North Carolina State University, 325 Riddick, Raleigh, North Carolina 27695
Department of Industrial Engineering and Engineering Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong, China
Department of Information and Systems Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong, China
xchao(eos.ncsu.edu
liulim(ust.hk
imzheng(ust.hk

Motivated by a project in health–care management, we study the resource allocation problem in multisite service systems with intersite customer flows. We aim at providing insights to and guidelines for resource allocation in these service systems when some service criterion, such as average waiting time, loss rate, or blocking probability, is a major concern. We develop analytical optimization models and from them we obtain the explicit optimal allocation policy. Our results demonstrate that the optimal resource allocation solution exhibits a structure of "one large and many small."

Key Words: Multisite Service System; Resource Allocation; Service Quality; Waiting Time; Customer Switching; Health Care; Incentive Compatibility
History: Received: March 29, 2002;