Title: Optimal table-mix and acceptance–rejection problems in restaurants

Authors: Sandeep Karmarkar, Goutam Dutta

Addresses: Department of Production and Quantitative Methods, Indian Institute of Management, Ahmedabad 380 015, India. ' Department of Production and Quantitative Methods, Indian Institute of Management, Ahmedabad 380 015, India

Abstract: In this paper, we address the issue of capacitated revenue management (RM) in the restaurant industry. First we present an integer programming (IP) model to find the optimal table-mix for a restaurant. Then we address the acceptance–rejection issue by IP to incorporate the continuous realisation of actual demand over a finite time horizon. We also analyse the implications of various manually easy-to-implement operational policies like one-up (parties can be seated at tables of the same or next-higher size) and higher levels of nesting. Our results show that an RM model yields about 33% additional revenue over one-up nesting. Also, the high percentage of optimal revenue (using RM models) achieved by some of these policies is associated with an increase in waiting time.

Keywords: table-mix; capacity allocation; restaurants; simulation; acceptance–rejection policies; optimisation models; one-up nesting; waiting times; penalty functions; capacitated revenue management; integer programming; continuous realisation; actual demand; finite time horizons; operational policies; catering industry; hospitality industry; manual operations; table seating; additional revenue; optimal revenues; Ahmedabad; India.

DOI: 10.1504/IJRM.2011.038616

International Journal of Revenue Management, 2011 Vol.5 No.1, pp.1 - 15

Available online: 15 Feb 2011 *

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