Optimal service design at the interface of marketing and operations : what benefits to provide to customers and how to create them?

Strohm, Fabian ; Schön, Cornelia

Document Type: Conference presentation
Year of publication: 2016
Conference title: OR2016 - International Conference on Operations Research
Location of the conference venue: Hamburg, Germany
Date of the conference: 30.08-2.09. 2016
Publication language: English and Other
Institution: Business School > Service Operations Management (Schön 2014-)
Subject: 330 Economics
Abstract: Service design involves making decisions with regard to what benefits to offer to the customer (incl. what price to charge) and how to create these benefits. We present an integrated optimization approach for service design that links the design decisions on service pricing, service outcome and underlying front- and back-office service processes. Considering this interdependence allows to take into account service value and the costs of service delivery simultaneously. We thereby make a contribution to the problem of evaluating the financial performance of a service design, which has been identified as a top research priority in the service research community. Our problem formulation is very flexible with regard to what types of customer value propositions and production/delivery processes can be considered. Further, our optimization approach provides a standardized interface to common process modeling techniques such as flowcharts, blueprints, process chain network diagrams, or simulation models. As a result, our approach can be applied to a number of different business environments and industries, and selected case studies from a pizza delivery service and from a large railway transport service provider demonstrate real-world applicability of the optimization model. Regarding its mathematical structure, the initial problem formulation is nonlinear mixed-integer; however, we show how to transform it to a mixed-integer linear program.

Metadata export


+ Search Authors in

+ Page Views

Hits per month over past year

Detailed information

You have found an error? Please let us know about your desired correction here: E-Mail

Actions (login required)

Show item Show item