SIMULATION AND QUEUING THEORY APPLIED TO A SINGLE-SERVER QUEUE WITH ADVERTISING AND BALKING

We use a single-server queueing model, with limited waiting room capac ity, to model a situation where the manager of a facility tries to max imize the profit generated by the facility. He advertises to attract c ustomers. The effectiveness of advertising may depend on the reputatio n of the facility, which is measured by the fraction of customers who balk. We assume Poisson arrivals and allow Erlang service times to stu dy how the variance of service times affects the optimal policy, both when the efficiency of advertising is exogenous, and when it is a func tion of the balking rate. We conclude that the optimal policies are si milar for deterministic service times, but diverge as the variance of the service time increases.