Advance Service Reservations with Heterogeneous Customers

Abstract

We study a fundamental model of resource allocation in which a finite number of resources must be assigned in an online manner to a heterogeneous stream of customers. The customers arrive randomly over time according to known stochastic processes. Each customer requires a specific amount of capacity and has a specific preference for each of the resources, with some resources being feasible for the customer and some not. The system must find a feasible assignment of each customer to a resource or must reject the customer. The aim is to maximize the total expected capacity utilization of the resources over the horizon. This model has application in services, freight transportation, and online advertising. We present online algorithms with bounded competitive ratios relative to an optimal offline algorithm that knows all stochastic information. Our algorithms perform extremely well compared to common heuristics, as demonstrated on a real data set from a large hospital system in New York City.