| The demand for services in industry sectors like energy,telecommunication,transportation,restaurants,theme parks,hotels,etc.,often fluctuates following some peak-and-off-peak patterns.During peak periods,demand cannot be always met due to capacity constraints;while capacity may become excessive in off-peak periods.Indeed,demand fluctuations pose real challenges to service operations management.Many companies use demand-based service capacity allocation policies to mitigate the impact of demand volatility,thereby increasing resource utilization and improving profitability.However,when the customer’s purchase decision is influenced by social interaction,the effectiveness of such policy may be diminished.Based on this demand-based service capacity allocation policy,this paper studies the demand process dynamic system of repeatable purchase in the presence of social interaction.The customer has adaptive forward-looking characteristic.We describe the characteristics of the demand process with a two-dimensional dynamical system.The experimental results show that the equilibrium point of the demand system may be unstable.According to the given reservation utility distribution function,we first analyze the stability of the equilibrium point under social interaction and customer adaptive forward behavior in various scenarios,and then use the bifurcation plot and Lyapunov exponent to characterize its dynamic features and processes.The conclusion shows that the demand process may be stable,periodic,and may even be chaotic which indicates that the expected effectiveness of the demand-based service capacity allocation policy may be reduced by the customer’s adaptive forward-looking behavior under the influence of social interaction.The final results of the paper highlight the fact that in the presence of social interaction,which shows the simple demand mechanism can even produce very complex phenomena.To make the demand-based service capacity allocation strategy effective,the company must consider the impact of the existence of social interaction in making decisions. |
