Two-stage Online Reusable Resource Allocation: Reservation, Overbooking and Confirmation Call
Ruicheng Ao, Hengyu Fu, David Simchi-levi

TL;DR
This paper develops an online resource allocation policy for a two-stage reservation system with overbooking and cancellations, demonstrating near-optimal performance under certain conditions and validating with real hotel data.
Contribution
Introduces decoupled adaptive safety stocks and a policy that achieves exponential regret decay under busy season assumptions, improving over existing methods.
Findings
Regret is linear without busy season assumption.
Proposed policy achieves exponential regret decay under busy season.
Validated effectiveness with synthetic and hotel data.
Abstract
We study a two-stage online reusable resource allocation problem over T days involving advance reservations and walk-ins. Each day begins with a reservation stage (Stage I), where reservation requests arrive sequentially. When service starts (Stage II), both reserved and walk-in customers arrive to check in and occupy resources for several days. Reserved customers can cancel without penalty before or during a confirmation call initiated by the decision maker (DM) before day's end. The DM must immediately accept or reject each booking or check-in request, potentially overbooking by accepting more reservations than capacity. An overbooking loss occurs if a reserved customer's check-in is rejected in Stage II; a reward is obtained for each occupied resource unit daily. Our goal is to develop an online policy that controls bookings and check-ins to maximize total revenue over the T-day…
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Taxonomy
TopicsDistributed systems and fault tolerance · Cryptography and Data Security · Peer-to-Peer Network Technologies
