An optimal-control-based decision-making model and consulting methodology for service enterprises

Abstract

The service industry has become a primary point of growth in most countries. However, the current service business is largely constrained by human factors and lacks automated and quantitative techniques for operation and decision making. In this paper, we propose an optimal-control-based decision-making model that facilitates performance analysis and strategy planning for service enterprises. Using approximate dynamic programming, we are able to handle the models complexity and obtain a near-optimal solution for the decision making of employee management, advertisement, and asset investment. We validate our model and approach in a business simulation practice. Furthermore, we propose a consulting methodology based on the optimal-control model and describe its application in service consulting practices. © 2006 IEEE.