Simulation and queueing theory applied to a single-server queue with advertising and balking

The authors use a single-server queueing model, with limited waiting room capacity, to model a situation where the manager of a facility tries to maximize the profit generated by the facility. The manager advertises to attract customers. The effectiveness of advertising may depend on the reputation of the facility, which is measured by the fraction of customers who balk. The authors assume Poisson arrivals and allow Erlang service times to study how the variance of service times affects the optimal policy, both when the efficiency of advertising is exogeneous, and when it is a function of the balking rate. They conclude that the optimal policies are similar for deterministic service times, but diverge as the variance of the service time increases.