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A Robust Optimization Approach for Improving Service Quality

Delivering high quality service during the service encounter is central to competitive advantage in service organizations. However, achieving such high quality while controlling for costs is a major challenge for service managers. The purpose of this paper is to present an approach for addressing this challenge. The approach entails developing a model linking service process operational variables to service quality metrics to provide guidelines for service resource allocation. The approach enables the service operations manager to take specific actions toward service quality improvement, in light of the costs involved. A novel feature of the approach is the development of robust optimization models, which provide optimal operational guidelines while accounting for uncertainty in the model's parameters. We demonstrate the applicability of the approach in a large health care facility.