Restaurant reservation management considering table combination

Abstract

This paper presents a case study of table reservation practice for restaurant business within Walt Disney World. A unique feature here is to consider table combination to capture revenue potentials from different party sizes and at different time periods. For example, a party of large size can be served by combining two or more small tables. A mixed integer programming (MIP) model is developed to make the reservation recommendation. We propose a rolling horizon reservation policy such that the value of a particular table is periodically evaluated and updated. This is a typical revenue management method in the airlines and other industries, the essence of which is to compare the future expected revenue with a currently offered price. Using historical data, numerical test shows a significant revenue improvement potential from our proposed model.