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date: 11 April 2021

Abstract and Keywords

Services engineering involves the virtual or operational modification of an underlying service. Virtual modifications are real (non-financial) options that affect the fulfilment or consumption of a service. Service providers can use them to mitigate supply or demand risk. Operational modifications involve adding (bundling) or removing (unbundling) ancillary services from core services. This article is organized as follows. Section 28.2 discusses virtual service modifications, a variety of real options that improve profits by segmenting customers. These include fulfillment options, consumption options, and real options for access services. Section 28.3 investigates operational service modifications. These include bundling, unbundling, and versioning. Section 28.4 discusses ways to apply services engineering to revenue management and customer relationship management, while Section 28.5 concludes.

Keywords: services engineering, operational service modifications, revenue management, customer relationship management

Guillermo Gallego

Guillermo Gallego is a Professor at the Industrial Engineering and Operations Research Department at Columbia University and a world-renowned expert in pricing optimization, revenue management, inventory theory, and supply chain optimization. He has published over 60 papers in operations research, management science, and pricing journals including seminal papers in Supply Chain, Inventory Theory, and Dynamic Pricing. His graduate students are associated with prestigious universities.

Catalina Stefanescu

Catalina Stefanescu is an Associate Professor and the Director of Research at the European School of Management and Technology (ESMT) in Berlin. Prior to joining ESMT, she was Assistant Professor of Decision Sciences at the London Business School. She received her PhD and MS in Operations Research from Cornell University, and her BS in Mathematics from the University of Bucharest.

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