Managing service operations based on customer preferences

This article presents the results of a study using discrete choice analysis (DCA) in the dine‐in pizza industry. DCA offers an effective approach for incorporating customer preferences into operating decisions in service businesses. Our results show how customers tradeoff among several determinant attributes (e.g. price, waiting time, quality) when choosing a dine‐in pizza restaurant. The article also offers evidence that managers’ perceptions of customer choice patterns are not the same as customers’ actual choice patterns for the businesses we examined. Finally, we show how our results can be easily incorporated into a decision support system for structuring service operations according to customer preferences.