Optimal table-mix and acceptance–rejection problems in restaurants

In this paper, we address the issue of capacitated revenue management (RM) in the restaurant industry. First we present an integer programming (IP) model to find the optimal table-mix for a restaurant. Then we address the acceptance–rejection issue by IP to incorporate the continuous realisation of actual demand over a finite time horizon. We also analyse the implications of various manually easy-to-implement operational policies like one-up (parties can be seated at tables of the same or next-higher size) and higher levels of nesting. Our results show that an RM model yields about 33% additional revenue over one-up nesting. Also, the high percentage of optimal revenue (using RM models) achieved by some of these policies is associated with an increase in waiting time.