Applications of fluid models in service operations management

The service sector is an indisputable and fundamental pillar of today’s business world, encompassing nearly 80 percent of the workforce in the USA. Service operations management has been a fertile research area addressing strategic, tactical and operational challenges related to service systems. Such problems usually have a complex, dynamic stochastic nature, often leading to models that are both analytically and computationally complicated. In such cases, fluid deterministic models that approximate the dynamics of stochastic/queueing systems can yield accurate and tractable optimization formulations. These formulations enable the construction of intuitive, insightful policies that are implementable in practice, even in time-varying systems. This paper focuses on the applicative aspects of fluid models in addressing various problems in service and healthcare operations management. We review the literature on fluid model applications, discuss the situations in which fluid models are less adequate as well as the implementation of a fluid-based policy into a stochastic discrete system. Lastly, we identify future research opportunities and challenges that have yet to be addressed.