Abstract
Public storage is a booming industry. Both private customers and companies can rent temporary space from such facilities. The design of public storage warehouses, differs from other facility designs in its focus on revenue maximization. A major question is how to design public storage facilities to fit market segments and accommodate volatile demand in order to maximize revenue. Customers that cannot be accommodated with a space size of their choice can either be rejected or upgraded to a larger space. Based on data of 54 warehouses in America, Europe and Asia, we propose a new facility design approach with models for three different cases: an overflow customer rejection model, and two models with customer upgrade possibilities: one with reservation and another without reservation. We solve the models for several real warehouse cases, and our results show for all cases the existing public-storage warehouses can be redesigned to bring larger revenues. Finally, we show that the upgrading policy without reservation generally outperforms the upgrading policy with reservation.