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The research objective is to empirically investigate the compensation packages maximizing the utilities of internal customers by applying the market segmentation theory. Data was collected from four Korean hospitals in Seoul, Busan and Gyunggi-do. The research is designed to seek the compensation package maximizing the utility of doctors by mixture regression model, which has been applied as latent structure and other type of finite mixture models from various academic fields since early 1980s. The mixture regression model shows the optimal segments number and fuzzy classification for each observation by EM(expectation-maximization algorism). The finite mixture regression model is to unmix the sample, to identify the groups, and to estimate the parameters of the density function underlying the observed data within each group. The doctors were segmented into 5 groups by their preference for the compensation package. The results of this study imply that the utility of doctors increases with differentiated compensation package segmented by their preference. #Compensation package #Mixture regression model #Segmentation

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