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Please use this identifier to cite or link to this item: http://dspace.library.iitb.ac.in/jspui/handle/10054/6901

Title: Pricing surplus server capacity for mean waiting time sensitive customers
Authors: SINHA, SK
RANGARAJ, N
HEMACHANDRA, N
Keywords: queue
decisions
demand
Issue Date: 2010
Publisher: ELSEVIER SCIENCE BV
Citation: EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, 205(1), 159-171
Abstract: We consider a queueing model wherein the resource is shared by two different classes of customers, primary (existing) and secondary (new), under a service level based pricing contract. This contract between secondary Class Customers and resource manager specifies unit admission price and quality of service (QoS) offered. We assume that the secondary customers' Poisson arrival rate depends linearly on unit price and service level offered while the server uses a delay dependent priority queue management scheme. We analyze the joint problem of optimal pricing and operation of the resource with the inclusion of secondary class customers, while continuing to offer a pre-specified QoS to primary class customers. Our analysis leads to an algorithm that finds, in closed form expressions, the optimal points of the resulting non-convex constrained optimization problem. We also study in detail the structure and the non-linear nature of these optimal pricing and operating decisions.
URI: http://dx.doi.org/10.1016/j.ejor.2009.12.023
http://dspace.library.iitb.ac.in/xmlui/handle/10054/6901
http://hdl.handle.net/10054/6901
ISSN: 0377-2217
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