Ashok Krishnan, KS and Singh, C and Maguluri, ST and Parag, P (2022) Optimal pricing in multi server systems. In: Performance Evaluation, 154 .
|
PDF
per_eva_154_2022.pdf - Published Version Download (943kB) | Preview |
Abstract
We study optimal service pricing in server farms where customers arrive according to a renewal process and have independent and identical (i.i.d.) exponential service times and i.i.d. valuations of the service. The service provider charges a time varying service fee aiming at maximizing its revenue rate. The customers that find free servers and service fees lesser than their valuation join for the service else they leave without waiting. We consider both finite server and infinite server farms. We solve the optimal pricing problems using the framework of Markov decision problems. We show that the optimal prices depend on the number of free servers. We propose algorithms to compute the optimal prices. We also establish several properties of the optimal prices and the corresponding revenue rates in the case of Poisson customer arrivals. We illustrate all our findings via numerical evaluation. © 2021 Elsevier B.V.
| Item Type: | Journal Article |
|---|---|
| Publication: | Performance Evaluation |
| Publisher: | Elsevier B.V. |
| Additional Information: | The copyright for this article belongs to Authors |
| Keywords: | Costs; Economics; Sales, Exponentials; Markov Decision Processes; Multi-server system; Multiservers; Optimal pricing; Renewal process; Server farms; Server system; Service pricing; Service time, Markov processes |
| Department/Centre: | Division of Electrical Sciences > Electronic Systems Engineering (Formerly Centre for Electronic Design & Technology) Division of Electrical Sciences > Electrical Communication Engineering |
| Date Deposited: | 17 Feb 2022 06:39 |
| Last Modified: | 17 Feb 2022 06:39 |
| URI: | http://eprints.iisc.ac.in/id/eprint/71314 |
Actions (login required)
 |
View Item |
