An Optimal Pricing Strategy in An M/M/1 Queueing System Based on Customer's Sojourn Time-Dependent Reward Level

- Journal title : The Journal of the Korea Contents Association
- Volume 16, Issue 7, 2016, pp.146-153
- Publisher : The Korea Contents Association
- DOI : 10.5392/JKCA.2016.16.07.146

Title & Authors

An Optimal Pricing Strategy in An M/M/1 Queueing System Based on Customer's Sojourn Time-Dependent Reward Level

Lee, Doo Ho;

Lee, Doo Ho;

Abstract

This work studies the equilibrium behavior of customers and optimal pricing strategies of the sever in a continuous-time M/M/1 queueing system. In this work, we consider two pricing models. The first one is called the ex-ante payment scheme where the server charges a flat price for all services, and the second one is called the ex-post payment scheme where the server charges a price that is proportional to the time a customer spends in the system. In each pricing model, the departing customer receives the reward that is inversely proportional to his/her sojourn time. The server should make the optimal pricing decisions in order to maximize its expected profit per unit time in each payment scheme. This work also investigates customer's equilibrium joining or balking behaviors under server's optimal pricing strategies. Numerical experiments are conducted to help the server best select one between two pricing models.

Keywords

Optimal Pricing;Equilibrium Behavior;Profit Maximization;M/M/1 Queueing System;

Language

Korean

References

1.

김태웅, 서비스 운영관리, 신영사, 2010.

2.

조광문, "웹 서비스 기반의 비즈니스 모델에 서비스 과학 적용," 한국콘텐츠학회논문지, 제9권, 제10호, pp.268-273, 2009.

3.

http://www.netflix.com/kr/

4.

http://aws.amazon.com/ko/

5.

http://apps.google.com/

6.

http://www.microsoftstore.com/Office365/

7.

http://www.salesforce.com/kr/

8.

양원석, 김태성, 이두호, "정보보호위협하에서 경제적인 데이터백업 운영 정책 분석," 한국콘텐츠학회논문지, 제14권, 제10호, pp.270-278, 2014.

9.

R. Ghosh, K. S. Trivedi, V. K. Naiky, and D. S. Kim, "End-to-End Performability Analysis for Infrastructure-as-a-Service Cloud: An Interacting Stochastic Models Approach," Proceedings of IEEE 16th Pacific Rim International Symposium on Dependable Computing, pp.125-132, 2010.

10.

V. Gupta, M. H. Balter, K. Sigman, and W. Whitt, "Analysis of join-the-shortest-queue routing for web server farms," Performance Evaluation, Vol.64, pp.1062-1081, 2007.

11.

W. Sun, S. Li, N. Tian, and H. Zhang, "Equilibrium analysis in batch-arrival queues with complementary services," Applied Mathematical Modelling, Vol.33, pp.224-241, 2009.

12.

Y. Ma and Z. Liu, "Pricing analysis in Geo/Geo/1 queueing system," Mathematical Problems in Engineering, Vol.2015, Article ID 181653, 2015.

13.

S. M. Ross, Stochastic Processes, 2nd edition, JOHN WILEY & SONS, 1996.

14.

이호우, 대기행렬이론, 제3판, 시그마프레스, 2006.

15.

S. Boyd and L. Vandenberghe, Convex Optimization, Cambridge University Press, 2004.