A note on optimal pricing for finite capacity queueing systems with multiple customer classes

A note on optimal pricing for finite capacity queueing systems with multiple customer classes

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Article ID: iaor200969533
Country: United States
Volume: 55
Issue: 5
Start Page Number: 412
End Page Number: 418
Publication Date: Aug 2008
Journal: Naval Research Logistics
Authors: , ,
Keywords: M/G/c queues, M/M/1 queues, pricing
Abstract:

This article investigates optimal static prices for a finite capacity queueing system serving customers from different classes. We first show that the original multi-class formulation in which the price for each class is a decision variable can be reformulated as a single dimensional problem with the total load as the decision variable. Using this alternative formulation, we prove an upper bound for the optimal arrival rates for a fairly large class of queueing systems and provide sufficient conditions that ensure the existence of a unique optimal arrival rate vector. We show that these conditions hold for M/M/1/m and M/G/s/s systems and prove structural results on the relationships between the optimal arrival rates and system capacity.

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