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: | Ayhan Hayriye, Ziya Serhan, Foley Robert D |
Keywords: | M/G/c queues, M/M/1 queues, pricing |
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.