Article ID: | iaor20115773 |
Volume: | 67 |
Issue: | 4 |
Start Page Number: | 305 |
End Page Number: | 331 |
Publication Date: | Apr 2011 |
Journal: | Queueing Systems |
Authors: | Karaesmen Fikri, il Eren Basar, rmeci E Lerzan |
Keywords: | programming: markov decision |
This paper investigates an optimal sequencing and dynamic pricing problem for a two‐class queueing system. Using a Markov Decision Process based model, we obtain structural characterizations of optimal policies. In particular, it is shown that the optimal pricing policy depends on the entire queue length vector but some monotonicity results prevail as the composition of this vector changes. A numerical study finds that static pricing policies may have significant suboptimality but simple dynamic pricing policies perform well in most situations.