Pricing in M/M/1 queues when cost of waiting in queue differs from cost of waiting in service
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Date
2017
Authors
görkem sariyer
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Open Access Color
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Abstract
Service providers can adjust the entrance price to the state of the demand in real life service systems where the customers' decision to receive the service is based on this price state of demand and other system parameters. We analyzed service provider's short and long term pricing problems in unobservable M/M/1queues having the rational customers where for customers the unit cost of waiting in the queue is higher than unit cost of waiting in the service. We showed that waiting in the queue has a clear negative effect on customers' utilities hence the service provider's price values. We also showed that in the short term monopolistic pricing is optimal for congested systems with high server utilization levels whereas in the long term market capturing pricing is more profitable
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İstatistik ve Olasılık
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Citation
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Source
An International Journal of Optimization and Control: Theories & Applications (IJOCTA)
Volume
7
Issue
1
Start Page
35
End Page
41
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