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Optimal number of bypasses: minimizing cost of calls to wireless phones under Calling Party Pays

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  • Eduardo González
  • Leonardo Epstein
  • Verónica Godoy

Abstract

In telecommunications, Calling Party Pays is a billing formula that prescribes that the person who makes the call pays its full cost. Under CPP land-line to wireless phone calls have a high cost for many organizations. They can reduce this cost at the expense of installing wireless bypasses to replace land-line to wireless traffic with wireless-to-wireless traffic, when the latter is cheaper than the former. Thus, for a given time-horizon, the cost of the project is a trade-off between traffic to-wireless and the number of bypasses. We present a method to determine the number of bypasses that minimizes the expected cost of the project. This method takes into account hourly varying traffic intensity. Our method takes advantage of parallels with inventory models for rental items. Examples illustrate the economic value of our approach. Copyright Springer Science+Business Media, LLC 2012

Suggested Citation

  • Eduardo González & Leonardo Epstein & Verónica Godoy, 2012. "Optimal number of bypasses: minimizing cost of calls to wireless phones under Calling Party Pays," Annals of Operations Research, Springer, vol. 199(1), pages 179-191, October.
    • Handle: RePEc:spr:annopr:v:199:y:2012:i:1:p:179-191:10.1007/s10479-011-0993-1
    DOI: 10.1007/s10479-011-0993-1
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    References listed on IDEAS

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    1. Ger Koole & Avishai Mandelbaum, 2002. "Queueing Models of Call Centers: An Introduction," Annals of Operations Research, Springer, vol. 113(1), pages 41-59, July.
    2. William D. Whisler, 1967. "A Stochastic Inventory Model for Rented Equipment," Management Science, INFORMS, vol. 13(9), pages 640-647, May.
    3. M. Tainiter, 1964. "Some Stochastic Inventory Models for Rental Situations," Management Science, INFORMS, vol. 11(2), pages 316-326, November.
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    Cited by:

    1. Leonardo D. Epstein & Eduardo González & Abdón Sepúlveda, 2020. "Optimal size of a rental inventory with items available from a secondary source: a model with non-stationary probabilities," Annals of Operations Research, Springer, vol. 286(1), pages 371-390, March.
    2. Eduardo González & Leonardo Epstein, 2015. "Minimum cost in a mix of new and old reusable items: an application to sizing a fleet of delivery trucks," Annals of Operations Research, Springer, vol. 232(1), pages 135-149, September.

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