IDEAS home Printed from https://ideas.repec.org/a/spr/queues/v82y2016i1d10.1007_s11134-015-9457-7.html
   My bibliography  Save this article

Optimal pricing for a GI/M/k/N queue with several customer types and holding costs

Author

Listed:
  • Eugene A. Feinberg

    (Stony Brook University)

  • Fenghsu Yang

    (Stony Brook University)

Abstract

This paper studies optimal pricing for a GI/M/k/N queueing system with several types of customers. An arrival joins the queue if the price of service is not higher than the maximum amount that the arrival is willing to pay, and this maximum amount is defined by the customer type. A system manager chooses a price depending on the number of customers in the system. In addition, the system incurs holding costs when there are customers waiting in the queue for their services. Service times and holding costs do not depend on customer types. The holding costs are nondecreasing and convex with respect to the number of customers in the queue. This paper describes average reward optimal, canonical, bias optimal, and Blackwell optimal policies for this pricing problem.

Suggested Citation

  • Eugene A. Feinberg & Fenghsu Yang, 2016. "Optimal pricing for a GI/M/k/N queue with several customer types and holding costs," Queueing Systems: Theory and Applications, Springer, vol. 82(1), pages 103-120, February.
    • Handle: RePEc:spr:queues:v:82:y:2016:i:1:d:10.1007_s11134-015-9457-7
    DOI: 10.1007/s11134-015-9457-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11134-015-9457-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11134-015-9457-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Noah Gans & Sergei Savin, 2007. "Pricing and Capacity Rationing for Rentals with Uncertain Durations," Management Science, INFORMS, vol. 53(3), pages 390-407, March.
    2. Bruce L. Miller, 1969. "A Queueing Reward System with Several Customer Classes," Management Science, INFORMS, vol. 16(3), pages 234-245, November.
    3. David W. Low, 1974. "Optimal Dynamic Pricing Policies for an M / M / s Queue," Operations Research, INFORMS, vol. 22(3), pages 545-561, June.
    4. MILLER, Bruce L., 1969. "A queueing reward system with several customer classes," LIDAM Reprints CORE 41, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. P. J. Schweitzer & A. Federgruen, 1977. "The Asymptotic Behavior of Undiscounted Value Iteration in Markov Decision Problems," Mathematics of Operations Research, INFORMS, vol. 2(4), pages 360-381, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xufeng Yang & Juliang Zhang & Wen Jiao & Hong Yan, 2023. "Optimal Capacity Rationing Policy for a Container Leasing System with Multiple Kinds of Customers and Substitutable Containers," Management Science, INFORMS, vol. 69(3), pages 1468-1485, March.
    2. Vincent W. Slaugh & Bahar Biller & Sridhar R. Tayur, 2016. "Managing Rentals with Usage-Based Loss," Manufacturing & Service Operations Management, INFORMS, vol. 18(3), pages 429-444, July.
    3. Xufeng Yang & Wen Jiao & Juliang Zhang & Hong Yan, 2022. "Capacity management for a leasing system with different equipment and batch demands," Production and Operations Management, Production and Operations Management Society, vol. 31(7), pages 3004-3020, July.
    4. Son, Jae-Dong, 2007. "Customer selection problem with profit from a sideline," European Journal of Operational Research, Elsevier, vol. 176(2), pages 1084-1102, January.
    5. Felix Papier & Ulrich W. Thonemann, 2010. "Capacity Rationing in Stochastic Rental Systems with Advance Demand Information," Operations Research, INFORMS, vol. 58(2), pages 274-288, April.
    6. Papier, Felix & Thonemann, Ulrich W., 2011. "Capacity rationing in rental systems with two customer classes and batch arrivals," Omega, Elsevier, vol. 39(1), pages 73-85, January.
    7. Jae‐Dong Son & Yaghoub Khojasteh Ghamari, 2008. "Optimal admission and pricing control problems in service industries with multiple servers and sideline profit," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 24(4), pages 325-342, July.
    8. Demet Batur & Jennifer K. Ryan & Zhongyuan Zhao & Mehmet C. Vuran, 2019. "Dynamic Pricing of Wireless Internet Based on Usage and Stochastically Changing Capacity," Manufacturing & Service Operations Management, INFORMS, vol. 21(4), pages 833-852, October.
    9. Noah Gans & Sergei Savin, 2007. "Pricing and Capacity Rationing for Rentals with Uncertain Durations," Management Science, INFORMS, vol. 53(3), pages 390-407, March.
    10. Kyle Y. Lin, 2003. "Decentralized admission control of a queueing system: A game‐theoretic model," Naval Research Logistics (NRL), John Wiley & Sons, vol. 50(7), pages 702-718, October.
    11. Kyle Y. Lin & Sheldon M. Ross, 2003. "Admission Control with Incomplete Information of a Queueing System," Operations Research, INFORMS, vol. 51(4), pages 645-654, August.
    12. E. Carrizosa & E. Conde & M. Muñoz-Márquez, 1998. "Admission Policies in Loss Queueing Models with Heterogeneous Arrivals," Management Science, INFORMS, vol. 44(3), pages 311-320, March.
    13. Davide Mezzogori & Giovanni Romagnoli & Francesco Zammori, 2021. "Defining accurate delivery dates in make to order job-shops managed by workload control," Flexible Services and Manufacturing Journal, Springer, vol. 33(4), pages 956-991, December.
    14. van Jaarsveld, W.L. & Dekker, R., 2009. "Finding optimal policies in the (S - 1, S ) lost sales inventory model with multiple demand classes," Econometric Institute Research Papers EI 2009-14, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    15. van Wijk, A.C.C. & Adan, I.J.B.F. & van Houtum, G.J., 2012. "Approximate evaluation of multi-location inventory models with lateral transshipments and hold back levels," European Journal of Operational Research, Elsevier, vol. 218(3), pages 624-635.
    16. Song-Hee Kim & Carri W. Chan & Marcelo Olivares & Gabriel Escobar, 2015. "ICU Admission Control: An Empirical Study of Capacity Allocation and Its Implication for Patient Outcomes," Management Science, INFORMS, vol. 61(1), pages 19-38, January.
    17. Nadav Lavi & Hanoch Levy, 2020. "Admit or preserve? Addressing server failures in cloud computing task management," Queueing Systems: Theory and Applications, Springer, vol. 94(3), pages 279-325, April.
    18. Koeleman, P.M. & Bhulai, S. & van Meersbergen, M., 2012. "Optimal patient and personnel scheduling policies for care-at-home service facilities," European Journal of Operational Research, Elsevier, vol. 219(3), pages 557-563.
    19. Kyle Y. Lin & Moshe Kress & Roberto Szechtman, 2009. "Scheduling policies for an antiterrorist surveillance system," Naval Research Logistics (NRL), John Wiley & Sons, vol. 56(2), pages 113-126, March.
    20. Li, Xueping & Wang, Jiao & Sawhney, Rapinder, 2012. "Reinforcement learning for joint pricing, lead-time and scheduling decisions in make-to-order systems," European Journal of Operational Research, Elsevier, vol. 221(1), pages 99-109.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:queues:v:82:y:2016:i:1:d:10.1007_s11134-015-9457-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.