Optimal Pricing Strategies and Equilibrium Behaviors in the Discrete-Time Geo/Geo/1 Queueing System

2017 ◽  
Vol 16 (2) ◽  
pp. 234-239
Author(s):  
Doo Ho Lee
Keyword(s):  
Discrete Time ◽  
Queueing System ◽  
Optimal Pricing ◽  
Pricing Strategies

scholarly journals Optimal Pricing Strategies and Customers’ Equilibrium Behavior in an Unobservable M/M/1 Queueing System with Negative Customers and Repair

2017 ◽  
Vol 2017 ◽  
pp. 1-11 ◽  
Author(s):  
Doo Ho Lee
Keyword(s):  
Queueing System ◽  
Point Of View ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Negative Customers ◽  
Economic Point ◽  
Equilibrium Behavior ◽  
Payment Scheme ◽  
Ex Post ◽  
Pricing Schemes

This work investigates the optimal pricing strategies of a server and the equilibrium behavior of customers in an unobservable M/M/1 queueing system with negative customers and repair. In this work, we consider two pricing schemes. The first is termed the ex-post payment scheme, where the server charges a price that is proportional to the time spent by a customer in the system. The second scheme is the ex-ante payment scheme, where the server charges a flat rate for all services. Based on the reward-cost structure, the server (or system manager) should make optimal pricing decisions in order to maximize its expected profit per time unit in each payment scheme. This study also investigates equilibrium joining/balking behavior under the server’s optimal pricing strategies in the two pricing schemes. We show, given a customer’s equilibrium, that the two pricing schemes are perfectly identical from an economic point of view. Finally, we illustrate the effect of several system parameters on the optimal joining probabilities, the optimal price, and the equilibrium behavior via numerical examples.

scholarly journals Pricing Analysis in Geo/Geo/1 Queueing System

2015 ◽  
Vol 2015 ◽  
pp. 1-5 ◽  
Author(s):  
Yan Ma ◽  
Zaiming Liu
Keyword(s):  
Numerical Experiments ◽  
Queueing System ◽  
Point Of View ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Economic Point ◽  
Equilibrium Behavior ◽  
System Parameters ◽  
Ex Post ◽  
Ex Ante

This paper studies the equilibrium behavior of customers and optimal pricing strategies of servers in a Geo/Geo/1 queueing system. Two common pricing mechanisms are considered. The first one is called ex-post payment (EPP) scheme where the server collects tolls proportional to queue times, and the second one is called ex-ante payment (EAP) scheme where the server charges a flat fee for the total service. The server sets the toll price to maximize its own profit. It is found that, under a customer’s choice equilibrium, the two toll mechanisms are equivalent from the economic point of view. Finally, we present several numerical experiments to investigate the effects of system parameters on the equilibrium customer joining rate and servers’ profits.

scholarly journals Pricing Strategies of Logistics Distribution Services for Perishable Commodities

Algorithms ◽  
2018 ◽  
Vol 11 (11) ◽  
pp. 186
Author(s):  
Tao Li ◽  
Yan Chen ◽  
Taoying Li
Keyword(s):  
Dynamic Pricing ◽  
Consumer Satisfaction ◽  
Service Providers ◽  
Time Constraints ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Pricing Model ◽  
Logistics Service ◽  
Distribution Services ◽  
Perishable Goods

The problem of pricing distribution services is challenging due to the loss in value of product during its distribution process. Four logistics service pricing strategies are constructed in this study, including fixed pricing model, fixed pricing model with time constraints, dynamic pricing model, and dynamic pricing model with time constraints in combination with factors, such as the distribution time, customer satisfaction, optimal pricing, etc. By analyzing the relationship between optimal pricing and key parameters (such as the value of the decay index, the satisfaction of consumers, dispatch time, and the storage cost of the commodity), it is found that the larger the value of the attenuation coefficient, the easier the perishable goods become spoilage, which leads to lower distribution prices and impacts consumer satisfaction. Moreover, the analysis of the average profit of the logistics service providers in these four pricing models shows that the average profit in the dynamic pricing model with time constraints is better. Finally, a numerical experiment is given to support the findings.

scholarly journals A Welfare Assessment of Revenue Management Systems

2020 ◽  
Vol 19 (1) ◽  
pp. 1-41
Author(s):  
Nicolas Dupuis ◽  
Marc Ivaldi ◽  
Jerome Pouyet
Keyword(s):  
Theoretical Model ◽  
Revenue Management ◽  
Consumer Preferences ◽  
Consumer Surplus ◽  
Capacity Constraints ◽  
Management Systems ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Welfare Impact ◽  
Welfare Assessment

AbstractWe study the welfare impact of revenue management, a practice which is widely spread in the transport industry, but whose impact on consumer surplus remains unclear. We develop a theoretical model of revenue management allowing for heterogeneity in product characteristics, capacity constraints, consumer preferences, and probabilities of arrival. We also introduce dynamic competition between revenue managers. We solve this model computationally and recover the optimal pricing strategies. We find that revenue management is generally welfare enhancing as it raises the number of sales.

scholarly journals Selling to strategic customers with cost uncertainty

2020 ◽  
Vol 14 (1) ◽  
Author(s):  
Guodaohou Song ◽  
Xiaofang Wang
Keyword(s):  
Production Cost ◽  
Learning Effect ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Strategic Customers ◽  
Cost Uncertainty ◽  
Intertemporal Pricing ◽  
Negative Comments ◽  
Second Period

AbstractProduction cost can be influenced by previous sales in an uncertain way. In reality, production cost may decrease in the number of initial buyers due to the learning effect, or increase in the number of initial buyers due to the quality-improving pressure from negative comments of unhappy users. Taking this uncertainty into account, this paper studies the optimal intertemporal pricing strategies of a firm when selling to strategic customers in two periods where production cost in the second period randomly changes with the number of buyers in the first period. Our results suggest how firms should adjust their optimal pricing strategies under different market circumstances.

Transient analysis of M/M/1 queues in discrete time by general server vacations

1994 ◽  
Vol 31 (A) ◽  
pp. 115-129 ◽  
Author(s):  
W. Böhm ◽  
S. G. Mohanty
Keyword(s):  
Discrete Time ◽  
Continuous Time ◽  
Transient Analysis ◽  
Queueing System ◽  
Queueing Model ◽  
Discrete Parameter ◽  
Server Vacations ◽  
Special Case ◽  
Combinatorial Methods ◽  
Transient And Steady State

In this contribution we consider an M/M/1 queueing model with general server vacations. Transient and steady state analysis are carried out in discrete time by combinatorial methods. Using weak convergence of discrete-parameter Markov chains we also obtain formulas for the corresponding continuous-time queueing model. As a special case we discuss briefly a queueing system with a T-policy operating.

A discrete-time queueing system with optional LCFS discipline

2012 ◽  
Vol 202 (1) ◽  
pp. 3-17 ◽  
Author(s):  
I. Atencia ◽  
A. V. Pechinkin
Keyword(s):  
Discrete Time ◽  
Queueing System

scholarly journals Sojourn Times in A Queueing System with Breakdowns and General Retrial Times

Mathematics ◽  
2021 ◽  
Vol 9 (22) ◽  
pp. 2882
Author(s):  
Ivan Atencia ◽  
José Luis Galán-García
Keyword(s):  
Steady State ◽  
Discrete Time ◽  
Queueing System ◽  
Retrial Queue ◽  
Stochastic Decomposition ◽  
Discrete Time System ◽  
Main Research ◽  
Extensive Analysis ◽  
Complete Study ◽  
Number Of Customers

This paper centers on a discrete-time retrial queue where the server experiences breakdowns and repairs when arriving customers may opt to follow a discipline of a last-come, first-served (LCFS)-type or to join the orbit. We focused on the extensive analysis of the system, and we obtained the stationary distributions of the number of customers in the orbit and in the system by applying the generation function (GF). We provide the stochastic decomposition law and the application bounds for the proximity between the steady-state distributions for the queueing system under consideration and its corresponding standard system. We developed recursive formulae aimed at the calculation of the steady-state of the orbit and the system. We proved that our discrete-time system approximates M/G/1 with breakdowns and repairs. We analyzed the busy period of an auxiliary system, the objective of which was to study the customer’s delay. The stationary distribution of a customer’s sojourn in the orbit and in the system was the object of a thorough and complete study. Finally, we provide numerical examples that outline the effect of the parameters on several performance characteristics and a conclusions section resuming the main research contributions of the paper.

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