MDP based optimal pricing for a cloud computing queueing model

We study the optimization of dynamic pricing in a queueing model with a finite buffer, where arrival rates depend on advertised price levels. We apply our study to a pricing policy in a cloud computing service provider setup. The main result of this paper is the multi-threshold structure of the opti...

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Bibliographic Details
Published in:Performance evaluation 2014-08, Vol.78, p.1-6
Main Authors: Atar, Rami, Cidon, Israel, Shifrin, Mark
Format: Article
Language:English
Subjects:
Buffers
Cloud computing
Dynamic tests
Mathematical analysis
MDP
Optimal pricing
Optimization
Policies
Price-based revenue management
Pricing
Queues
Threshold policy
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Description
Summary:We study the optimization of dynamic pricing in a queueing model with a finite buffer, where arrival rates depend on advertised price levels. We apply our study to a pricing policy in a cloud computing service provider setup. The main result of this paper is the multi-threshold structure of the optimal policy.
ISSN:0166-5316
1872-745X
DOI:10.1016/j.peva.2014.05.001