A tandem queueing system with applications to pricing strategy | Zendy

WaiKi Ching | Zendy; Lixin Tang | Zendy; Sin-Man Choi | Zendy; Issic K. C. Leung | Zendy

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A tandem queueing system with applications to pricing strategy

Author(s) -

WaiKi Ching,

Lixin Tang,

Sin-Man Choi,

Issic K. C. Leung

Publication year - 2008

Publication title -

journal of industrial and management optimization

Language(s) - English

Resource type - Journals

eISSN - 1553-166X

pISSN - 1547-5816

DOI - 10.3934/jimo.2009.5.103

Subject(s) - computer science , queueing theory , tandem , queue , mathematical optimization , layered queueing network , queueing system , server , markov process , bulk queue , operations research , computer network , mathematics , statistics , materials science , composite material

In this paper, we analyze a Markovian queueing system with multiple types of customers and two queues in tandem. All customers have to go through two stages of services. In Stage 1, the queueing system has multiple identical servers while in Stage 2, there is one single-server queue for each type of customers. The queueing discipline in the whole system is Blocked Customer Delayed (BCD). We first obtain the steady-state probability distribution of the queueing system and the expected waiting time for customers. We then apply the queueing model to solve an optimal pricing policy problem in assuming that the demand rate is dependent on the price. The objective is to minimize the number of servers in the first stage and also maximize the expected earnings by taking into account the demand and the prices. We also obtained some analytic results for the optimal pricing strategy.link_to_subscribed_fulltex

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