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TITLE: Dynamic Pricing to Control Loss Systems with Quality of Service Targets
SPEAKER: William A. Massey
ABSTRACT:
Consider a real time service where arriving customers make
their decision to join the system based on both the
availability of resources and the current service price. Given
a fixed number resources, the manager can use price as a mechanism
to control the utilization of the system. A manager goal
is to find a pricing policy that maximizes total revenue
while meeting the quality of service targets (i.e. the probability
of congestion) desired by the customers.
Using variational calculus techniques, we solve the dynamic
optimal control problem that results by approximating a
dynamic rate, multi-server loss model as one with a
constrained offered load . We do this by using customer demand
forecasts to anticipate future service blocking and then
implement a congestion pricing algorithm.
This is joint work with Robert C. Hampshire of
Carnegie Mellon University and Qiong Wang of Bell Labs.
Bio:
Dr. William A. Massey is Edwin S.
Wilsey Professor of Operations Research and Financial
Engineering at Princeton University.
He received his PhD in 1981 from Stanford University. Prior to
joining Princeton University, Bill has been a member of technical
staff
in the Mathematical Sciences Research Center at Bell Laboratories.
His research interests include
Queueing Theory, Applied Probability, Stochastic Processes,
Special
Functions, and the Performance Modelling of Telecommunication
Systems. He has published 50 papers in areas such as nonstationary
queues, stochastic ordering, queueing networks, database theory,
and wireless communications.
