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Pricing of reusable resources under ambiguous distributions of demand and service time with emerging applications
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Doan, Xuan Vinh, Lei, Xiao and Shen, Siqian (2019) Pricing of reusable resources under ambiguous distributions of demand and service time with emerging applications. European Journal of Operational Research . doi:10.1016/j.ejor.2019.09.003 (In Press)
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WRAP-pricing-reusable-resources-under-ambiguous-distributions-demand-service-time-emerging-applications-Doan-2019.pdf - Accepted Version Embargoed item. Restricted access to Repository staff only until 5 September 2021. Contact author directly, specifying your specific needs. - Requires a PDF viewer. Download (1037Kb) |
Official URL: https://doi.org/10.1016/j.ejor.2019.09.003
Abstract
Monopolistic pricing models for revenue management are widely used in practice to set prices of multiple products with uncertain demand arrivals. The literature often assumes deterministic time of serving each demand and that the distribution of uncertainty is fully known. In this paper, we consider a new class of revenue management problems inspired by emerging applications such as cloud computing and city parking, where we dynamically determine prices for multiple products sharing limited resource and aim to maximize the expected revenue over a finite horizon. Random demand of each product arrives in each period, modeled by a function of the arrival time, product type, and price. Unlike the traditional monopolistic pricing, here each demand stays in the system for uncertain time. Both demand and service time follow ambiguous distributions, and we formulate robust deterministic approximation models to construct efficient heuristic fixed-price pricing policies. We conduct numerical studies by testing cloud computing service pricing instances based on data published by the Amazon Web Services (AWS) and demonstrate the efficacy of our approach for managing revenue and risk under various distributions of demand and service time.
| Item Type: | Journal Article | ||||||
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| Divisions: | Faculty of Social Sciences > Warwick Business School > Operational Research & Management Sciences Faculty of Social Sciences > Warwick Business School |
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| Journal or Publication Title: | European Journal of Operational Research | ||||||
| Publisher: | Elsevier Science BV | ||||||
| ISSN: | 0377-2217 | ||||||
| Official Date: | 5 September 2019 | ||||||
| Dates: |
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| Date of first compliant deposit: | 2 September 2019 | ||||||
| DOI: | 10.1016/j.ejor.2019.09.003 | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | In Press | ||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||
| Related URLs: |
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