2001 · 186 citations · 18 references
BusinessBusiness EconomicsQueuing TheoryRevenue ManagementService OperationsNetwork Revenue ManagementQueueing AnalysisQueueing NetworksQueueing SystemsQueueing TheoryRevenue OptimizationFixed-point IterationObjective Function FormulationObjective Function SpecificationQueueing Theory OptimizationQueueing-based Cost ModelingService Revenue ManagementService-level Agreement Cost OptimizationService-level Agreements
We present a methodology for maximizing profits in a general class of e-commerce environments. The cost model is based on revenues that are generated when Quality-of-Service (QoS) guarantees are satisfied and on penalties that are incurred otherwise. The corresponding QoS criteria are derived from multiclass Service-Level-Agreements (SLAs) between service providers and their clients, which include the tail distributions of the per-class delays in addition to more standard QoS metrics such as throughput and mean delays. Our approach consists of formulating the optimization problem as a network flow model with a separable set of concave objective functions based on queueing-theoretic formulas, where the SLA classes are taken into account in both the constraints and the objective function. This problem is then solved via a fixed-point iteration. Numerous experiments illustrate the benefits of our approach.
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Reversibility and Stochastic Networks
Joel E. Cohen, F. P. Kelly · Technometrics · 1981 · 2.3K citations
Discrete Optimization Via Marginal Analysis
Bennett L. Fox · Management Science · 1966 · 385 citations