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• W2154473580 abstract "We study a service facility in which the system manager dynamically controls the arrival and service rates to maximize the long-run average value generated. We initially consider a rate-setting problem where the service facility is modeled as an M/M/1 queue with adjustable arrival and service rates and solve this problem explicitly. Next, we use this solution to study a price-setting problem, where customers are utility maximizing and price- and delay-sensitive, and the system manager chooses state-dependent service rates and prices. We find that the optimal arrival rate is decreasing and the optimal service rate is increasing in the number of customers in the system; however, the optimal price need not be monotone. We also show that under the optimal policy, the service facility operates as one with a finite buffer. Finally, we study a numerical example to compare the social welfare achieved using a dynamic policy to that achieved using static policies and show the dynamic policy offers significant welfare gains." @default.
• W2154473580 created "2016-06-24" @default.
• W2154473580 creator A5029328662 @default.
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• W2154473580 date "2006-11-01" @default.
• W2154473580 modified "2023-09-30" @default.
• W2154473580 title "Dynamic Control of an M/M/1 Service System with Adjustable Arrival and Service Rates" @default.
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• W2154473580 doi "https://doi.org/10.1287/mnsc.1060.0587" @default.
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