Provider selection and task allocation issues in networks with different QoS levels and all you can send pricing

Authors:
Nihat Kasap;Haldun Aytug;S. Selcuk Erenguc
Affiliations:
Faculty of Management, Sabanci University, Istanbul, Turkey;Decision and Information Sciences Department, The Warrington College of Business, University of Florida, Gainesville, FL 32611, United States;Decision and Information Sciences Department, The Warrington College of Business, University of Florida, Gainesville, FL 32611, United States
Venue:
Decision Support Systems
Year:
2007

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Abstract

We investigate an optimization problem a firm faces when acquiring network capacity from multiple providers. We define two types of tasks the firm performs using data networks, and show that the time, bandwidth and quality requirements of each type are quite different. We formulate the associated problem as a cost minimization problem subject to quality and capacity requirements and offer multiple solution approaches. We analyze how different prices, quality and task distribution affect the optimal behavior of the firm. We also implement Generalized Bender's Decomposition to solve a relaxation of this problem in order to obtain a tight lower bound.