Pricing computer services: queueing effects
Communications of the ACM
Matrix analysis
Optimal control theory with economic applications
Optimal control theory with economic applications
Optimal incentive-compatible priority pricing for the M/M/1 queue
Operations Research
Dynamic scheduling of a multiclass fluid network
Operations Research
Dynamic Programming and Optimal Control, Two Volume Set
Dynamic Programming and Optimal Control, Two Volume Set
Sequencing and Routing in Multiclass Queueing Networks Part I: Feedback Regulation
SIAM Journal on Control and Optimization
Revenue Management: Research Overview and Prospects
Transportation Science
Combined Pricing and Inventory Control Under Uncertainty
Operations Research
Commissioned Paper: An Overview of Pricing Models for Revenue Management
Manufacturing & Service Operations Management
Strategically Seeking Service: How Competition Can Generate Poisson Arrivals
Manufacturing & Service Operations Management
Mathematics of Operations Research
Dynamic Pricing and the Direct-to-Customer Model in the Automotive Industry
Electronic Commerce Research
Dynamic Pricing Strategies for Multiproduct Revenue Management Problems
Manufacturing & Service Operations Management
Optimal Control of a High-Volume Assemble-to-Order System
Mathematics of Operations Research
Dynamic Pricing Strategies for Multiproduct Revenue Management Problems
Manufacturing & Service Operations Management
Controlled jump Markov processes with local transitions and their fluid approximation
WSEAS Transactions on Systems and Control
Dynamic pricing and scheduling in a multi-class single-server queueing system
Queueing Systems: Theory and Applications
Admission control and pricing in a queue with batch arrivals
Operations Research Letters
Queueing Systems: Theory and Applications
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Motivated by the recent adoption of tactical pricing strategies in manufacturing settings, this paper studies a problem of dynamic pricing for a multiproduct make-to-order system. Specifically, for a multiclass Mn/M/1 queue with controllable arrival rates, general demand curves, and linear holding costs, we study the problem of maximizing the expected revenues minus holding costs by selecting a pair of dynamic pricing and sequencing policies. Using a deterministic and continuous (fluid model) relaxation of this problem, which can be justified asymptotically as the capacity and the potential demand grow large, we show the following: (i) greedy sequencing (i.e., the cμ-rule) is optimal, (ii) the optimal pricing and sequencing decisions decouple in finite time, after which (iii) the system evolution and thus the optimal prices depend only on the total workload. Building on (i)--(iii), we propose a one-dimensional workload relaxation to the fluid pricing problem that is simpler to analyze, and leads to intuitive and implementable pricing heuristics. Numerical results illustrate the near-optimal performance of the fluid heuristics and the benefits from dynamic pricing.