Pricing computer services: queueing effects
Communications of the ACM
Optimal incentive-compatible priority pricing for the M/M/1 queue
Operations Research
User delay costs and internal pricing for a service facility
Management Science
On manufacturing/marketing incentives
Management Science
Processor-shared buffers with reneging
Performance Evaluation - Special issue on bandwidth management and congestion control of high-speed networks
Improving Service by Informing Customers About Anticipated Delays
Management Science
Waiting Time Distributions for Processor-Sharing Systems
Journal of the ACM (JACM)
The Distribution of Queuing Network States at Input and Output Instants
Journal of the ACM (JACM)
Global Information Technology Outsourcing: In Search of Business Advantage
Global Information Technology Outsourcing: In Search of Business Advantage
Optimal Processing Policies for an e-Commerce Web Server
INFORMS Journal on Computing
Integrated capacity and marketing incentive contracting for capital-intensive service systems
Decision Support Systems
Advertising Strategies in Electronic Retailing: A Differential Games Approach
Information Systems Research
Research Note---Performance-Based Advertising: Advertising as Signals of Product Quality
Information Systems Research
Capacity planning and performance contracting for service facilities
Decision Support Systems
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This study examines coordination issues that occur in allocating spending between advertising and information technology (IT) in electronic retailing. Electronic retailers run the risk of overspending on advertising to attract customers but underspending on IT, thus resulting in inadequate processing capacity at the firm's website. In this paper, we present a centralized, joint marketing-IT model to optimally allocate spending between advertising and IT, and we discuss an uncoordinated case where marketing and IT make suboptimal advertising and capacity decisions. We show how these decisions can be coordinated either by reducing the value of a customer session or by designing an optimal processing contract between marketing and IT. Both the coordination methods can be implemented with only local knowledge of the IT function, yet they generate a solution that almost matches the quality of the centralized solution. We extend our basic model to consider demand uncertainty, lagged advertising effects, and uncertainties in the lead time to acquire IT capacity. With demand uncertainty, electronic retailers should reduce spending on advertising and increase IT capacity if there is potential for a demand upswing and the cost of IT capacity is relatively low. The value of a customer session should be further reduced when uncertainties exist. This is required to share the risk of excess or inadequate IT capacity.