A tandem queuing system with applications to pricing strategy

Wai Ki CHING, Sin Man CHOI, Tang LI, Kui Chiu Issic LEUNG

Research output: Contribution to journalArticles

6 Citations (Scopus)

Abstract

In this paper, we analyze a Markovian queueing system with multiple types of customers and two queues in tandem. All customers have to go through two stages of services. In Stage 1, the queueing system has multiple identical servers while in Stage 2, there is one single-server queue for each type of customers. The queueing discipline in the whole system is Blocked Customer Delayed (BCD). We first obtain the steady-state probability distribution of the queueing system and the expected waiting time for customers. We then apply the queueing model to solve an optimal pricing policy problem in assuming that the demand rate is dependent on the price. The objective is to minimize the number of servers in the first stage and also maximize the expected earnings by taking into account the demand and the prices. We also obtained some analytic results for the optimal pricing strategy. Copyright © 2009 American Institute of Mathematical Science.
Original languageEnglish
Pages (from-to)103-114
JournalJournal of Industrial and Management Optimization
Volume5
Issue number1
DOIs
Publication statusPublished - Feb 2009

Citation

Ching, W.-K., Choi, S.-M., Li, T., & Leung, I. K. C. (2009). A tandem queuing system with applications to pricing strategy. Journal of Industrial and Management Optimization, 5(1), 103-114.

Keywords

  • Queueing systems
  • Queues in tandem
  • Optimization
  • Demand

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