• Corpus ID: 221516154

An online learning approach to dynamic pricing and capacity sizing in service systems

@article{Chen2020AnOL,
  title={An online learning approach to dynamic pricing and capacity sizing in service systems},
  author={Xinyun Chen and Yunan Liu and Guiyu Hong},
  journal={arXiv: Probability},
  year={2020}
}
We study a dynamic pricing and capacity sizing problem in a GI/GI/1 queue, where the service provider's objective is to obtain the optimal service fee $p$ and service capacity $\mu$ so as to maximize cumulative expected profit (the service revenue minus the staffing cost and delay penalty). Due to the complex nature of the queueing dynamics, such a problem has no analytic solution so that previous research often resorts to heavy-traffic analysis in that both the arrival rate and service rate… 
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