Publication Type
Journal Article
Version
publishedVersion
Publication Date
11-2010
Abstract
This paper presents a model for applying revenue management to on-demand IT services. The multinomial logit model is used to describe customer choice over multiple classes with different service-level agreements (SLAs). A nonlinear programming model is provided to determine the optimal price or service level for each class. Through a numerical analysis, we examine the impacts of system capacity and customer waiting incentives on the service provider’s profit and pricing strategies.
Keywords
IT service, Logit model, Multinomial, On-demand, Revenue management
Discipline
Computer Sciences | Management Information Systems
Research Areas
Intelligent Systems and Optimization
Areas of Excellence
Digital transformation
Publication
European Journal of Operational Research
Volume
207
Issue
1
First Page
401
Last Page
408
ISSN
0377-2217
Identifier
10.1016/j.ejor.2010.04.024
Publisher
Elsevier
Citation
LIU, Tieming; METHAPATARA, Chinnatat; and WYNTER, Laura.
Revenue management model for on-demand IT services. (2010). European Journal of Operational Research. 207, (1), 401-408.
Available at: https://ink.library.smu.edu.sg/sis_research/10248
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.ejor.2010.04.024