PRICING MODELS FOR ADMISSION IN SERVICE SYSTEMS

"Since service is an economic good, imposing an admission price often provides an e–cient means for matching supply and demand. On the other hand an important dimension of providing a service is the time the customer has to wait, especially in situations where the time of delivery is the single factor apart from price that determines whether the customer will do business with the flrm. These issues arise in a variety of situations in practice, ranging from manufacturing, to pure service systems, telecommunications, call centers and high bandwidth lines for data transfer. and posting different prices for each server as an alternative to increase exibility and imitate a system with the ability to price discriminate. We derive optimal pricing policies for such systems, with constant capacity and one or two servers, that are used to provide service to two classes of customers. It is typical in this line of research to assume that, up on arrival to the system the customer is given the opportunity to select the mode of service and the corresponding price without any restrictions, and, in many cases, is informed about the level of congestion in the system before he makes this selection"