Dynamic pricing

About: Dynamic pricing is a research topic. Over the lifetime, 4144 publications have been published within this topic receiving 91390 citations. The topic is also known as: surge pricing & demand pricing.

Dynamic Pricing and Traffic Engineering for Timely Inter-Datacenter Transfers

Abstract: Neither traffic engineering nor fixed prices (e.g., \$/GB) alone fully address the challenges of highly utilized inter-datacenter WANs. The former offers more service to users who overstate their demands and poor service overall. The latter offers no service guarantees to customers, and providers have no lever to steer customer demand to lightly loaded paths/times. To address these issues, we design and evaluate Pretium -- a framework that combines dynamic pricing with traffic engineering for inter-datacenter bandwidth. In Pretium, users specify their required rates or transfer sizes with deadlines, and a price module generates a price quote for different guarantees (promises) on these requests. The price quote is generated using internal prices (which can vary over time and links) which are maintained and periodically updated by Pretium based on history. A supplementary schedule adjustment module gears the agreed-upon network transfers towards an efficient operating point by optimizing time-varying operation costs. Experiments using traces from a large production WAN show that Pretium improves total system efficiency (value of routed transfers minus operation costs) by more than 3.5X relative to current usage-based pricing schemes, while increasing the provider profits by 2X.

TECHNICAL NOTE---Optimal Product Acquisition, Pricing, and Inventory Management for Systems with Remanufacturing

Abstract: Acquisition of used products (cores) is central to the success of remanufacturing programs for companies. At the same time, dynamic pricing strategies have been adopted in various industries to better balance supply and customer demand. In this paper, we study the integration of these two aspects of operations together with inventory management for a production/remanufacturing firm. We develop a periodic-review single-product inventory system with price-dependent customer demand. The product return in each period is random but can be actively controlled by the firm's acquisition effort. The firm aims to maximize its total discounted profit over a finite planning horizon by implementing optimal production, remanufacturing, product acquisition, and pricing strategies. We first show that with an exogenous selling price, the optimal production-remanufacturing-disposal policy is simple and characterized by three state-independent parameters. The optimal acquisition effort is decreasing in the aggregate inventory level of serviceable product and cores. Nevertheless, when pricing is an endogenous decision, we find that the optimal policy becomes much more complicated, and its control parameters are state dependent. The optimal selling price is decreasing, whereas the optimal acquisition effort is increasing in the serviceable product inventory level, and both decisions decrease with the aggregate inventory level.