Revenue management model for on-demand IT services

Tieming Liu, Chinnatat Methapatara and Laura Wynter

European Journal of Operational Research, 2010, vol. 207, issue 1, 401-408

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: Revenue; management; On-demand; IT; service; Multinomial; Logit; model (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:207:y:2010:i:1:p:401-408

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