Conference Paper

A Real-Time Yield Management Framework for E-Services

IBM TJ Watson Res. Center, Hawthorne, NY
DOI: 10.1109/CEC-EEE.2006.8 Conference: E-Commerce Technology, 2006. The 8th IEEE International Conference on and Enterprise Computing, E-Commerce, and E-Services, The 3rd IEEE International Conference on
Source: IEEE Xplore


Yield management for e-services is an exciting extension of the traditional yield management techniques employed in hotel and airline industry. We propose a framework for realtime yield management of e-services. The framework employs demand forecasting, yield management and customer behavior monitoring modules. Yield management is used to optimize resource allocation with market segmentation in prices. In e-services an important service measure is the perceived delay. We use queueing theory to model the dependence of the perceived delay on the demand and providers' capacity. Using numerical examples we show the gain in revenue that can be realised by firms in different types of markets with different buying power of customers

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    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. Published by Elsevier B.V.
    No preview · Article · Nov 2010 · European Journal of Operational Research