2023 article

An Online Learning Approach to Dynamic Pricing and Capacity Sizing in Service Systems

Chen, X., Liu, Y., & Hong, G. (2023, June 12). OPERATIONS RESEARCH.

author keywords: online learning in queues; service systems; capacity planning; staffing; pricing in service systems
Source: Web Of Science
Added: July 3, 2023

Online Learning in Queueing Systems Most queueing models have no analytic solutions, so previous research often resorts to heavy-traffic analysis for performance analysis and optimization, which requires the system scale (e.g., arrival and service rate) to grow to infinity. In “An Online Learning Approach to Dynamic Pricing and Capacity Sizing in Service Systems,” X. Chen, Y. Liu, and G. Hong develop a new “scale-free” online learning framework designed for optimizing a queueing system, called gradient-based online learning in queue (GOLiQ). GOLiQ prescribes an efficient procedure to obtain improved decisions in successive cycles using newly collected queueing data (e.g., arrival counts, waiting times, and busy times). Besides its robustness in the system scale, GOLiQ is advantageous when focusing on performance optimization in the long run because its data-driven nature enables it to constantly produce improved solutions which will eventually reach optimality. Effectiveness of GOLiQ is substantiated by theoretical regret analysis (with a logarithmic regret bound) and simulation experiments.