A pricing method for elastic services that guarantees the GoS in a scenario of evolutionary demand

Abstract

Service Providers (SPs), which offer services based on elastic reservations with a guaranteed Grade of Service (GoS), should be interested in knowing how to price these services, i.e. service-i-, how to calculate the associated benefits to this service or, how to know the time until which the price for service-i-could be maintained, when an evolutionary function of the aggregate demand considered is involved and the established GoS for the elastic service is guaranteed. Thus this paper proposes a method that price elastic services (or elastic reservations) with guaranteed GoS in a scenario of evolutionary function of the aggregate demand. The method obtains: first at all, the average rate of the accepted elastic reservations of class-i with guaranteed GoS. Second, according to the accepted reservations, calculates the price that maximizes the selected revenue function. The considered aggregate demand function depends not only on a demand modulation factor, the mean reserved bandwidth, Bres,i, but on the evolution of this aggregate demand function, according to a Bass diffusion model. Third, in a scenario where not plenty access bandwidth Bi is available, evaluates the optimum value of the elasticity of the reservations that maximizes the revenue function for the obtained price. Finally, it is forecasted the time until the SP does not need to change the price or elasticity calculated when the demand increases and the GoS is guaranteed. The paper applies the method to a class-i- of elastic reservations, analyzes the influence of each one of the parameters and could be extended to multiple classes of independent and guaranteed elastic services.