Stochastic Modeling of Internet Service for Profit Optimization in Uganda
Date
2018
Journal Title
Journal ISSN
Volume Title
Publisher
IST-Africa
Abstract
We consider an internet cafe faced with an optimal choice of bandwidth
for internet users under stochastic stationary demand. The choice is made over
uniformly time horizons with a goal of optimizing profits. Considering customer
demand, price and operating costs of internet service, we formulate a finite state
Markov decision process model where states of a Markov chain represent possible
states of demand for internet service. A profit matrix is generated; representing the
long run measure of performance for the Markov decision process problem. The
problem is to determine an optimal bandwidth adjustment policy so that the long run
profits are maximized for a given state of demand. The bandwidth adjustment
policies are determined using dynamic programming over a finite period planning
horizon. Results from a case study demonstrate the existence of an optimal statedependent
option for bandwidth adjustment and profits in providing internet service.
Description
Keywords
Bandwidth adjustment; internet service; modelling; profit optimization; stochastic demand