The optimal pricing model in an uncertain and competitive environment: using possibilitic geometric programming approach

摘要

Providing internet to the customers is a huge and highly competitive market. Offering internet with a competitive price and high level of quality to the customers is a challenging issue to all server-owners at large. Internet providers usually have a limited bandwidth which should try to allocate it to different services as such to maximize profitability. As a result, they should care about several factors such as the amount of bandwidth allocated to each service, amount of marketing expenditure, selling price, level of system's reliability, and so forth. On the other hand, presence of uncertainty makes it almost impossible to achieve a good estimation on the model's key parameters such as price elasticity. Therefore, in this study, we present the outcome of our investigations as a mathematical model to maximize the profit of a server-owner in an uncertain and competitive environment. The uncertain parameters are taken as a triangular fuzzy numbers. The resulted problem is modeled as a general form of Possibilistic Geometric Programming (PGP). It is evident that the developed model is a highly nonlinear one. As a result, we use CVX to solve it optimally. Finally, the numerical analysis is applied for validation of the model.