Stochastic Capacity Acquisition and Allocation Model for Bandwidth Brokers under Fuzzy Volume Based Pricing Scheme

Hasan Hüseyin Turan, Nihat Kasap, Dursun Delen, Mehmet Nahit Serarslan

Research output: Contribution to journalArticle

Abstract

In this paper, bandwidth acquisition and allocation problem of a telecommunications Bandwidth Broker (BB) is analyzed under uncertain end-user capacity requests and pay-per-byte (volume) based pricing policy. Furthermore, related objective function coefficients such as revenue and costs are modeled as fuzzy numbers in order to cope with vague market conditions. By integrating fuzzy mathematical programming and two-stage stochastic programming techniques, deterministic equivalent of single objective profit maximization problem of BB is obtained solved to optimality. In addition, infrastructure related performance measures such as delay and jitter amounts in the network are modelled via stochastic parameters that obey some known probability distributions. Two performance statistics namely fuzzy Expected Value of Perfect Information (EVPI) and fuzzy Value of Stochastic Solution (VSS) are defined to demonstrate the efficiency of proposed methodology compared to deterministic approach. In addition, several secondary performance measures such as expected capacity utilization, expected demand fulfilment ratio and capacity loss are calculated under different problem settings. In conclusion, numerical experiments showed that fuzzy stochastic method provides more profit depending upon problem size in compression with deterministic strategy.

Original languageEnglish
Pages (from-to)227-244
Number of pages18
JournalInternational Journal of Computational Intelligence Systems
Volume9
Issue number2
DOIs
StatePublished - 3 Mar 2016
Externally publishedYes

Fingerprint

Pricing
Bandwidth
Profitability
Performance Measures
Profit
Stochastic programming
Costs
Fuzzy Expected Value
Fuzzy Mathematical Programming
Mathematical programming
Jitter
Probability distributions
Telecommunication
Stochastic Programming
Stochastic Methods
Fuzzy numbers
Telecommunications
Statistics
Model
Optimality

Keywords

  • bandwidth broker
  • fuzzy stochastic mathematical programming
  • fuzzy VSS and EVPI
  • Telecommunications market

Cite this

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title = "Stochastic Capacity Acquisition and Allocation Model for Bandwidth Brokers under Fuzzy Volume Based Pricing Scheme",
abstract = "In this paper, bandwidth acquisition and allocation problem of a telecommunications Bandwidth Broker (BB) is analyzed under uncertain end-user capacity requests and pay-per-byte (volume) based pricing policy. Furthermore, related objective function coefficients such as revenue and costs are modeled as fuzzy numbers in order to cope with vague market conditions. By integrating fuzzy mathematical programming and two-stage stochastic programming techniques, deterministic equivalent of single objective profit maximization problem of BB is obtained solved to optimality. In addition, infrastructure related performance measures such as delay and jitter amounts in the network are modelled via stochastic parameters that obey some known probability distributions. Two performance statistics namely fuzzy Expected Value of Perfect Information (EVPI) and fuzzy Value of Stochastic Solution (VSS) are defined to demonstrate the efficiency of proposed methodology compared to deterministic approach. In addition, several secondary performance measures such as expected capacity utilization, expected demand fulfilment ratio and capacity loss are calculated under different problem settings. In conclusion, numerical experiments showed that fuzzy stochastic method provides more profit depending upon problem size in compression with deterministic strategy.",
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Stochastic Capacity Acquisition and Allocation Model for Bandwidth Brokers under Fuzzy Volume Based Pricing Scheme. / Turan, Hasan Hüseyin; Kasap, Nihat; Delen, Dursun; Serarslan, Mehmet Nahit.

In: International Journal of Computational Intelligence Systems, Vol. 9, No. 2, 03.03.2016, p. 227-244.

Research output: Contribution to journalArticle

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