Volume discount strategies for the provider selection problem in telecommunications under uncertainty

Network providers and bandwidth brokers offer a variety of pricing policies based on differentiated quality-of-service (QoS) levels and volume discount schemes. In this paper, a cost minimization problem under various volume discount policies offered during the bandwidth allocation is formulated and solved via a heuristic algorithm. The proposed heuristic algorithm is based on fuzzy set theory. It has the capability of solving complex bandwidth provider selection and task allocation problems in telecommunications by considering a variety of volume discount policies offered by providers. The efficacy of the algorithm is tested under various scenarios to find the optimal strategies for firms and to explore the suitability of the proposed approach.