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Journal : International Journal of Electrical and Computer Engineering

Mixed integer nonlinear programming (MINLP)-based bandwidth utility function on internet pricing scheme with monitoring and marginal cost Robinson Sitepu; Fitri Maya Puspita; Elika Kurniadi; Yunita Yunita; Shintya Apriliyani
International Journal of Electrical and Computer Engineering (IJECE) Vol 9, No 2: April 2019
Publisher : Institute of Advanced Engineering and Science

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (475.864 KB) | DOI: 10.11591/ijece.v9i2.pp1240-1248

Abstract

The development of the internet in this era of globalization has increased fast. The need for internet becomes unlimited. Utility functions as one of measurements in internet usage, were usually associated with a level of satisfaction of users for the use of information services used. There are three internet pricing schemes used, that are flat fee, usage based and two-part tariff schemes by using one of the utility function which is Bandwidth Diminished with Increasing Bandwidth with monitoring cost and marginal cost. Internet pricing scheme will be solved by LINGO 13.0 in form of non-linear optimization problems to get optimal solution. The optimal solution is obtained using the either usage-based pricing scheme model or two-part tariff pricing scheme model for each services offered, if the comparison is with flat-fee pricing scheme. It is the best way for provider to offer network based on usage based scheme. The results show that by applying two part tariff scheme, the providers can maximize its revenue either for homogeneous or heterogeneous consumers.
Utility Function-based Pricing Strategies in Maximizing the Information Service Provider’s Revenue with Marginal and Monitoring Costs Robinson Sitepu; Fitri Maya Puspita; Anggi Nurul Pratiwi; Icha Puspita Novyasti
International Journal of Electrical and Computer Engineering (IJECE) Vol 7, No 2: April 2017
Publisher : Institute of Advanced Engineering and Science

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (646.013 KB) | DOI: 10.11591/ijece.v7i2.pp877-887

Abstract

Previous research only focus on maximizing revenue for pricing strategies for information good with regardless the marginal and monitoring costs. This paper aims to focus on the addition of marginal and monitoring costs into the pricing strategies to maintain the maximal revenue while introduce the costs incurred in adopting the strategies. The well-known utility functions applied to also consider the consumer’s satisfaction towards the service offered. The results show that the addition costs incurred for setting up the strategies can also increase the profit for the providers rather than neglecting the costs. It is also showed that the Cobb-Douglas utility functions used can enhance the notion of provider to optimize the revenue compared to quasi linear and perfect substitutes.