Abstract

An internet service provider (ISPs) normally purchases a bandwidth from a vendor and allocates it to different services. The primary concern is to maintain a quality service and, at the same time, maximize the profitability. This paper presents a mathematical model to find the optimal pricing strategy for an internet service provider when the primary concern on many pricing strategies is the absence of historical data for services which makes it difficult to provide a good estimate on the necessary pricing information such as price elasticity and the parameters are taken as a triangular fuzzy numbers. This paper presents a mathematical model to find the optimal pricing strategy in the fuzzy environment. The resulted problem is formulated as a general form of possibilistic geometric programming (PGP). The implementation of the proposed method is demonstrated via a case study on an ISP in Iran.

Key words: Revenue management, pricing, geometric programming, fuzzy programming, internet service provider.