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Accuracy of Fluid Approximations for Queueing Systems with Congestion-Sensitive Demand and Implications for Capacity Sizing

17 Pages Posted: 24 Nov 2010 Last revised: 1 Nov 2012

Ramandeep S. Randhawa

University of Southern California

Date Written: August 15, 2011

Abstract

We study the accuracy of fluid approximations in single- and many-server queueing systems in which the arrival rate depends on the congestion in the system. If the potential demand rate exceeds the system's capacity, the fluid approximations are found to exhibit O(1)-accuracy --- their error does not increase with system size. These fluid approximations are used to solve two capacity sizing problems: minimizing total system cost and maximizing social welfare. We find that the solutions to both these problems exhibit interesting differences, and further that under some conditions, the fluid prescriptions exhibit o(1)-optimality, that is, their optimality gap is asymptotically zero.

Keywords: Limit theorems, fluid approximations, Order 1 accuracy, O(1)

Suggested Citation

Randhawa, Ramandeep S., Accuracy of Fluid Approximations for Queueing Systems with Congestion-Sensitive Demand and Implications for Capacity Sizing (August 15, 2011). Available at SSRN: https://ssrn.com/abstract=1713984 or http://dx.doi.org/10.2139/ssrn.1713984

Ramandeep S. Randhawa (Contact Author)

University of Southern California ( email )

Marshall School of Business
BRI 401, 3670 Trousdale Parkway
Los Angeles, CA 90089
United States

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