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Analysis of Economics of Computer Backup Service

Marshall FREIMER, Ushio SUMITA, Hsing K. CHENG

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Summary :

An organization may suffer large losses if its computer service is interrupted. For protection, it can purchase computer backup service from the outside market which temporarily provides service replacement from a central facility. A dynamic probabilistic model is developed which describes such a computer backup service system. The parties involved have conflicting motivations. The supplier is interested in optimizing his expected profits subject to a given set of parameters while the subscriber will evaluate the service contract to his own best interest. This paper analyzes how the economic interests of the supplier and subscribers interact based on a dynamic reliability analysis of their respective computer systems. Assuming all physical parameters fixed, the supplier's optimal value in terms of economic parameters is determined. An algorithmic procedure is developed for computing such values. Some numerical examples are presented in order to gain insights into the system.

Publication
IEICE TRANSACTIONS on Communications Vol.E75-B No.5 pp.385-400
Publication Date
1992/05/25
Publicized
Online ISSN
DOI
Type of Manuscript
PAPER
Category
Switching and Communication Processing

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