Controlling the Variability of Capacity Allocations Using Service Deferrals

Ensuring predictability is a crucial goal for service systems. Traditionally, research has focused on designing systems that ensure predictable performance for service requests. Motivated by applications in cloud computing and electricity markets, this article focuses on a different form of predictability: predictable allocations of service capacity. The focus of the article is a new model where service capacity can be scaled dynamically and service deferrals (subject to deadline constraints) can be used to control the variability of the active service capacity. Four natural policies for the joint problem of scheduling and managing the active service capacity are considered. For each, the variability of service capacity and the likelihood of deadline misses are derived. Further, the paper illustrates how pricing can be used to provide incentives for jobs to reveal deadlines and thus enable the possibility of service deferral in systems where the flexibility of jobs is not known to the system a priori.