Cost-Based Optimization of Buffer Size in M/G/1/N Systems under Different Service-Time Distributions

An analytic cost model is presented for M/G/1/N queueing systems. It considers the cost of customer loss versus customer delays, by varying buffer size and processor speed. We find optimal (and near optimal) configurations for a wide variety of service-time distributions. The model can provide insight into when it is better to invest in increased processor speed than to supply more buffer space. It is seen that different distributions may need very different hardware for optimal performance, and that it may actually be better to reject customers.