We consider the problem of packet scheduling in single-hop queueing networks, and analyze the impact of heavy-tailed traffic on the performance of Max-Weight scheduling. As a performance metric we use the delay stability of traffic flows: a traffic flow is delay stable if its expected steady-state delay is finite, and delay unstable otherwise. First, we show that a heavy-tailed traffic flow is delay unstable under any scheduling policy. Then, we focus on the celebrated Max-Weight scheduling policy, and show that a light-tailed flow that conflicts with a heavytailed flow is also delay unstable. This is true irrespective of the rate or the tail distribution of the light-tailed flow, or other scheduling constraints in the network. Surprisingly, we show that a light-tailed flow can be delay unstable, even when it does not conflict with heavy-tailed traffic. Furthermore, delay stability in this case may depend on the rate of the light-tailed flow.Finally, we turn our attention to the class of Max-Weight-α scheduling policies; we show that if the α-parameters are chosen suitably, then the sum of the α-moments of the steady-state queue lengths is finite. We provide an explicit upper bound for the latter quantity, from which we derive results related to the delay stability of traffic flows, and the scaling of moments of steady-state queue lengths with traffic intensity.

Risk pooling has been studied extensively in the operations management literature as the basic driver behind strategies such as transshipment, manufacturing flexibility, component commonality, and drop-shipping. This paper explores the benefit of risk pooling in the context of inventory management using the canonical model first studied in Eppen (1979). Specifically, we consider a single-period multi-location newsvendor model, where n different locations face independent and identically distributed demands and linear holding and backorder costs. We show that Eppen's celebrated result, i.e., that the expected cost savings from centralized inventory management scale with the square root of the number of locations, depends critically on the "light-tailed" nature of the demand uncertainty. In particular, we establish that the benefit from pooling relative to the decentralized case, in terms of both expected cost and safety stock, is equal to n α−1 α for a class of heavy-tailed demand distributions (stable distributions), whose power-law asymptotic decay rate is determined by the parameter α ∈ (1, 2). Thus, the benefit from pooling under heavy-tailed demand uncertainty can be significantly lower than √ n, which is predicted for normally distributed demands. We discuss the implications of this result on the performance of periodic-review policies in multi-period inventory management, as well as for the profits associated with drop-shipping fulfilment strategies. Corroborated by an extensive simulation analysis with heavy-tailed distributions that arise frequently in practice, such as power-law and log-normal, our findings highlight the importance of taking into account the shape of the tail of demand uncertainty when considering a risk pooling initiative.

Abstract-In the first part of the paper, we study the impact of scheduling, in a setting of parallel queues with a mix of heavy-tailed and light-tailed traffic. We analyze queue-length unaware scheduling policies, such as round-robin, randomized, and priority, and characterize their performance. We prove the queue-length instability of Max-Weight scheduling, in the presence of heavy-tailed traffic. Motivated by this, we analyze the performance of Max-Weight-α scheduling, and establish conditions on the α-parameters, under which the system is queue-length stable. We also introduce the Max-Weight-log policy, which provides performance guarantees, without any knowledge of the arriving traffic. In the second part of the paper, we extend the results on Max-Weight and Max-Weight-α scheduling to a single-hop network, with arbitrary topology and scheduling constraints.

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