Equation 12 · AI Inference Economics in Practice: An Advanced Technical Guide
What does this equation mean?
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the reserved capacity’s price per hour. Read the equation part by part below; each part has a contextual explanation and a link to its mathematical background.
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subscript
The lower label selects a particular version, component, or indexed member of the quantity. For example, x₀ and xₜ can be values at different positions.
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What the article says around this equation
The arithmetic is simple once both prices are in hand, and generalizes across any reserved-capacity product structured this way. Let be the reserved capacity’s price per hour, the maximum throughput it sustains per hour at full utilization, and the effective on-demand cost of the equivalent work. At actual utilization u , the effective cost per unit under reservation is / (u \, ) , and reservation wins exactly when
Sources cited in the article section
- [11] Increase Model Invocation Capacity with Provisioned Throughput in Amazon Bedrock ↗
- [17] Optimization and Tuning ↗
- [15] Mooncake: A KVCache-centric Disaggregated Architecture for LLM Serving ↗
These citations give research context. Read each source to check which claims it supports.
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