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Article
Publication date: 12 September 2023

Mingzhen Song, Lingcheng Kong and Jiaping Xie

Rapidly increasing the proportion of installed wind power capacity with zero carbon emission characteristics will help adjust the energy structure and support the realization of…

Abstract

Purpose

Rapidly increasing the proportion of installed wind power capacity with zero carbon emission characteristics will help adjust the energy structure and support the realization of carbon neutrality targets. The intermittency of wind resources and fluctuations in electricity demand has exacerbated the contradiction between power supply and demand. The time-of-use pricing and supply-side allocation of energy storage power stations will help “peak shaving and valley filling” and reduce the gap between power supply and demand. To this end, this paper constructs a decision-making model for the capacity investment of energy storage power stations under time-of-use pricing, which is intended to provide a reference for scientific decision-making on electricity prices and energy storage power station capacity.

Design/methodology/approach

Based on the research framework of time-of-use pricing, this paper constructs a profit-maximizing electricity price and capacity investment decision model of energy storage power station for flat pricing and time-of-use pricing respectively. In the process, this study considers the dual uncertain scenarios of intermittency of wind resources and random fluctuations in power demand.

Findings

(1) Investment in energy storage power stations is the optimal decision. Time-of-use pricing will reduce the optimal capacity of the energy storage power station. (2) The optimal capacity of the energy storage power station and optimal electricity price are related to factors such as the intermittency of wind resources, the unit investment cost, the price sensitivities of the demand, the proportion of time-of-use pricing and the thermal power price. (3) The carbon emission level is affected by the intermittency of wind resources, price sensitivities of the demand and the proportion of time-of-use pricing. Incentive policies can always reduce carbon emission levels.

Originality/value

This paper creatively introduced the research framework of time-of-use pricing into the capacity decision-making of energy storage power stations, and considering the influence of wind power intermittentness and power demand fluctuations, constructed the capacity investment decision model of energy storage power stations under different pricing methods, and compared the impact of pricing methods on optimal energy storage power station capacity and carbon emissions.

Highlights

  1. Electricity pricing and capacity of energy storage power stations in an uncertain electricity market.

  2. Investment strategy of energy storage power stations on the supply side of wind power generators.

  3. Impact of pricing method on the investment decisions of energy storage power stations.

  4. Impact of pricing method, energy storage investment and incentive policies on carbon emissions.

  5. A two-stage wind power supply chain including energy storage power stations.

Electricity pricing and capacity of energy storage power stations in an uncertain electricity market.

Investment strategy of energy storage power stations on the supply side of wind power generators.

Impact of pricing method on the investment decisions of energy storage power stations.

Impact of pricing method, energy storage investment and incentive policies on carbon emissions.

A two-stage wind power supply chain including energy storage power stations.

Details

Industrial Management & Data Systems, vol. 123 no. 11
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 15 December 2023

Wanting Hu and Guangwei Deng

The purpose of this study is to provide an optimal joint strategy of multi-period pricing and sales effort for a retailer with a logit choice demand in an integrated channel.

48

Abstract

Purpose

The purpose of this study is to provide an optimal joint strategy of multi-period pricing and sales effort for a retailer with a logit choice demand in an integrated channel.

Design/methodology/approach

Customer demand is characterized by a logit choice model, it varies over time and is influenced by price and sales effort. The multi-period decision model for the retailer is constructed using a discrete-time dynamic programming method to determine the optimal price and sales effort in each period.

Findings

When the inventory level does not exceed a certain threshold, decreasing price and increasing sales effort over time or as inventory level increases are the optimal strategies. However, once the inventory level exceeds the threshold, the optimal strategy is to maintain both price and sales effort constant as the inventory level changes or to increase price and decrease sales effort over time. Additionally, the greater the influence of sales effort on demand or the higher the arrival rate of customers, the higher the optimal price and the greater the optimal sales effort level.

Originality/value

This study contributes to the existing research on dynamic pricing and sales effort in integrated channels by incorporating a logit choice model. Furthermore, it provides valuable management insights for retailers operating in an integrated channel to make pricing and sales effort decisions based on inventory level and time period.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 15 July 2020

Xiaoping Xu, Guowei Dou and Yugang Yu

Considering the cross-market network externality, this paper aims to explore the platform’s pricing decisions and its optimal profit under the given government investment, and…

Abstract

Purpose

Considering the cross-market network externality, this paper aims to explore the platform’s pricing decisions and its optimal profit under the given government investment, and then investigate the investment decision to improve social responsibility, which is measured by the social welfare.

Design/methodology/approach

When exploring the optimal pricing decisions under the given government investment, extreme value theory and sensitive analysis are used. When investigating the investment level, game theory and optimization method are used. Numerical examples are conducted to further illustrate the results.

Findings

First, after considering the government investment, whether the buyers and the sellers are charged depends on the investment level and the difference of the cross-market network externality (CNC) of the sellers and the buyers. Second, the optimal price on the sellers is decreasing (increasing) in the CNC of the buyers (sellers). The optimal price on the buyers is significantly affected by the investment level. Finally, the government investment is win-win for both the platform and the government, and Chinese Government should invest on the sellers heavily.

Originality/value

This study specifies the role of the government investment on the sellers in determining the platform’s pricing decisions and the improvement of the social responsibility, which is measured by social welfare.

Article
Publication date: 9 March 2012

Nagihan Çomez and Timothy Kiessling

The purpose of this paper is to study joint inventory and pricing strategy for a continuous inventory review system. While dynamic pricing decisions are often studied in the…

1544

Abstract

Purpose

The purpose of this paper is to study joint inventory and pricing strategy for a continuous inventory review system. While dynamic pricing decisions are often studied in the literature along with inventory management, the authors' aim in this study is to obtain a single long‐run optimal price; also to gain insight about how to obtain the optimal price and inventory control variables simultaneously and then the benefits of joint optimization of the inventory and pricing decisions over the sequential optimization policy often followed in practice.

Design/methodology/approach

A general (R;Q) policy system with fixed cost of ordering is modelled and then the case where unsatisfied demand is lost is studied. General forms of both the additive and multiplicative demand models are used to obtain structural results.

Findings

By showing optimality conditions on the price and inventory decision variables, two algorithms on how to obtain optimal decision variables, one for additive and another for multiplicative demand‐price model are provided. Through extensive numerical analyses, the potential profit increases are reported if the price and inventory problem are solved simultaneously instead of sequentially. In addition, the sensitivities of optimal decision variables to system parameters are revealed.

Practical implications

Although there are several studies in the literature investigating emergency price change models, they use arbitrary exogenous prices menus. However, the value of a price change can be better appreciated if the long‐run price is optimal for the system.

Originality/value

Very few researchers have investigated constant price and inventory optimization, and while there are several past studies demonstrating the benefits of dynamic pricing over a static one, there still are not many findings on the benefit of joint price and inventory optimization.

Details

International Journal of Physical Distribution & Logistics Management, vol. 42 no. 2
Type: Research Article
ISSN: 0960-0035

Keywords

Open Access
Article
Publication date: 27 January 2023

Senyu Xu, Huajun Tang and Yuxin Huang

The purpose of this research is to investigate how to introduce a financing scheme to tackle the manufacturer's capital constraint problem, discuss the effects of data-driven…

1637

Abstract

Purpose

The purpose of this research is to investigate how to introduce a financing scheme to tackle the manufacturer's capital constraint problem, discuss the effects of data-driven marketing (DDM) quality, cross-channel-return (CCR) rate and financing interest rate on the members' pricing and delivery-lead-time decisions and optimal performances, and analyzes `how to achieve the coordination within a dual-channel supply chain (DSC) by contract coordination.

Design/methodology/approach

This work establishes a DSC model with DDM, and the offline retailer can provide internal financing to the capital-constrained online manufacturer. The demand under the price is determined based on DDM quality, customer channel preference and delivery lead time. Then, combined with the Stackelberg game, the optimal pricing and delivery-lead-time decisions are discussed under the inconsistent and consistent pricing strategies with decentralized and centralized systems. Furthermore, it designs a manufacturer-revenue sharing contract to coordinate the members under the two pricing strategies.

Findings

(1) The increase of DDM quality will reduce the delivery-lead-time under the inconsistent or consistent pricing strategy and will push the selling prices; (2) The growth of the CCR rate will raise selling prices and extend the delivery-lead-time under the decentralized decision; (3) Under price competition, the offline selling price is higher than the online selling price when customers prefer the offline channel and vice versa; (4) The retailer and the manufacturer can achieve a win-win situation through a manufacturer-revenue sharing contract.

Originality/value

This paper contributes to the studies related to DSC by investigating pricing and delivery-lead-time decisions based on DDM, CCR, internal financing and supply chain contract and proposes some managerial implications.

Details

Industrial Management & Data Systems, vol. 123 no. 3
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 1 April 2021

Yi Qu, Zhengkui Lin and Xiaonan Zhang

The purpose of this paper is to research the price strategies of online knowledge payment product by considering network externality in the C2C sharing economy.

Abstract

Purpose

The purpose of this paper is to research the price strategies of online knowledge payment product by considering network externality in the C2C sharing economy.

Design/methodology/approach

Considering the characteristics of online knowledge goods and the social network externality of consumers, this study establishes a consumer utility function. On this basis, a multistage game pricing model of online knowledge products is established based on three kinds of network price strategies under a completely competitive market structure. It also analyzes the influence of consumer social network structure and consumer utility on online knowledge product pricing and producer profit, as well as the influence of consumer quantity and discount rate on pricing strategy.

Findings

The consumer social network and consumer utility affect the pricing of online knowledge product under different price strategies. In the growth period of the platform, adopting the price discrimination strategy, the profit of producers is significantly higher than that of other price strategies, and producers should choose effective price strategies for reasonable pricing in combination with their own sales objectives.

Originality/value

This study enriches the literature on the pricing model of online knowledge payment product and owns a practical significance to guide the knowledge producers’ marketing strategies to increase profit.

Article
Publication date: 5 February 2024

Yong Liu, Chang-Xue Lin and Gang Zhao

The paper attempts to discuss the optimal pricing decisions under the decentralized and centralized decision and analyze the influence of online reviews and in-sale service on…

Abstract

Purpose

The paper attempts to discuss the optimal pricing decisions under the decentralized and centralized decision and analyze the influence of online reviews and in-sale service on dual-channel supply chain. Finally, the authors design a two-part tariff coordination mechanism.

Design/methodology/approach

To deal with this pricing conflict problems of dual-channel supply chain consisting of dominant manufacturer and a retailer, considering the fact that online reviews and in-sale service are important factors on consumers’ purchase decisions, the authors establish some basic models and exploit them to discuss the optimal pricing decisions under the decentralized and centralized decision and analyze the influence of online reviews and in-sale service on dual-channel supply chain. Finally, the authors design a profit-sharing coordination mechanism.

Findings

The results show that the optimal online direct selling price is positively correlated with product perceived quality obtained from online reviews and negatively correlated with the in-sale service. The traditional retail price is positively correlated with the in-sale service and weakly correlated with online reviews. For the manufacturer and retailer, whether decentralized decision or coordination contract, their profits increase with the increase of the in-sale service in a certain range and quality perceived from spontaneous online reviews. Online reviews and in-sale service are important factors on consumers’ purchase decisions. Positive in-sale services and online reviews can provide consumers with a better shopping experience, thereby promoting their enthusiasm for shopping and improving their quality of life. The two-part tariff coordination mechanism improves the profits of the manufacturer and the traditional retailer, respectively, through the transfer fee.

Originality/value

The proposed approach can well analyze the channel conflicts and pricing problems between retailers and manufacturers with respect to product offline price and online price. The analysis and results can inform decision-making for manufacturers and retailers.

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 9 May 2016

Wen Jiang and Xu Chen

The purpose of this paper is to investigate the manufacturer’s production, pricing and green technology investment decision problem when strategic customer behavior and carbon…

1293

Abstract

Purpose

The purpose of this paper is to investigate the manufacturer’s production, pricing and green technology investment decision problem when strategic customer behavior and carbon emissions-sensitive random demand is taken into consideration and discuss the impact of carbon emissions-sensitive demand on the manufacturer’s operation strategies, total carbon emissions and maximum expected profit.

Design/methodology/approach

The authors formulate a model to introduce carbon emissions-sensitive demand into the newsvendor framework with strategic customer behavior. The authors characterize the rational expectations equilibrium to derive the optimal solutions to the manufacturer. The authors analyze the effects of carbon emissions-sensitive demand on the manufacturer’s optimal strategies, total carbon emissions and maximum expected profit by comparative analysis.

Findings

The authors obtain the manufacturer’s optimal production, pricing and green technology investment strategies under rational expectations equilibrium in scenario of price-sensitive demand and that of carbon emissions-sensitive demand, respectively. The authors find that as customer demand changes from price-sensitive demand to carbon emissions-sensitive demand, the manufacturer’s optimal prices are the same but optimal production quantity, optimal unit carbon emissions and maximum expected profit go down. Though the total emissions decrease, the carbon emissions reduction would not increase as the demand is more carbon emissions-sensitive. Whether it increases or decreases depends on the model parameters.

Originality/value

Carbon emissions-sensitive demand and strategic customer behavior are considered simultaneously in an integrated model. The result can guide the manufacturer decision-making. The proposed model are hoped to shed light to the future works in the field of sustainable supply chain management.

Details

Industrial Management & Data Systems, vol. 116 no. 4
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 16 November 2015

Syed Asif Raza

The purpose of this paper is to study the impact of differentiation price which has been utilized to segment demand, but results in imperfect segmentation. The use of a…

1902

Abstract

Purpose

The purpose of this paper is to study the impact of differentiation price which has been utilized to segment demand, but results in imperfect segmentation. The use of a differentiation price is among the most widely used Revenue Management (RM) techniques to segment a firm’s demand to augment profitability.

Design/methodology/approach

Mathematical models are developed for a firm’s RM which use a differentiation price to categorize its market demand into two segments. Three distinct demand situations are considered: price-dependent deterministic demand, price-dependent stochastic demand whose distribution is known and price-dependent stochastic demand whose distribution is unknown. Models are analyzed to determine optimal joint control of a firm’s pricing and inventory decisions for each market segment.

Findings

The analysis of the firm’s RM model has shown that revenue is jointly concave in pricing and order quantity. In most demand situations, closed-form mathematical expressions for optimal pricing and inventory are obtained.

Research limitations/implications

In RM models developed in this paper, a firm only selects a differentiation price. Thus, an optimal selection of the differentiation price along with the pricing and inventory decisions may lead to an additional profitability which has not been explored in this research.

Practical implications

The findings reported are relevant to RM managers and practitioners and help them to calibrate their optimal revenues by segmenting markets using a differentiation price.

Social implications

This paper provides a quantitative perspective of a firm’s decision on the use of the differentiation price and the market response.

Originality/value

The paper provides a firm’s optimal decision on pricing and inventory when it experiences demand leakage due to categorizing its market demand into two segments using a differentiation price.

Details

Journal of Modelling in Management, vol. 10 no. 3
Type: Research Article
ISSN: 1746-5664

Keywords

Abstract

Details

Handbook of Transport Systems and Traffic Control
Type: Book
ISBN: 978-1-61-583246-0

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