Design of cost allocation rule for joint replenishment with controllable lead time

To encourage retailers to form cooperative alliances to jointly replenish inventory,considering that the supplier provides a flexible lead time and quantity discount to retailers,a model of average total cost per unit time of periodic joint replenishment is constructed,and an approximate algorithm,which can satisfy the requirement of any given precision,is given.The cost allocation rule in the core of the joint replenishment game is designed based on the cooperative game theory.The numerical experiment results show that the proposed algorithm can quickly solve the joint replenishment problem when the item number is not greater than 640.The retailer's cost saving rate is always greater than 0,and it increases with the increase in quantity discount and fixed cost after adopting the given cost allocation rule.With the increase in the safety stock level,the retailer's cost saving rate increases first and then decreases;and the retailer's cost saving rate increases with the increase in the size of the alliance,but it decreases as the number of product category increases.The proposed cost allocation rule can reduce the retailer's cost up to 20%,which is conducive to forming a cooperative coalition.

Review of Methods to Calculate Congestion Cost Allocation in Deregulated Electricity Market

With maturing deregulated environment for electricity market, cost of transmission congestion becomes a major issue for power system operation. Uniform Marginal Price and Locational Marginal Price (LMP) are the two practical pricing schemes on energy pricing and congestion cost allocation, which are based on different mechanisms. In this paper, these two pricing schemes are introduced in detail respectively. Also, the modified IEEE-14-bus system is used as a test system to calculate the allocated congestion cost by using these two pricing schemes.

Transmission Cost Allocation by Power Tracing Based Equivalent Bilateral Exchanges

The allocation of transmission cost provides important references and signals for system expansions and investments.This paper proposes a power tracing based equivalent bilateral exchange(PTEBX)method in which network users are responsible for not only their induced power flows,but also power flows induced by whom they have equivalent bilateral exchanges with.The equivalent bilateral exchanges are recognized based on the power tracing.To evaluate the performance of different methods of allocating transmission cost,seven criteria are put forward that take into consideration characteristics of power systems.Theoretical analysis is then conducted to certify whether the methods satisfy the criteria.The results indicate that only the PTEBX method is able to satisfy all the seven criteria.Numerical examples based on the IEEE-30 system are presented to further demonstrate the applicability of the proposed method.

Development of a Circuit-theory Based Transmission Cost Allocation Method by Orthogonal Projection and Equal-sharing Principle

This paper presents a new solution to the problem of transmission cost allocation to its users.The proposed technique utilizes modified Z-bus theory,equivalent current injection and impedance of the generators and loads,and is developed by the equal-sharing as well as the orthogonal projection principle.The procedure is performed in three steps.First,the modified Z-bus theory is used to calculate the contribution of the users into the network bus voltages as well as the branch currents.Then,the equal sharing principle is confirmed by the game theory solutions and is subsequently applied to identify the users’contributions into the branch power flows.After that,the orthogonal projections of the contributions are calculated and the concept of effective contributions is suggested.The proposed methodology provides the percentage shares of the users on the network complex variables,which help to better assess the contributions.A 2-bus and the IEEE 30-bus test system are used to validate the proposed technique.Finally,the proposed methodology is applied to the polish 2383-bus system to emphasize its applicability to large practical systems.

Serial Cost Allocation in the Cooperative Purchasing Organization

Under the seller's quantity discount, buyers self-organize or rely on a third party to aggregate their pur- chasing quantities to obtain lower prices. Because of the unequal member contributions in the cooperative pur- chasing organization, the buyers' strategy is diferent, the members often fluctuate, and the organizations do not sustain themselves. An efective mechanism is necessary to improve the performance of purchasing groups. We study the various forms of cost allocation mechanism in practice. Diferent allocation rules may have influence on the buyers' behavior(i.e., purchasing quantities, whether joining the organization or not). We analyze the serial cost allocation and equilibrium purchasing quantity based on a Nash equilibrium, and the results show that each buyer is worse of when not participating in the existence buying organization of the other buyers. We further find that the serial mechanism just confirms the most efcient Nash equilibrium: reasonable cost allocation rule is necessary for the subjects to identify their optimal strategy.

Allocation of congestion relief cost based on flow change on the congested facilities

Congestion management in an electricity market is introduced in this paper and a new method of allocating congestion cost to transactions is proposed. The proposed method is a two-step process, in which the total congestion cost is firstly allocated to congested facilities and then to each transaction involved. The cost of relieving a congested facility allocated to each transaction is proportional to the power flow change on the congested facility caused by the transaction. The more the power flow change is on the congested facility caused by the transaction, the deeper the degree of involvement by the transaction. Therefore, cutting down the magnitudes of such transactions contributes to relieving congestion. Test results on a 5-bus system indicate that the proposed method can reflect reasonably the degree of involvement by each transaction in the congestion and provide correct price signals contributing to relieving congestion.

Allocation of fixed transmission cost based on power flow tracing algorithm

In the electricity market, charging based on the traditional spot electricity price often results in the payment imbalance of electric network, and goes against the development of the power system. So, it is necessary to modify the spot price. The key of the modification lies in how to calculate the fixed unit transmission cost of each node, that is how to allocate the fixed transmission cost to users.To solve this problem, we develop a power flow tracing algrithm to modify the spot price. We put forward a path searching method based on the graph theory after studying the fundamental principle of power flow tracing and apply the method to the downstream tracing algorithm and upstream tracing algorithm according to the proportional distribution principle. Furthermore, to improve the computational efficiency of the algorithm, we introduce the branch expunction method to optimize the node order. By using the result of power flow tracing to get fixed node transmission cost and introducing it to modify the spot price, we obtain the synthetical price.The application to a 5-bus system prove the algorithm feasible.

Power flow tracing based method for allocation of transmission service cost to transactions

Based on the concepts of objective fact and subjective desire proposed in this paper, the problems that exist in the nodal injections-based and transaction-based transmission service allocation scheme are pointed out. To get around the problems above, a novel transmission service allocation scheme is proposed which considers the power flow distribution and the transaction impact on the system simultaneously so that the issues of “Cross-subsidies” and “Counter flow” can be avoided. The principle of the scheme is illustrated using two simple networks with 7 cases. The results show that the proposed scheme can satisfy the properties necessary for the development and growth of the electricity market.

Benefit-based cost allocation for residentially distributed photovoltaic systems in China:A cooperative game theory approach

Distributed photovoltaic(PV)systems have constantly been the key to achieve a low-carbon economy in China.However,the development of Chinese distributed PV systems has failed to meet expectations because of their irrational profit and cost allocations.In this study,the methodology for calculating the levelized cost of energy(LCOE)for PV is thoroughly discussed to address this issue.A mixed-integer linear programming model is built to determine the optimal system operation strategy with a benefit analysis.An externality-corrected mathematical model based on Shapley value is established to allocate the cost of distributed PV systems in 15 Chinese cities between the government,utility grid and residents.Results show that(i)an inverse relationship exists between the LCOEs and solar radiation levels;(ii)the government and residents gain extra benefits from the utility grid through net metering policies,and the utility grid should be the highly subsidized participant;(iii)the percentage of cost assigned to the utility grid and government should increase with the expansion of battery bank to weaken the impact of demand response on increasing theoretical subsidies;and(iv)apart from the LCOE,the local residential electricity prices remarkably impact the subsidy calculation results.

Game theory approach to optimal capital cost allocation in pollution control

This paper tries to integrate game theory, a very useful tool to resolve conflict phenomena, with optimal capital cost allocation issue in total emission control. First the necessity of allocating optimal capital costs fairly and reasonably among polluters in total emission control was analyzed. Then the possibility of applying game theory to the issue of the optimal capital cost allocation was expounded. Next the cooperative N person game model of the optimal capital cost allocation and its solution ways including method based on Shapley value, least core method, weak least core methods, proportional least core method, CGA method, MCRS method and so on were delineated. Finally through application of these methods it was concluded that to apply game theory in the optimal capital cost allocation issue is helpful to implement the total emission control planning schemes successfully, to control pollution effectively, and to ensure sustainable development.

Establish the Long-effective Mechanism of Food Security in China

In despite of fluctuation in recent years, the grain yield in China has been increasing, which relieves the conflict between supply and demand and turns the situation of food security good. However, because of the rapid increase in food consumption, the conflicts of food quality and structure in the supply and demand equilibrium has become more and more obvious and the long-effective mechanism of food security has not been estab-lished yet. It is found that the factors affecting food security in China include the scarcity and dissipation of resources, farmers’ low enthusiasm in planting grain crops and the inappropriateness of the emphasis and measures of macro-economic regulation and control. Therefore, the authors advance to optimize resources allocation, strengthen macro-economic regulation and control and policy stimulation and establish the mechanism of allocating grain production cost, to set up the long-effective mechanism of China food security and keep it stable in the long term.

Two new methods for power flow tracing using bus power balance equations

Two new methods were presented for power flow tracing(PFT).These two methods were compared and the results were discussed in detail.Both methods use the active and reactive power balance equations at each bus in order to solve the tracing problem.The first method considers the proportional sharing assumption while the second one uses the circuit laws to find the relationship between power inflows and outflows through each line,generator and load connected to each bus of the network.Both methods are able to handle loop flow and loss issues in tracing problem.A formulation is also proposed to find the share of each unit in provision of each load.These methods are applied to find the producer and consumer's shares on the cost of transmission for each line in different case studies.As the results of these studies show,both methods can effectively solve the PFT problem.

Non-convexity Pricing and Allocating Costs in Stochastic Electricity Markets

Stochastic electricity markets have drawn attention due to fast increase of renewable penetrations.This results in two issues:one is to reduce uplift payments arising from non-convexity under renewable uncertainties,and the other one is to allocate reserve costs based on renewable uncertainties.To resolve the first issue,a convex hull pricing method for stochastic electricity markets is proposed.The dual variables of system-wide constraints in a chance-constrained unit commitment model are shown to reduce expected uplift payments,together with developing a linear program to efficiently calculate such prices.To resolve the second issue,an allocation method is proposed to allocate reserve costs to each renewable power plant by explicitly investigating how renewable uncertainties of each renewable power plant affect reserve costs.The proposed methods are validated in a 24-period 3-unit test example and a 24-period 48-unit utility example.

Experimental Research of the Radiator Thermal Performance Test Equipment and Its Application in Heating System

Radiator thermal performance test equipment plays a key role in the processing of developing a new type of heat radiator and its application products.The precise of temperature controlling,temperature measuring andflow measuring are the vital factors for a radiator thermal performance test equipment.Based on the above back-ground,this paper improves the measurement and control system of radiator thermal performance test equip-ment,which improves the accuracy of the radiator thermal performance test equipment.This paper also optimizes the software and hardware system simultaneously so as to improve the precision of the auto-test system of test equipment.Theflow rate ranges from 175 kg/h to 178 kg/h under different conditions.The average is 176.5 kg/h and the deviation rates are from 1.62%to 1.97%.The heat produced under various conditions is different.The maximum is 4.3 kW and the minimum is 4.2 kW for condition 1,the maximum is 3.3 kW and the minimum is 3.2 kW for condition 2 and the maximum is 1.95 kW and the minimum is 1.89 kW for condition 3.However,the deviation rate is about 2.9%,which shows that the device has high stability and high precision.This paper studies a new electronic heat cost allocate meter test method by radiator thermal performance test equipment at the same time.This paper tests temperature changes through four measures points and gets a result appeared as a heat backup which should be avoided when using in the test of electronic heat cost allocate meter.Some experiences and references could be gained for further research in the heating system from this test and research.

Allocating Fixed Costs with Considering the Return to Scale: A DEA Approach

When the allocated fixed cost is treated as the complement of other costs, conventional data envelopment analysis （DEA） researches have ignored the effect of the return to scale （RTS） in fixed cost Mlocation problems. This paper first demonstrates why the RTS should be considered in fixed cost allocation problems. Then treating the fixed cost as a complementary input, the authors investigate the relationship between the allocated cost and the variable return to scale （VRS） efficiency based on the super BCC DEA model. However, the infeasibility problem may exist in this situation. To deal with it, the authors propose an algorithm. The authors find that the super BCC efficiency is a monotone non-increasing function of the allocated cost. Based on the relationship, the authors finMly propose a fixed cost allocation approach in terms of principles as： （i） The fixed cost proportion allocated to inelastic DMUs should be consistent with their consumed cost proportion, and （ii） the same efficiency satisfaction degree to the rest DMUs. The optimal allocation scheme is unique. A numerical example and a real example of allocating fixed costs among 13 subsidiaries are employed to illustrate the proposed approach.

Allocating Ex-post Deviation Cost of Virtual Power Plants in Distribution Networks

Virtual power plants(VPPs)including distributed generation,energy storage,and elastic load are emerging in distribution networks.Multiple VPPs can participate in electricity market as an aggregated entity and effective cost allocation mechanism among VPPs is a crucial issue.This paper focuses on allocating ex-post cost of VPPs incurred by deviation between actual power and ex-ante schedule in a two-settlement electricity market.We obtain approximate quadratic formulation of ex-post deviation cost considering network loss and develop an analytical cost allocation algorithm based on cooperative game theory.The allocated cost is consistent with cost causation principle and provides VPPs with incentive for aggregation.The proposed allocation method and relevant theoretical result are evaluated and verified by numerical tests.

Transmission pricing and recovery of investment costs in the deregulated power system based on optimal circuit prices

Transmission pricing has become a major issue in the discussions about the deregulated electricity markets. Consequently, open access to the transmission system is one of the basic topics to allow competition among participants in the energy market. Transmission costs have an important impact on relative competition among participants in the energy market as well as on short- and long-term economic efficiencies of the whole electricity industry, although they represent only close to 10% of the energy market price. This paper deals with the design and tests of a transmission pricing method based on the optimal circuit prices derived from the economically adapted network （EAN）. Prices derived from the EAN have the advantage of being in tune with the maximum revenue allowed to the owner of transmission assets and simplifying the optimal allocation of transmission costs among participants. Beginning from the conceptual design, the proposed method is tested on a three-bus network and on the IEEE 24-bus reliability test system.

Transmission Use of System Charging for Differentiating Long-term Impacts from Various Generation Technologies

This paper proposes a novel transmission use of system(TUoS)charging method,which is able to 1)acknowledge the trade-offs between short-run congestion cost and long-run investment cost when justifying economic network investment,2)identify the impacts of different generation technologies on congestion cost and network investment,and 3)translate these impacts into economically efficient TUoS tariffs that differentiate generation technologies.An incremental capacity change from a generator will impact the congestion costs at each branch,which is then translated into the impacts on investment time horizons.The difference in the present values with and without the incremental change for a branch is its long-run incremental cost(LRIC).The final TUoS tariff for this generator is the sum of all LRIC triggered by its capacity increment.The proposed method is demonstrated on a modified IEEE 14-bus system to show its effectiveness over the traditional approach.Results show that it can provide cost-reflective TUoS tariffs for different generation technologies at the same sites by examining their respective impacts on congestion and investment.It thus can incentivize appropriate generation expansion to reduce congestion costs and ultimately network investment cost.