Investment decision optimization for delayed product differentiation based on queuing theory

To balance inventory cost with diverse demand,an optimal investment decision on necessary process improvement for delayed product differentiation is studied. A two-stage flexible manufacturing system is modeled as a continuous time Markov chain. The first production stage manufactures semifinished products based on a make-to-stock policy. The second production stage customizes semi-finished products from the first production stage on a make-to-order policy. Various performance measures for this flexible manufacturing system are evaluated by using matrix geometric methods. An optimization model to determine the level of investment on process improvement that minimizes the manufacturer ’s total cost is established. The results show that,a higher investment level can reduce both the expected customer order fulfillment delay and the expected semi-finished products inventory. When the initial order penetration point is 0. 4,the manufacturer ’s total cost is reduced by 15. 89% through process investment. In addition, the optimal investment level increases with the increase in the unit time cost of customer order fulfillment delay,and decreases with the increase in the product value and the initial order penetration point.

Effect of contract choice on upstream carbon emission reduction considering carbon taxation

In order to curb the manufacturer’s product carbon emission levels, the leading retailer usually offers three contracts to the manufacturer, i.e., wholesale-price contract(WC), cost-sharing contract(CC) and revenue-sharing contract(RC). The results of implementing the three contracts are discussed and compared. The results reveal that as long as the government levies carbon taxations, all the three contracts can effectively stimulate the manufacturer to invest in carbon emission reduction. Among the three contracts, RC can achieve the highest level of carbon emission reduction of products and the maximum profits for both the manufacturer and retailer in a supply chain. However, the RC fails to reach the level of the centralized supply chain(CSC), thus it cannot coordinate the supply chain. The supply chain members’ contract choices are consistent. Both members prefer RC to the other two contracts. In order to effectively reduce the manufacturer’s carbon emission levels, the government should impose the highest carbon taxation level under RC, the medium carbon taxation level under CC, the lowest carbon taxation level under WC, and the same carbon taxation level as RC under the CSC.

Scheduling optimization problem considering time-of-use tariffs and piece-rate machine maintenance in EAF steelmaking

An operating schedule of the parallel electric arc furnaces(EAFs)considering both productivity and energy related criteria is investigated.A mathematical model is established to minimize the total completion time and the total electricity cost.This problem is proved to be an NP-hard problem,and an effective solution algorithm,longest processing time-genetic(LPT-gene)algorithm,is proposed.The impacts of varied processing energy consumption and electricity price on the optimal schedules are analyzed.The integrated influence of the different weight values and the variation between the peak price and the trough price on the optimal solution is studied.Computational experiments illustrate that considering the energy consumption costs in production has little influence on makespan;the computational performance of the proposed longest processing time-genetic algorithm is better than the genetic algorithm(GA)in the issue to be studied;considerable reductions in the energy consumption costs can be achieved by avoiding producing during high-energy price periods and reducing the machining energy consumption difference.The results can be a guidance for managers to improve productivity and to save energy costs under the time-of-use tariffs.

Impact of social relationship on firms' sharing reward program

In order to make strategic decision on firms’ sharing reward program( SRP), a nested Stackelberg game is developed. The sharing behavior among users and the rewarding strategy of firms are modeled. The optimal sharing bonus is worked out and the impact of social relationships among customers is discussed. The results show that the higher the bonus,the more efforts the inductor is willing to make to persuade the inductee into buying. In addition,the firms should take the social relationship into consideration when setting the optimal sharing bonus. If the social relationship is weak,there is no need to adopt the SRP. Otherwise,there are two ways to reward the inductors. Also,the stronger the social relationship,the fewer the sharing bonuses that should be offered to the inductors,and the higher the expected profits. As a result,it is reasonable for the firms to implement SRPs on the social media where users are familiar with each other.

Impact of thumb up sharing advertising in social media

“Thumb up advertising”is a new and effective way to spread shared advertising in social media.How the retailer adapts“thumb up advertising”in marketing with a game theory model is analyzed.The results show that when the retailer chooses to thumb up the advertising in Moments,a higher reward will increase the equilibrium price but hurt the retailer s expected profit;if the consumers can more easily reach the thumb up amount,the retailer will charge a higher price,and possibly gain more profit.When the retailer chooses thumb up at the end of the advertising context,a higher reward will increase the equilibrium price and the retailers expected profit will increase/decrease.If the consumers are easier to reach the thumb up amount,the retailer will charge a higher price,and may get more profit.If a consumer s click cost of clicking the sharing advertising is higher,the retailer charges a lower price;and if the consumer s additional perceived value from the advertising is higher,the retailer charges a higher price and reaps more profit.

Deciding whether manufacturing firms share product links on owned social media considering fan effects

An optimization model is proposed to examine the choice of sharing or not sharing the product link for manufacturing firms with owned social media by considering the role of fan effects.The equilibrium marketing effort level and firm profit in both cases are compared.The results show that the firm chooses to share(not share)the product link when the social platform commission rate is low(high).Moreover,the likelihood of sharing the product link increases as the fan effect weakens and the perceived conversion cost strengthens.Interestingly,the marketing effort level increases with the product price,but firm profit does not always follow.Additionally,as the fan effect and fan count grow,so does the firm s profit.Furthermore,when the firm shares the product link,the level of marketing effort and firm profit decrease with the commission rate.Conversely,when the firm does not share the product link,those aforementioned factors increase as the perceived conversion cost declines.These results thus suggest that firms should enhance the influence of owned social media to attract more high-quality fans,and social platforms should optimize the product link functionality.

Sustainability of health information exchange platform based on information cooperation

Inactive user participants are an obstacle to the improvement of the sustainability of health information exchange platforms.First,the evolutionary game model of patients and healthcare providers participating in information sharing under four value-based healthcare delivery modes,i.e.,traditional medical model,collaborative care,self-managed care(SMC),and healthcare value co-creation(HVC),is constructed.Second,co-creators'initial participation ratio,information quality,which can trigger deviation from equilibrium sustainability in the dynamic process,is analyzed.Results show that extensive patient participation is more helpful to sustainable platform operation than provider participation.Moreover,quality patient data are more conducive to transforming the healthcare model from SMC to HVC than healthcare provider data.

Appointment scheduling with customer impatience based on operating cost model

An appointment scheduling problem is studied with the consideration of customer impatience.On the assumption that both the time of leaving queue and the time of service are exponentially distributed,in order to minimize the joint cost,the optimal appointment schedule of the fixed number of customers is studied.The joint cost function is composed of customers expected delay time and service availability time.The expected delay time of each customer in the queue is recursively computed in terms of customer interarrival time.Furthermore,the effect of impatience on the optimal schedule as well as the total operating cost is studied.The results show that as the impatience rate increases,the optimal interarrival time becomes shorter and the interarrival time of the last few customers gradually approaches that of the customers in the middle.In addition,impatient behaviors can increase the joint cost.

Firm review revelation policy considering social ties among consumers

An optimization model is proposed to analyze the optimal review revelation policies and consumer online social network management strategies of e-commerce firms.The results show that displaying friend reviews to consumers does not necessarily increase firms profits.Only when positive reviews account for a large proportion of all the reviews and when the cost of showing friend reviews is not high,can showing friend reviews be more profitable than not showing such information.The distribution of social ties among consumers can affect firms profits.Even in the case that showing friend reviews to consumers is more profitable,an increase in the proportion of strong ties is not necessarily beneficial to firms.Only when the proportion of positive reviews is large enough,can firms profits increase with the increase in the proportion of strong ties among consumers.Moreover,the degree of consumer distrust in the average quality rating can also affect firms strategies for managing consumer online social networks.As the degree of consumer distrust in the average quality rating rises,firms are more likely to obtain higher profits by taking measures to increase the proportion of strong ties among consumers on their websites.

Contract stability and default risk control of pig farming in the company and farmer mode

To investigate contract stability in the company and farmer mode and to explore control measures of market price risk and production risk,a multiperiod game model was established in this study.Considering multiple periods and losses caused by deaths simultaneously,a stable contract price interval depending on the breaching penalty,transaction cost,spot market price,and quantity of pigs was observed.Results indicate that the higher the penalty and transaction cost savings,the better the stability of the contract;the contract price should be negotiated around the weighted average of the spot market price.When the production risk is higher,hog insurance can significantly improve the contract stability;when the market price is lower,hog price index insurance improves the contract stability by guaranteeing the company income;when the market price is higher,the profit-returning mechanism improves the stability by protecting farmers incomes.Applying three measures simultaneously results in the best stability.Examples based on data from 2014 to 2018 in Henan Province,China,were given.

Pricing of discrete barrier options based on an analytical method

The problem o f analytically pricing the discrete monitored European barrier options is studied under the assumption of the Black-Scholes market.First,using variable transformation,the mean vector and covariance matrix of multi-dimensional marginal distribution are given.Secondly,the analytica pricing formulas of the discrete monitored upknock-out European call option and the discrete monitored down-knock-out European put option a e obtained by using the conditional probability and the characteristics o f the multidimensional normal distribution.Finally,the effects of the discrete monitoring barriers on the prices of the barrier optionsare discussed and analyzed.The research results state that the price o f the discrete monitored up-knock-out European call option mcreases with the increase in the up barrier,a d the price o f the discrete monitored down-knock-out European put option decreases with the increase in the down barrier.

Combination advertising with budget constraint

An appropriate advertising mode selection and allocation of advertising budgets considering advertising budget constraints are developed with the game theory and optimization model.The results show that the advertising budget and the weakening factor of the online advertising effects on the traditional advertising affect sellers advertising,pricing strategies and budget allocation.The effectiveness of combination advertising is a Pareto optimum relative to the traditional advertising in a certain range.The weakening effect of the online advertising on the traditional advertising has a nonlinear effect on the advertising strategy and pricing strategy.In addition,sellers choose combination advertising with different budget constraints,and there is an optimal budget allocation ratio.In certain cases,sellers can obtain an optimal advertising expenditure less than the budget constrain.When sellers adopt combination advertising with enough budget,they do not invest in traditional advertising without limit.Moreover,compared with enough budget,when sellers adopt combination advertising with budget constrain,sellers do not decrease the advertising allocation of online advertising since online advertising is more efficient.

Comparison on global supply chain purchasing strategies based on supply contracts

In the global supply chain in a setting characterized by exchange rate uncertainties,it is quite necessary to focus on comparative research trying to find out which kind of purchasing strategy is better in different situations.The two common global purchasing strategies,risk sharing(RS)and quantity flexibility(QF),are selected to be compared.Using a real-options approach,the valuation models of RS and QF purchasing contracts are established.By means of binomial lattice technique,numerical simulation and sensitivity analysis of two stochastic dynamic programs are presented.The effects on expected discounted value by changing relative parameters are described clearly.Based on comparative analysis,it is concluded that the QF purchasing strategy is better than that of the RS especially where great volatility exists for exchange rate processes in the global supply chain.

Impacts of trade-in program on duopoly competition with product quality differentiation and secondhand market

Considering the existence of the secondhand market and the implementation of trade-in program,the competition models between two manufacturers who produce the same products at various qualities are developed by the Nash game,and the impacts of the trade-in program from the perspectives of the demands,profits,marginal profits of manufacturers and the net costs of consumers are investigated.It finds that the trade-in program has different impacts when it is implemented by different manufacturers.When the low-quality manufacturer implements the program,it is always beneficial to himself and consumers but harmful to the high-quality manufacturer.However,when the program is implemented by the high-quality manufacturer,it can be beneficial to the low-quality manufacturer as well as to the implementer but harmful to consumers if the transaction cost of the consumer selling the used product in the secondhand market is low enough.Furthermore,with the increase in transaction cost,it also becomes harmful to the low-quality manufacturer and beneficial to consumers,which is the same as in the case that the low-quality manufacturer implements the trade-in program.The impacts of related parameters on the demands,marginal profits of manufacturers and the net costs of consumers are also analyzed.

Consumers'privacy data sharing between the seller and the e-commerce platform

Due to the fact that consumers'privacy data sharing has multifaceted and complex effects on the e-commerce platform and its two sided agents,consumers and sellers,a game-theoretic model in a monopoly e-market is set up to study the equilibrium strategies of the three agents(the platform,the seller on it and consumers)under privacy data sharing.Equilibrium decisions show that after sharing consumers'privacy data once,the platform can collect more privacy data from consumers.Meanwhile,privacy data sharing pushes the seller to reduce the product price.Moreover,the platform will increase the transaction fee if the privacy data sharing value is high.It is also indicated that privacy data sharing always benefits consumers and the seller.However,the platform's profit decreases if the privacy data sharing value is low and the privacy data sharing level is high.Finally,an extended model considering an incomplete information game among the agents is discussed.The results show that both the platform and the seller cannot obtain a high profit from privacy data sharing.Factors including the seller's possibility to buy privacy data,the privacy data sharing value and privacy data sharing level affect the two agents'payoffs.If the platform wishes to benefit from privacy data sharing,it should increase the possibility of the seller to buy privacy data or increase the privacy data sharing value.

Analysis of optimal referral reward programs for innovative offerings

A nested Stackelberg game among a provider of a product,a sender(existing customer),and a receiver(new customer)is developed to explore the optimal referral reward programs(RRPs)for innovative offerings.The results indicate that the provider should forsake RRPs and purely rely on customers'organic word-of-mouth communication under certain conditions.In particular,when the innovativeness of the referred product is extremely high,the provider should forsake RRPs completely,even though few customers will make organic referrals for the product.When the innovativeness is on other levels,the provider should make optimal RRPs decision depending on both the sender's persuasion effectiveness and the tie-strength between the two customers.Moreover,the optimal rewards increase with the innovativeness of the referred product when the provider opts to use RRPs.These results seem contrary to the existing empirical finding to some extent,and it is due to the high referral cost for making a successful referral for the high innovative offerings.

Enhancing customers prevention efforts:An incentive feedback mechanism design

To improve the inefficient prevention caused by customers unwillingness to adopt prevention strategies in health management,an incentive feedback mechanism that is based on game theory and contract design theory is introduced.The conditions for making customers and health maintenance organizations(HMOs)willing to participate in the proposed mechanism are given.A dual nonlinear programming model is used to identify the optimal prevention effort of customers and the pricing strategy of HMOs.Results show that to generate increased benefits,HMOs need to consider cost sharing when customers are not familiar with the proposed health services.When health services are gradually accepted,the cost sharing factor can be gradually reduced.Simulation shows that under random circumstances in which the market reaches a certain size,the proposed method exhibits a positive network externality.Motivated by network externality,HMOs only need to make their customers understand that the larger the number of participants,the greater the utility of each person.Such customers may then spontaneously invite others to purchase insurance.

Manufacturers’channel selections under the influence of the platform with big data analytics

To obtain the platform s big data analytics support,manufacturers in the traditional retail channel must decide whether to use the direct online channel.A retail supply chain model and a direct online supply chain model are built,in which manufacturers design products alone in the retail channel,while the platform and manufacturer complete the product design in the direct online channel.These two models are analyzed using the game theoretical model and numerical simulation.The findings indicate that if the manufacturers design capabilities are not very high and the commission rate is not very low,the manufacturers will choose the direct online channel if the platform s technical efforts are within an interval.When the platform s technical efforts are exogenous,they positively influence the manufacturers decisions;however,in the endogenous case,the platform s effect on the manufacturers is reflected in the interaction of the commission rate and cost efficiency.The manufacturers and the platform should make synthetic effort decisions based on the manufacturer s development capabilities,the intensity of market competition,and the cost efficiency of the platform.

Effect improvement of drug pricing reform based on multi-channel coordination

To improve the effect of the drug pricing reform,a business model of pharmaceutical e-commerce is introduced into the pharmaceutical supply chain.First,based on the measures of the drug pricing reform,a dual-channel model is established,consisting of a drugstore and a hospital.The analysis of the model indicates that the reform leads to higher costs for patients.Then,an e-pharmacy is added to the dual-channel supply chain.Meanwhile,to reduce the home-delivery cost of the e-pharmacy,a multi-channel coordination strategy called“order online,delivery by drugstore”is proposed.By comparing the optimal values under the two models with and without coordination strategy,respectively,the results show that the profits of the e-pharmacy and the drugstore increase while the retail prices of drugs drop,and a large number of patients are diverted from the hospital.Therefore,the business model of pharmaceutical e-commerce with multi-channel coordination can greatly improve the effect of the drug pricing reform.

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.