• Proceedings of the Safety Management and Science Conference
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• 2000.05a
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• pp.77-86
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• 2000

This paper deals with the problem of determining the retailer's optimal price and order size under the condition of order-size-dependent delay in payments. It is assumed that the length of delay is a function of the retailer's total amount of purchase. The constant price elasticity demand function is adopted which is a decreasing function of retail price. Investigation of the properties of an optimal solution allows us to develop an algorithm whose validity is illustrated through an example problem.

• Management Science and Financial Engineering
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• v.18 no.1
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• pp.21-26
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• 2012

Two previous studies that attempted to generalize the deterministic joint pricing-inventory decision model are reevaluated. We prove analytically that even in a single-product environment, the EOQ model with constant priceelastic demand cannot find optimal solutions unless two optimality conditions associated with price elasticity and demand magnitude are satisfied. Due to the inexistence of the general optimality for the problem, demand function and price elasticity must be evaluated and bounded properly to use the methods proposed in the previous studies.

• Proceedings of the KIEE Conference
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• 2003.07a
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• pp.615-617
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• 2003

In electricity market with a imperfect competition, participants make plans of biddings and transaction strategies to maximize their own profits. The market price and the quantity are determined by bidding systems and market demands. Practically the characteristics of power demand have rather two forms; elastic region and inelastic region, than constant slope elasticity. Furthermore the price cap in the market can be modelled as a region of perfect elasticity in the demand function. This paper analyses supplier's bidding strategies which are reflected the characteristics of practical demand. Equilibrium strategies are solved by using the Bertrand model and payoff matrices.

• The Journal of the Convergence on Culture Technology
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• v.9 no.5
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• pp.493-499
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• 2023

Trade credit refers to a transaction where a product supplier allows an distributor to defer payment for a certain period of time for the purchase cost of the products. This practice is generally permitted as a means of differentiation between competing companies. Such trade credit is commonly granted based on the volume of transactions, aiming to increase customer orders. From the perspective of the distributor, trade credit allows for a deferred payment period for the purchase cost, leading to cost savings in inventory investment. These cost savings in inventory investment can be a factor in reducing selling prices with the aim of increasing customer demand. In this study, we analyze a model that determines the optimal selling price and order quantity from the perspective of the distributor, assuming that the supplier allows a deferred payment period dependent on the transaction volume. We assume that the final customer's annual demand exhibits an exponential decrease with respect to the distributor's selling price, using a constant price elasticity function. To analyze the problem, we assume that the product deteriorates at a constant rate over time and aim to establish an inventory model for the intermediate distributor. We also want to analyze the impact of deterioration on the inventory policies of the intermediate distributor.

• The Journal of the Convergence on Culture Technology
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• v.9 no.6
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• pp.257-262
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• 2023

As part of their marketing policy, some suppliers allow retailers a period of credit in anticipation of increasing demand for the products they supply. The opportunity to defer payments on products through credit transactions has the effect of reducing retailers' inventory investment costs, and as a result, retailers determine selling prices in anticipation of increased demand from buyers. This study aims to analyze the inventory model that determines the retailer's selling price and EOQ(Economic Order Quantity) under the assumption that the buyer's demand is an exponentially decreasing function of the retailer's selling price in the credit transaction supply chain consisting of suppliers, retailers, and buyers. The products supplied for problem analysis include the case of deteriorating products that deteriorate over time, and the effect of the credit transaction period, the index of price elasticity and the degree of deterioration on the retailer's selling price and EOQ is analyzed.

• Journal of Energy Engineering
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• v.25 no.2
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• pp.37-44
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• 2016

The demand for electricity has a considerable impact on various energy sectors since electricity is generated from various energy sources. This paper attempts to estimate the electricity demand function and obtain some quantitative information on price and income elasticities of the demand. To this end, we apply a lagged dependent variable model to derive long-run as well as short-run elasticities using the time-series data over the period 1991-2014. Our dependent variable is annual electricity demand. The independent variables include constant term, real price of electricity, and real gross domestic product. The results show that the short-run price and income elasticities of the electricity demand are estimated to be -0.142 and 0.866, respectively. They are statistically significant at the 5% level. That is, the electricity demand is in-elastic with respect to price and income changes in the short-run. The long-run price and income elasticities of the electricity demand are calculated to be -0.210 and 1.287, respectively, which are also statistically meaningful at the 5% level. The electricity demand is still in-elastic with regard to price change in the long-run. However, the electricity demand is elastic regarding income change in the long-run. Therefore, this indicates that the effect of demand-side management policy through price-control is restrictive in both the short- and long-run. The growth in electricity demand following income growth is expected to be more remarkable in the long-run than in the short-run.

• The Journal of the Convergence on Culture Technology
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• v.6 no.2
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• pp.191-197
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• 2020

As an effective means of price discrimination, some suppliers offer trade credit to the distributors for the purpose of increasing the demand of the product they produce. The availability of the delay in payments from the supplier enables discount of the distributor's selling price from a wider range of the price option in anticipation of increased customer's demand. In this regard, we consider the problem of determining the distributor's optimal price and lot size simultaneously when the supplier permits delay in payments for an order of a product whose demand rate is represented by a constant price elasticity function. It is assumed that the distributor pays the shipping cost for the order and hence, the distributor's ordering cost consists of a fixed ordering cost and the shipping cost that depend on the order quantity. For the analysis, it is also assumed that inventory is depleted not only by customer's demand but also by decay. We are able to develop a solution algorithm from the properties of the mathematical model. A numerical example is presented to illustrate the algorithm developed.