• Health Policy and Management
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• v.13 no.4
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• pp.84-98
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• 2003

This research objective is to determine the optimal price break points for n­block tariff, because comparing non­linear pricing with uniform pricing on the basis of profit, n­block tariff outperforms two­part tariff, all unit discount price schedule, and uniform pricing. Although the merits of non­linear pricing are well documented, the attempt to practice the non-linear pricing in medical service sector has been relatively rare. The determination of the parameters under n­block tariff is the interesting decision making agenda for marketers. Under n­block tariff, the marketers should decide the optimal price break points and the optimal marginal price for each price zone. The results can be summarized as follows: The researchers found that mixture model can be the feasible methodology for determining the optimal number of n­block tariff and identifying the optimal segmentation criteria. We demonstrate the feasibility and the superiority of the mixture model by applying it to the database of medical examination. The results appear that the number of patients per month can be the optimal segmentation variable. And 6­block tariff is the optimal price break for this medical service.

• Journal of Korean Institute of Industrial Engineers
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• v.15 no.2
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• pp.23-31
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• 1989

From the supplier's point of view, we examine the existence of a Pareto superior pricing schedule for one wholesaler with multiple retailers. In the case of multiple retailers, an order quantity pricing schedule should depends on the retailer's underlying characteristics. But identification of each retailer's characteristics may be impossible; rather, the wholesaler knows only the probability distribution of each retailer's characteristics. Perfect price discrimination is impossible because a separate pricing schedule cannot be tailored for each retailer. Some degree of discrimination is possible only by using a non-linear pricing schedule. From this analysis based on the non-linear pricing, we conclude that there is no Pareto superior pricing schedule for the case of multiple retailers.

• Journal of Korean Institute of Industrial Engineers
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• v.16 no.2
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• pp.81-89
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• 1990

Transfer pricing mechanism is applied to the problem of input buffer size in the context of interfacing a flexible manufacturing system with multiple following production lines. The size of the input buffers can be determined economically by using non-linear transfer pricing either in a decentralized organization or in a centralized organization. Under the certain conditions, input buffer size determined from this non-linear transfer pricing is more economical than the traditional economic lot size model. The benefit comes from transferring part of FMS' inventory to the following production lines. And this non-linear transfer pricing makes sense if the FMS' unit inventory holding cost is high enough.

• Health Policy and Management
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• v.18 no.3
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• pp.128-146
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• 2008

Nonlinear pricing abounds in practice because it is a potentially powerful pricing method to explore consumer surplus. The various forms of nonlinear pricing are feasible within a given industry. In this context, it is important for manufacturers and retailers to understand which nonlinear pricing scheme is appropriate to apply in their specific situation and which nonlinear pricing schedule is the most profitable in their market situation. Although the merits of nonlinear pricing are well documented, the attempt to apply nonlinear pricing in medical service has been relatively rare. The researcher aims to try to full this gap by applying a practice-oriented simulation model to health examination data. We compare the sales volumes among nonlinear pricing scheme such as n-block tariff, two-part tariff, and uniform pricing. We found that n-block tariff outperforms two-part tariff and uniform pricing.

• Journal of the Korean Operations Research and Management Science Society
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• v.31 no.3
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• pp.97-105
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• 2006

Brand Pricing is the most important issue for the brand manager in the dynamic market. in the typical dynamic pricing model, a linear function has been used based on the assumption that the non-Price Influences and the price influences were independent. However, to incorporate the characteristics of the dynamic market, it is natural to consider the multiplicative relationship. We are going to try the multiplicative linkage between the non-price Influences and the price influences and suggest a new dynamic pricing model with e multiplicative functional form. An empirical study of 19 brands in the Korean cigarette market shows the feasibility of the suggested model.

• Journal of Korean Institute of Industrial Engineers
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• v.26 no.1
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• pp.66-72
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• 2000

Inventory management of a product not to be produced any more has a great impact on the financial status of a company. Clearance pricing can make bigger sales volume together with great savings of inventory holding cost specially for a durable goods with relatively large inventory carrying cost and accordingly cash inflow can be improved. This paper deals with the inventory management by non-linear clearance pricing with the sales rate which depends on the accumulated sales volume and selling price.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.28 no.5D
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• pp.649-654
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• 2008

In the definition of non additive path, the sum of travel costs of links making up the path is not equal to the path cost. There are a variety of cases that non-additivity assumption does not hold in transportation fields. Nonetheless, traffic equilibrium models are generally built up on the fundamental hypothesis of additivity assumption. In this case traffic equilibrium models are only applicable within restrictive conditions of the path cost being linear functions of link cost. Area-wide road pricing is known as an example of realistic transportation situations, which violates such additivity assumption. Because travel fare is charged at the moment of driver's passing by exit gate while identified at entry gate, it may not be added linearly proportional to link costs. This research proposes a novel Wordrop type of traffic equilibrium model in terms of area-wide road pricing schemes. It introduces binary indicator variable for the sake of transforming non-additive path cost to additive. Since conventional shortest path and Frank-Wolfe algorithm can be applied without route enumeration and network representation is not required, it can be recognized more generalized model compared to the pre-proposed approaches. Theoretical proofs and case studies are demonstrated.

• Environmental and Resource Economics Review
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• v.24 no.2
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• pp.365-410
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• 2015

Block-rate structures are widely used in utility-pricing, including the Korean residential electricity sector. In the case of the current pricing structure, Korean citizens are highly concerned about incurring excessive electricity costs. For these reasons, there have been many discussions concerning mitigation of the strict pricing structure. Existing studies on the residential electricity demand function under block-rate structure have the following three issues - the consumer's budget constraint is non-linear, perceived price under block-rate structure is uncertain, block-rate structure has endogeneity in the price variable. In this context, this paper estimates the residential electricity demand function using micro-level household expenditure data and simulates the impact of alternative block-pricing schedules.

• Korea Journal of Hospital Management
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• v.28 no.1
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• pp.37-51
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• 2023

Purposes: There exist many non-covered services that the National Health Insurance does not cover, and thus, their prices are set by individual health care providers. However, little study has been done to investigate how hospitals set prices for those services. The purpose of this study is to examine the relationship between ownership, profitability, and prices of those services for a sample of general hospitals. Methodology/Approach: Data regarding the prices of major non-covered services (e.g., upper-level hospital room fees, MRI, Da 7inci robot surgery, and LASIK) were obtained from the Health Insurance Review and Assessment Service and the financial information, as well as other characteristics, were derived from the financial reports from the Korea Health Industry Development Institute. Descriptive statistics, t-tests, and multiple linear regression analyses were used to test the relationship between the independent variables and the dependent variables. Findings: Hospitals owned by private universities appeared to have higher prices for non-covered services while regional public hospitals tend to have lower prices. Profitability, measured by operating margin, was not significantly related to the prices. Hospitals that charge higher prices were more likely to be located in the capital area (Seoul, Incheon, and Gyeonggi), and to employ larger number of personnel. Practical Implications: Public hospitals tend to charge lower prices for non-covered services. Relative market power appears to be related to pricing. Further research is needed to investigate whether such a relationship varies over time and its effects on the quality and access.

• The Korean Journal of Financial Management
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• v.20 no.2
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• pp.73-94
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• 2003

In general, the interest rate is forecasted by the parametric method which assumes the interest rate follows a certain distribution. However the method has a shortcoming that forecasting ability would decline when the interest rate does not follow the assumed distribution for the stochastic behavior of interest rate. Therefore, the nonparametric method which assumes no particular distribution is regarded as a superior one. This paper compares the interest rate forecasting ability between the two method for the Monetary Stabilization Bond (MSB) market in Korea. The daily and weekly data of the MSB are used during the period of August 9th 1999 to February 7th 2003. In the parametric method, the drift term of the interest rate process shows the linearity while the diffusion term presents non-linear decline. Meanwhile in the nonparametric method, both drift and diffusion terms show the radical change with nonlinearity. The parametric and nonparametric methods present a significant difference in the market price of interest rate risk. This means in forecasting the interest rate and the market price of interest rate risk, the nonparametric method is more appropriate than the parametric method.