• Clean Technology
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• v.28 no.2
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• pp.182-192
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• 2022

This study provides an overview of the production costs of methane and hydrogen via water electrolysis-based hydrogen production followed by a methanation based methane production technology utilizing CO₂ from external sources. The study shows a comparative way for economic optimization of green methane generation using excess free electricity from renewable sources. The study initially developed the overall process on the Aspen Plus simulation tool. Aspen Plus estimated the capital expenditure for most of the equipment except for the methanation reactor and electrolyzer. The capital expenditure, the operating expenditure and the feed cost were used in a discounted cash flow based economic model for the methane production cost estimation. The study compared different reactor configurations as well. The same model was also used for a hydrogen production cost estimation. The optimized economic model estimated a methane production cost of $11.22/mcf when the plant is operating for 4000 hr/year and electricity is available for zero cost. Furthermore, a hydrogen production cost of $2.45/GJ was obtained. A sensitivity analysis was performed for the methane production cost as the electrolyzer cost varies across different electrolyzer types. A sensitivity study was also performed for the changing electricity cost, the number of operation hours per year and the plant capacity. The estimated levelized cost of methane (LCOM) in this study was less than or comparable with the existing studies available in the literature.

• Journal of Korean Institute of Industrial Engineers
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• v.23 no.3
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• pp.545-557
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• 1997

This paper deals with dynamic optimal pricing for new products by a firm which maximizes the discounted profit stream of it's own in a duopoly. The problem is constructed as differential games and dynamic optimization theory. Cost is assumed to decline as time goes on. A modified customer's choice model is formulated as a diffusion model and we solve a dynamic optimization problem by adopting the diffusion model. Since this paper focus on deriving real prices not showing a time trend, we formulate recursive form equations of costate variables(shadow price) and a simultaneous equation of price. Hence we derive a dynamic optimal pricing model for using in real market. In particular, we construct a dynamic optimal pricing model in the case that there are benefits from not only new subscribers but also previous subscribers. We analyze instant camera market in U.S.A(1976-1985) by utilizing the above model.

• Industrial Engineering and Management Systems
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• v.12 no.3
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• pp.207-223
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• 2013

Revenue management (RM) has been widely used to model products characterized as perishable. Classical RM model assumed that price is the sole factor in the model. Thus price adjustment becomes a crucial and costly factor in business. In this paper, an optimal pricing model is developed based on minimization of soft customer cost, one kind of price adjustment cost and is solved by Lagrange multiplier method. It is formed by expected discounted revenue/bid price integrating quantity-based RM and pricing-based RM. Quantity-based RM consists of two capacity models, namely, booking limit and overbooking. Booking limit, built by assuming uncertain customer arrival, decides the optimal capacity allocation for two market segments. Overbooking determines the level of accepted order exceeding capacity to anticipate probability of cancellation. Furthermore, pricing-based RM models occupancy/demand rate influenced by internal and competitor price changes. In this paper, a mathematical model based on game theoretic approach is developed for two conditions of deterministic and stochastic demand. Based on the equilibrium point, the best strategy for both hotels can be determined.

• Korean Journal of Clinical Pharmacy
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• v.28 no.2
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• pp.131-137
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• 2018

Background: In South Korea, 22.3% of women ${\geq}50years$ of age and 37% of women ${\geq}70years$ of age visit the doctor to obtain treatment for osteoporosis. According to the analysis of the National Health Insurance Services claim data between 2008 and 2012, the number and incidence of hip and vertebral fractures increased during the same period. Denosumab, a newly marketed medicine in Korea, is the first RANK inhibitor. Methods: A cost-utility analysis was conducted from a societal perspective to prove the superiority of denosumab to alendronate. A Markov cohort model was used to investigate the cost-effectiveness of denosumab. A 6-month cycle length was used in the model, and all patients were individually followed up through the model, from their age at treatment initiation to their time of death or until 100 years of age. The model consisted of eight health states: well; hip fracture; vertebral fracture; wrist fracture; other osteoporotic fracture; post-hip fracture; post-vertebral fracture; and dead. All patients began in the well-health state. In this model, 5% discounted rate, two-year maximum offset time, and persistence were adopted. Results: The total lifetime costs for alendronate and denosumab were USD 5,587 and USD 6,534, respectively. The incremental cost-effectiveness ratio (ICER) for denosumab versus alendronate was USD 20,600/QALY. Given the ICER threshold in Korea, the results indicated that denosumab was remarkably superior to alendronate. Conclusion: Denosumab is a cost-effective alternative to the oral anti-osteoporotic treatment, alendronate, in South Korea.

• Proceedings of the Society of Korea Industrial and System Engineering Conference
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• 2002.05a
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• pp.343-348
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• 2002

We are concerned with a long-term replenishment contract for the ARIMA demand process in a supply chain. The chain is composed of one supplier, one buyer and consumers for a product. The replenishment contract is based upon the well-known (s, Q) policy but allows us to contract future replenishments at a time with a price discount. Due to the larger forecast error of future demand, the buyer should keep a higher level of safety stock to provide the same level of service as the usual (s, Q) policy. However, the buyer can reduce his purchase cost by ordering a larger quantity at a discounted price. Hence, there exists a trade-off between the price discount and the inventory holding cost. For the ARIMA demand process, we present a model for the contract and an algorithm to find the number of the future replenishments. Numerical experiments show that the proposed algorithm is efficient and accurate.

• Journal of Electrical Engineering and Technology
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• v.9 no.3
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• pp.812-819
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• 2014

The proposed technical work attempts to compare the two key technologies of power distribution, i.e. direct current (DC) and alternating current (AC) in a fiscal manner. The DC versus AC debate has been around since the earliest days of electric power. Here, at least four types of a low voltage DC (LVDC) distribution are examined as an alternative to the existing medium voltage AC (MVAC) distribution with an economic assessment technique for a project investment. Besides, the sensitivity analysis will be incorporated in the overall economic analysis model to cover uncertainties of the input data. A detailed feasibility study indicates that many of the common benefits claimed for an LVDC distribution will continue to grow more profoundly as it is foreseen to arise with the increased integration of renewable energy sources and the proliferation of energy storage associated with the enhanced utilization of uninterruptible power supply (UPS) systems.

• Journal of Korean Society of Coastal and Ocean Engineers
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• v.28 no.2
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• pp.63-72
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• 2016

An expected-discounted cost model based on RRP(Renewal Reward Process), referred to as a stochastic decision model, has been developed to estimate the optimal period of in-depth inspection which is one of critical issues in the life-cycle maintenance management of harbor structures such as rubble-mound breakwaters. A mathematical model, which is a function of the probability distribution of the service-life, has been formulated by simultaneously adopting PIM(Periodic Inspection and Maintenance) and CBIM(Condition-Based Inspection and Maintenance) policies so as to resolve limitations of other models, also all the costs in the model associated with monitoring and repair have been discounted with time. From both an analytical solution derived in this paper under the condition in which a failure rate function is a constant and the sensitivity analyses for the variety of different distribution functions and conditions, it has been confirmed that the present solution is more versatile than the existing solution suggested in a very simplified setting. Additionally, even in that case which the probability distribution of the service-life is estimated through the stochastic process, the present model is of course also well suited to interpret the nonlinearity of deterioration process. In particular, a MCS(Monte-Carlo Simulation)-based sample path method has been used to evaluate the parameters of a damage intensity function in stochastic process. Finally, the present stochastic decision model can satisfactorily be applied to armor units of rubble mound breakwaters. The optimal periods of in-depth inspection of rubble-mound breakwaters can be determined by minimizing the expected total cost rate with respect to the behavioral feature of damage process, the level of serviceability limit, and the consequence of that structure.

• Asian Journal of Innovation and Policy
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• v.5 no.2
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• pp.197-207
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• 2016

This paper seeks to measure the monetary value of technical development in the deep seabed manganese nodule mining by applying the compound option model (COM). The COM is appropriate for the project in terms of its decision-making structure and embedded uncertainty. The estimation results show that the deep seabed mining project has more economic potential than shown by the previously obtained results from the discounted cash flow (DCF) analysis. In addition, it is reasonable to invest in the project taking the various uncertainty factors into consideration, because the ratio of the value to the cost of the project is far higher than one. This information can be utilized in national ocean policy decision-making.

• Management & Information Systems Review
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• v.28 no.4
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• pp.27-44
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• 2009

Economic value of a certain technology is of great interest and importance in a wide variety of investment circumstances. These vary from companies considering investing in R&D projects, to venture capitalists funding start-up companies. However, such valuation is extremely difficult in any case, and the cost of failure can be very high. Many techniques have been proposed to assist managers facing this issue, from traditional discounted cash flow analysis to more recent methods based on real options. In the meantime, the discounted cash flow method has limitations in applying the valuation of technology. At the same time, there have been various solutions to overcome theoretical problems of the method. Real options have been thought as a solution. However, there are another problems in using them in real world. This paper reviews the previous studies on the valuation of technology in several aspects, discusses the practicability of the various methods available, and explore the application of a hybrid model, which aims to make these rather aore the ideas more accessible to practicing managers.

• Journal of Korea Port Economic Association
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• v.26 no.3
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• pp.42-55
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• 2010

This paper primarily deals with a decision-making for determining the number of voyages in each ship size under a specific port structure in order to minimize the total transport cost consisting of transport cost at sea, queuing cost in port, and inventory cost in yard. As a result of computer simulation using queuing model characterized by inter-arrival time distribution, we were able to find out some combination of voyage numbers of 3 ship-size(50,000-ton, 100,000-ton, and 200,000-ton), where the total transport cost can be minimized under a specific port structure. The simulation model also allows us to figure out any trade-off relationship among sea transport cost, queuing cost in port, and inventory cost in yard. Put it differently, an attempt to reduce the sea transport cost by increasing the number of voyages of the largest ship size, the transport cost incurred in both port and yard is hypothesized to be increased and vice versa. Consequently, Port managers are required to adjust the number of annual number of voyages allocated in each ship size, put into the sea lines for importing raw materials, in order to optimize the transport costs incurred under the specific port system. We may consider a net present value(NPV) model for performing an economic feasibility analysis on port investment project. If a total discounted net benefit, including cost savings, exceeds the initial investment for an additional berth construction, then we accept the port investment project. Otherwise, we reject the proposed port investment plan.