• Journal of Distribution Science
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• v.11 no.4
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• pp.61-72
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• 2013

Purpose - It is widely accepted that the process of developing marketing strategy is composed of three steps: market segmentation, target market selection and positioning. However, mass marketing strategy based on cost reduction through economies of scale and standardized products, can be also an effective strategic option. Many marketing scholars including Theodore Levitt emphasize the importance of applying the mass production concept to various industries including service industries. Especially, in times of economic downturn, the capability of providing consumers with low-priced, value products can be an important source of competitive advantage, as well as the ability of providing high-priced premium products. Marketers should decide whether they will implement mass marketing strategy or target marketing strategy. The present study theoretically shows that firms should understand the target customers' price elasticity as well as the firm's cost structure in order to make such a strategic decision. Research design, data, and methodology - Instead of implementing an empirical study, this study provides a theoretical(mathematical) investigation on the effect of consumers' price elasticity on a firm's optimal price level, profit, sales volume, revenue, and cost. The results are mostly deduced from derivative calculations and several graphs are utilized to represent the results on the relationships between the variables under study. Results - The analytical results suggest that it is more profitable for a firm to adopt the segment/target marketing strategy (more specifically the differentiation strategy) when the degree of consumers' heterogeneity is high and the proportion of the fixed cost in the total cost is low. On the other hand, if the degree of consumers' heterogeneity is low and the fixed cost is high, it is better to adopt the mass marketing strategy or the cost leadership strategy. The strategy of concentrating on a single target market will be effective when consumers' needs are highly heterogeneous but the fixed cost is high. Any of the three types of generic strategies proposed my Porter(1980, 1985) can be applied when both the consumers' heterogeneity and the fixed cost are low. This study also proposes the contribution-margin-based method for developing the optimal pricing strategy. Conclusions - One of the primary roles of marketers is to find a proper compromise between the two conflicting goals of maximizing customer satisfaction and minimizing cost. In order to do so, he or she should understand the characteristics of the target customers as well as the cost structure of the firm. In addition to the theoretical analyses, this study discusses several business cases and explains how superior companies find the optimal compromise position between these two goals and dominate the market. One of the radical changes recently taking place in business arena is the reduction of production and distribution costs of both physical goods and information due to the advancement and the wide diffusion of information technology. The cost reduction combined with lowered priced elasticity incurred by customized products and services, will enable many firms to adopt the mass customization strategy.

• Korean Journal of Agricultural Science
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• v.31 no.2
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• pp.149-160
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• 2004

This study had carried out an analysis of leaf tobacco production cost by cost items, growing stages, and farm sizes per 10a to provide the basic data for determination of the purchasing price of leaf tobacco by KT&G. Considering the survey results of 12 tobacco farm households, the composition rates of production cost by items revealed as 7-10% for land service, 5-22% for depreciation, 13-25% for material costs, 50-65% for labour cost respectively. The production cost of leaf tobacco by growing stages were shown as 15.3% in nursery bed period, 32.3% in main growing period in field, 30.8% in harvesting period and 21.6% in packing period. The magnitude of wage expenditure was appeared as harvesting stage, packing stage, growing stage on main field and nursery bed stage in order. The amount of material costs were revealed as the growing stage in main field, harvesting stage, nursery bed stage and packing stage respectively. The production costs of leaf tobacco per 10a by farm sizes were shown as 1,615,879won for small farm, 1,446,896won for medium farm and 1,454,408won for large farm respectively. The production cost of leaf tobacco had shown decreasing tendency according to increasing farm sizes. To promote the international market competitiveness of leaf tobacco producing farms, labour saving production technologies and cost effective farm size to decrease tobacco production cost should be developed.

• Korean Journal of Construction Engineering and Management
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• v.2 no.2 s.6
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• pp.90-97
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• 2001

The paper considers non-deterministic methods of analysing the risk exposure in a cost estimate. The method(referred to as the 'Monte Carlo simulation' method) interprets cost data indirectly, to generate a probability distribution for total costs from the deficient elemental experience cost distribution. The Monte Carlo method is popular method for incorporating uncertainty relative to parameter values in risk assessment modelling. Non-deterministic methods, they are here presented as possibly effective foundation on which to risk management in cost estimating. The objectives of this research is to develop a computerized algorithms to forecast the probabilistic total construction cost and the elemental work cost at the planning stage.

• Corrosion Science and Technology
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• v.7 no.5
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• pp.259-264
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• 2008

A national consultative project entitled "corrosion cost survey in China and preventive strategies" was funded by the Chinese Academy of Engineering in 1998. Soon afterwards, an expert group was organized jointly by the Institute of Metal Research, CAS and Chinese Society of Corrosion and Protection. The report on corrosion cost survey in China was published in 2003. According to this report the overall annual corrosion cost in China estimated by the Uhlig Method and Hoar Method at 1997-2001 was found to be 200.7 billion Yuan RMB and 228.8 billion Yuan RMB respectively, which is equivalent to 2% of the gross national product of China. However the total cost of corrosion including the direct and indirect cost was estimated to be more than 500 billion Yuan RMB per year in China. Among them, corrosion cost of infrastructure ranked in first comparing with other sectors. Although corrosion costs in some sectors, such as electric power, petrochemical, oil pipeline and railway in China has reduced in the past years, significant losses are still being encountered in most sectors of industries and cost-effective methods have not always been implemented. Both successful and unsuccessful cases in corrosion control and corrosion management were collected. As the investment in capital construction continues increasing rapidly in China, the maintenance and life extension of the infrastructures will become a big issue. The preventive strategies have been suggested

• International Journal of Advanced Culture Technology
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• v.8 no.1
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• pp.62-70
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• 2020

As an effective means of price discrimination, some suppliers offer trade credit to the distributors in order to stimulate the demand for 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. Since the distributor's lot-size is affected by the demand for the customer, the distributor's lot-size and the selling price determination problem is interdependent and must be solved at the same time. Also, in many common business transactions, 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. In this regard, we deal with the joint lot-size and price determination problem when the supplier allows delay in payments for an order of a product. The positive effects of credit transactions can be integrated into the EOQ (economic order quantity) model through the consideration of retailing situations, where the customer's demand is a function of the distributor's selling price. It is also assumed that the distributor's order cost consists of a fixed ordering cost and the variable shipping cost. We formulate the distributor's mathematical model from which the solution algorithm is derived based on properties of an optimal solution. A numerical example is presented to illustrate the algorithm developed.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 1994.04a
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• pp.561-568
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• 1994

A man model can be used as an effective tool to design ergonomically sound products and workplaces, and subsequently evaluate them properly. For a man model to be truly useful, it must be integrated with a posture prediction model which should be capable of representing the human arm reach posture in the context of equipments and workspaces. Since the human movement possesses redundant degrees of freedom, accurate representation or prediction of human movement was known to be a difficult problem. To solve this redundancy problem, a psychophysical cost function was suggested in this study which defines a cost value for each joint movement angle. The psychophysical cost function developed integrates the psychophysical discomfort of joints and the joint range availability concept which has been used for redundant arm manipulation in robotics to predict the arm reach posture. To properly predict an arm reach posture, an arm reach posture prediction model was then developed in which a posture configuration that provides the minimum total cost is chosen. The predictivity of the psychophysical cost function was compared with that of the biomechanical cost function which is based on the minimization of joint torque. Here, the human body is regarded as a two-dimensional multi-link system which consists of four links ; trunk, upper arm, lower arm and hand. Real reach postures were photographed from the subjects and were compared to the postures predicted by the model. Results showed that the postures predicted by the psychophysical cost function closely simulated human reach postures and the predictivity was more accurate than that by the biomechanical cost function.

• Journal of the Korean Institute of Illuminating and Electrical Installation Engineers
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• v.21 no.3
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• pp.82-87
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• 2007

This paper measures power quality of bus in case electric charges about customer are imposed by each bus, supposed that can calculate this cost. When reflected this in system planning, expected cost proposed following method through sample system. To calculate nodal cost operating condition of power equipment calculates nodal cost[$/MVAH] supposing by situation that is optimized by OPF(optimal power flow) in system. The damage cost that is shed by fault that happen during year of loads in system that is linked on each bus was produced. As a result, proposed method was very effective in case of calculating bus total cost including power quality cost.

• Journal of the Korea Safety Management & Science
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• v.17 no.1
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• pp.321-335
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• 2015

This study introduces the methods to apply and develop the integrated Cost of Quality (COQ) and Time-Driven Activity-Based Costing (TDABC) model for seeking not only quality improvement but also reduction of overhead cost. Inefficient and uneconomical COQ activities can be identified by using time driver which also maximizes the quality improvement for Prevention-Appraisal- Failure (PAF) quality costs. In contrast, reduction of the indirect cost of unused capacity resource using Quality Cost Capacity Ratio (QCCR) of TDABC minimizes overhead cost for COQ activities. In addition, linkage between Overall Equipment Effective (OEE) and Time Driver develops the integrated system of Total Productive Maintenance (TPM) and TDABC model. Lean OEE maximizes when an Unused Time (UT) of TDABC that are TPM losses and lean wastes reduces whereas the TPM Cost Capacity Ratio (TCCR) of TDABC minimizes indirect cost for non-value added TPM activities. Numerical examples are derived to better understand the proposed COQ/TDABC model and TPM/TDABC model from this paper. From the proposed model, process mapping and time driver of TDABC are known to lessen indirect cost from general ledger of comprehensive income statement with a better quality innovation and improvement of equipment.

• Journal of the Korea institute for structural maintenance and inspection
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• v.6 no.4
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• pp.189-199
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• 2002

This study is intended to propose a systematic procedure for the development of the conditional assessment based on the safety of structures and the cost effective performance criteria for designing and upgrading of bridge structures. As a result, a set of cost function models for a life cycle cost analysis of bridge structures is proposed and thus the expected total life cycle costs (ETLCC) including initial (design, testing and construction) costs and direct/indirect damage costs considering repair and replacement costs, human losses and property damage costs, road user costs, and indirect regional economic losses costs. Also, the optimum safety indices are presented based on the expected total cost minimization function using only three parameters of the failure cost to the initial cost (${\tau}$), the extent of increased initial cost by improvement of safety (${\nu}$) and the order of an initial cost function (n). Through the enough numerical invetigations, we can positively conclude that the proposed optimum design procedure for bridge structures based on the ETLCC will lead to more rational, economical and safer design.

• International conference on construction engineering and project management
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• 2022.06a
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• pp.640-648
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• 2022

In the United States, the Safety Rest Areas (SRAs) were introduced as highway roadside infrastructures in the early 1900s. The State Departments of Transportation (DOTs) operate/maintain their SRAs using different methods. The Washington DOT used the in-house workforce method for over 20 years, whereas some states moved to Performance-Based Contracting (PBC) from the in-house workforce to save cost primarily. Several existing studies claimed that using the PBC approach saved costs on several highway assets. Thus, the principal objective of this study is to compute and compare the unit operating/maintenance cost of SRAs using the in-house workforce method (in Washington state) with the PBC approach (in other states). The findings of this study show that the average annual cost using the PBC approach was much more than the average annual cost using the in-house workforce approach. The findings also show that in Washington state, the 'Labor Cost' category was a key expenditure, which is statistically higher than other categories. The 'Labor Cost' was followed by the 'Other Services', and then 'Materials and Supplies' and 'Equipment.' The study's findings indicated that outsourcing does not always save costs for agencies. The study findings may help transportation construction/maintenance professionals select a cost-effective approach for their future planning.