• KDI Journal of Economic Policy
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• v.37 no.1
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• pp.1-18
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• 2015

A reduction in search costs is generally believed to make markets more competitive. However, the effect may be mitigated or amplified if consumers must pay costs for switching products. This paper investigates how search costs affect prices in the presence of switching costs using U.S. domestic airfare data for 2000-2010. The airline industry experienced a dramatic decrease in search costs with increasing Internet use in the 2000s. At the same time, the industry is known for its frequent flyer programs (FFPs), which increase switching costs for consumers. We use the average network size of airlines in a market as a proxy for switching costs related to FFPs and Internet usage as a proxy for (the inverse of) search costs. The results show that increasing Internet usage lowers airfares but that the effect is smaller for markets with a larger average network size.

• Korean Journal of Human Ecology
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• v.21 no.6
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• pp.1173-1184
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• 2012

This study estimates a structural model to examine the causal relationships among web browsing, switching cost, and site retention in the context of apparel shopping website. A total of 499 usable questionnaires were obtained from consumers aged from 20 to 49 years. For data analysis, exploratory factor analysis, confirmatory factor analysis and structural model were used. The result showed that consumer's perceived switching costs consisted of three factors: relationship cost, search cost and benefit loss cost. In estimated structural model, the relationship cost was influenced by leisure browsing; the search cost was influenced by informational browsing and leisure browsing; the benefit loss cost was influenced by leisure browsing. Especially, the leisure browsing was the most highly related to the benefit loss cost, and followed by relationship cost and search cost. However, hedonic browsing was not significantly related the factors of switching costs. The search costs significantly affected customer's intentions for site retention. A managerial implication was discussed for e-retailers in order to develop strategic switching costs in building long-term relationships with web browsers on the apparel shopping websites.

• Asia pacific journal of information systems
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• v.23 no.1
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• pp.21-43
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• 2013

Internet vendors are gradually realizing the importance of "locking-in" online customers in order to ensure profitability. Erection of switching barriers increases customers'lock-in and in turn may result in their willingness to pay price-premium for the same service. However, raising customer lock-in online is difficult because search costs are very low. Therefore, this study examines the effect of switching barriers (customer satisfaction, perceived value and relative advantage) on switching costs and the effect of switching costs on customer's willingness to pay more. Since switching costs and consequent relationships may depend upon the type of product therefore the research model in this study is examined for both search products and experience products. Data is collected through an online survey from two websites (one each for search product and experience product). The empirical results show the key role of switching costs in customers' willingness to pay more and the relationships among the four constructs. The theoretical and practical implications of this study are also discussed.

• Journal of the Korea Safety Management & Science
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• v.10 no.1
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• pp.145-153
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• 2008

The vehicle routing problem determines each vehicle routes to find the transportation costs, subject to meeting the customer demands of all delivery points in geography. Vehicle routing problem is known to be NP-hard, and it needs a lot of computing time to get the optimal solution, so that heuristics are more frequently developed than optimal algorithms. This study aims to develop a heuristic method which combines guided local search with a tabu search in order to minimize the transportation costs for the vehicle routing assignment and uses ILOG programming library to solve. The computational tests were performed using the benchmark problems. And computational experiments on these instances show that the proposed heuristic yields better results than the simple tabu search does.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.29 no.3
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• pp.62-69
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• 2006

Vehicle routing problem with time windows is determined each vehicle route in order to minimize the transportation costs. All delivery points in geography have various time restriction in camparision with the basic vehicle routing problem. Vechicle routing problem with time windows is known to be NP-hard, and it needs a lot of computing time to get the optimal solution, so that heuristics are more frequently developed than optimal algorithms. This study aims to develop a heuristic method which combines guided local search with a tabu search in order to minimize the transportation costs for the vehicle routing assignment and uses ILOG programming library to solve. The computational tests were performed using the benchmark problems.

• Journal of Korea Society of Digital Industry and Information Management
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• v.13 no.2
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• pp.27-34
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• 2017

Highly informative admissible heuristics can help to conduct more efficient search for optimal solutions. However, in general, more informative ones of heuristics from planning problems requires lots of computational effort. To address this problem, we propose an Delete Relaxation based Action Costs-based Planning Graph(ACPG) and Action Costs-based Heuristics for solving optimal planning problems more efficiently. The ACPG is an extended one to be applied to can find action costs between subgoal & goal conditions from the Relaxed Planning Graph(RPG) which is a common means to get heuristics for solving the planning problems, Action Costs-based Heuristics utilizing ACPG can find action costs difference between subgoal & goal conditions in an effective way, and then consider them to estimate the goal distance. In this paper, we present the heuristics algorithm to compute Action Costs-based Heuristics, and then explain experimental analysis to investigate the efficiency and the accuracy of the Action Costs-based Heuristics.

• IE interfaces
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• v.18 no.1
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• pp.63-72
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• 2005

In this paper, we present a distribution planning method for a supply chain. Like a typical distribution network of manufacturing firms, we have the form of arborescence. To consider more realistic situation, we investigated that an outside supplier has limited capacity. The customer demands are given in deterministic form in finite number of discrete time periods. In this environment, we attempt to minimize the total costs, which is the sum of inventory holding and backorder costs over the distribution network during the planning horizon. To make the best of the restricted capacity, we propose the look-ahead feature. For looking ahead, we convert this problem into a single machine scheduling problem and utilize tabu search approach to solve it. Numerous simulation tests have shown that the proposed algorithm performs quite well.

• Journal of Communications and Networks
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• v.16 no.4
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• pp.430-435
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• 2014

The performance of a distributed database system depends particularly on the site-allocation of the fragments. Queries access different fragments among the sites, and an originating site exists for each query. A data allocation algorithm should distribute the fragments to minimize the transfer and settlement costs of executing the query plans. The primary cost for a data allocation algorithm is the cost of the data transmission across the network. The data allocation problem in a distributed database is NP-complete, and scalable evolutionary algorithms were developed to minimize the execution costs of the query plans. In this paper, quadratic assignment problem heuristics were designed and implemented for the data allocation problem. The proposed algorithms find near-optimal solutions for the data allocation problem. In addition to the fast ant colony, robust tabu search, and genetic algorithm solutions to this problem, we propose a fast and scalable hybrid genetic multi-start tabu search algorithm that outperforms the other well-known heuristics in terms of execution time and solution quality.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.30 no.3
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• pp.44-53
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• 2007

Forming central warehouses for a number of stores can save costs in the continuous review inventory model due to economy of scale and information sharing. In this paper, transportation costs are included in this inventory model. Hence, the tradeoff between inventory-related costs and transportation costs is required. The main concern of this paper is to determine the number and location of central warehouses. Transportation costs are dependent on the distance from several central warehouses to each store. Hence, we develop an efficient simulated annealing algorithm using distance-based local search heuristic and merging heuristic to determine the location and the number of central warehouses. The objective of this paper is to minimize total costs such as holding, setup, penalty, and transportation costs. The performance of the proposed approach is tested by using some computational experiments.

• The Korean Journal of Franchise Management
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• v.13 no.3
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• pp.45-55
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• 2022

Purpose: Consumers' experience of functional attributes is remembered, and the experience lowers the cost of consumers' input from their point of view and reduces uncertainty. It also plays an important role in consumers' positive emotions and responses. Accordingly, if information search costs are reduced in terms of the costs perceived by consumers about restaurants, a strategy differentiated from other companies can be established. Therefore, this study investigated the effect of functional congruence of restaurant stores on information search cost reduction, positive/negative emotions, and loyalty. Research Design, Data, and Methodology: This study investigated functional congruence, information search cost reduction, and positive/negative emotions. The structural relationship between loyalty was analyzed. To verify this, a research hypothesis was established based on previous studies and a research model was constructed. The questionnaire items were modified and used according to the current study, based on previous studies. The data were collected using the questionnaire method from 187 people who had dining out experience. Frequency analysis was performed to confirm demographic characteristics. Reliability, convergent validity, and discriminant validity of the collected data were verified. The research model was analyzed with a structural equation modeling (SmartPLS 4). Results: The findings show that functional congruence had significant positive effects on information search cost reduction and positive emotion, but no significant effect on negative emotion. Information search cost reduction had significant positive effects on positive emotion/negative emotion but did not significantly affect loyalty. Lastly, both positive and negative emotions had significant positive effects on loyalty. Conclusion: Based on transaction cost theory, this study found how functional congruence and information search cost reduction influence consumers' emotions. The functional attributes of restaurants were perceived by customers as information, thus uncertainty was decreased. Finally, appropriate management strategies and implications of functional congruence and information search cost in the restaurant were suggested.