• Industrial Engineering and Management Systems
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• v.9 no.2
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• pp.97-106
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• 2010

Can eBay.com's fee structure coordinate the channel? It's a critical strategic problem in e-commerce operations and an interesting research hypothesis as well. eBay's fees include three parts: monthly subscription fee, insertion fee, and final value fee (i.e., a revenue sharing portion), which represent a generic form of revenue sharing fee structure between the retailer and the vendor in a supply chain. This research deals with such a channel consisting of a price-setting vendor who sells products through eBay's marketplace exclusively to the end customers. The up- and down-stream channel relationship is consignment-based revenue sharing. We use a game-theoretic approach with assumption of the retailer (i.e., eBay.com) being a Stackelberg-leader and the vendor being a follower. The Stackelberg-leader decides on the terms of revenue sharing contract (i.e., fee structure), and the follower (vendor) decides on how many units to sell and the items' selling price. This study formulates several profit-maximization models by considering the effects of the retail price on the demand function. Under such settings, we show that eBay's fee structure can improve the channel efficiency; yet it cannot coordinate the channel optimally.

• Korean Management Science Review
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• v.32 no.1
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• pp.83-100
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• 2015

We analyze a duopoly competition when two firms face input cost increases. The objective of this study is to determine the firms' optimal strategy between a price increase and downsizing under conditions of a spatially differentiated market and consumers' diminishing utility on the product size. We develop a theoretical model of two competing firms offering homogenous products using the standard Hotelling model to determine how firms' optimal strategies change when facing input cost increases. In this paper, there are two types of duopoly competitions: symmetric and asymmetric. In the symmetric case, the two firms have the same marginal cost and are producing and selling identical products. In the asymmetric case, the two firms have different marginal costs. The results show that the optimal strategy decision depends on the size of the input cost increase and the cost differences between the two firms. We find that when two firms are asymmetric (i.e., they have different marginal costs), the two firms might choose asymmetric pairs of strategies in equilibrium under certain conditions. When the cost differences between the two firms are sufficiently large and the cost increase is sufficiently small, the cost leader chooses price increase, and the cost-disadvantaged firm chooses downsizing in equilibrium. This asymmetric strategy reduces price competition between two firms, and consumers are better off. When the cost differences between the two firms are sufficiently large, downsizing is the dominant strategy for the cost-disadvantaged firm. The cost-disadvantaged firm finds it more profitable to reduce the product size than to increase its price to reduce price competition, because consumers prefer downsizing to price increases. This paper might be a good starting point for further analytical research in this area.

• Management Science and Financial Engineering
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• v.14 no.2
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• pp.13-23
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• 2008

The pricing/lot-sizing problem of determining the robust optimal order quantity and selling price is discussed. The uncertainty of parameters characterized by an ellipsoid is explicitly incorporated into the problem. An approximation scheme is proposed to transform the problem into a geometric program, which can be efficiently and reliably solved using interior-point methods.

• Journal of Korean Institute of Industrial Engineers
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• v.21 no.3
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• pp.387-396
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• 1995

For situations where there are several markets with different profit/cost structures, an economic two-sided screening procedure using a correlated variable is developed. It is assumed that the performance variable and the screening variable are jointly normally distributed. A profit model is constructed which involves selling price, cost incurred by imperfect quality, and screening inspection cost. Methods of finding the optimal screening procedure are presented and numerical examples are given.

• 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.

• Journal of Dairy Science and Biotechnology
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• v.15 no.1
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• pp.45-51
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• 1997

Korea dairy industry is placed on the very critical situation with the progression of free trade marketing system internationally. The sterilized milk or pasteurized extended shelf life milk can be considered as the international trade dairy products. Now all dairy foods would be selling in international market. To keep and improve our dairy foods market, the Korea dairy system improvement committee was inaugurated in 1995. This committee has done so many works to improve or dairy system such as the settlement of raw milk supply and demand, centralization of raw milk collection, ideal raw milk price system and dairy foods marketing structure, etc.

• The Journal of the Convergence on Culture Technology
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• v.8 no.3
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• pp.485-491
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• 2022

The traditional economic order quantity (EOQ) model is analyzed under the basic assumption that the purchase price is paid immediately upon receiving the product. However, product suppliers may allow a certain period of deferral of payment for product purchase costs in order to differentiate themselves from competitors. From the distributor's point of view, such a credit transaction can temporarily divert product purchase costs, resulting in a reduction in inventory investment costs, and ultimately, a factor that lowers the selling price for the purpose of increasing end-customer demand can be. In addition, in that credit transactions are provided for the purpose of increasing the demand of suppliers as a means of differentiation from competitors, it is more general to be allowed flexibly according to the transaction volume. In this regard, assuming that the end customer's demand is represented by a linear decreasing function of the distributor's selling price, this study analyzes a model for determining the distributor's pricing and ordering policies under order-size-dependent delay in payments. For the analysis, we also assume that the inventory is depleted not only by customer's demand but also by decaying.

• Korean Journal of Poultry Science
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• v.35 no.4
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• pp.327-333
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• 2009

In Korea chicken meat price is not determined in the auction markets, but it is artificially calculated using the live chicken price of one day before, transporting cost, converting rate of live chicken into carcass, and slaughtering cost. This calculated price is published through the mass media and used as the base for chicken meat transaction. By the way, since 85% of the Korean broiler industry is composed by the integrated system, the live chicken price is nothing to do with ex-factory price of chicken meat produced by the integrators. Under this pricing system, when we estimate the margin of the chicken meat through the marketing process, the margin of the integrator is fluctuated by the live chicken price of one day before, which is nothing to do with integrators; When the live chicken price is low, the margin of the integrators is low, but the margin of the selling agencies' is relatively high. On the contrast, when the live chicken price is high, the margin of the integrators is high, but the selling agencies' margin will be relatively low, because consumer's price could not be increased in parallel with increase of the live chicken price. Accordingly, the ex-factory price of chicken meat determined using the production cost of live chicken and slaughtering cost of the integrator by adding resonable margin of the integrator should be determined and published, so that it could be used for chicken meat transaction. In Japan the Zen-Noh Chicken Foods Corporation announce the ideal piece of chicken every morning, and all the transactions of the chicken meat will be determined based on this price. In Korea, it will be desirable to make bench marking from Japanese case, in other words the NH could announce the ideal price of chicken meat every morning, so that it would be the base price of chicken meat transaction. Even though the market share of the NH is less than 5%, its publicity should be accepted, since it is a subsidiary of the National Agricultural Cooperative Federation of Korea.

• Journal of Korean Society for Quality Management
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• v.36 no.2
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• pp.20-27
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• 2008

Tolerance design has been identified as an important research area and a number of models have been proposed in the literature. This paper investigates the effect of limited capacity on tolerance design for products with nominal-the-best type (N-type) quality characteristics. The model is developed under the assumption that the reprocessed and nonreprocessed items are produced by the same manufacturing process and therefore their quality characteristics are identically and independently distributed. Profit models are constructed which involve four price/cost components; selling price, cost incurred by imperfect quality, reprocessing and quality inspection costs. Methods of finding the optimal tolerance limits are presented, and a numerical example is given. Sensitivity analyses are also performed to study the effect of a process standard deviation on this model.

• Journal of Korean Society for Quality Management
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• v.36 no.4
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• pp.77-86
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• 2008

Due to the rapid growth in automated testing and manufacturing systems, screening inspection becomes very attractive. In this paper, we investigate the effects of limited capacity on screening inspection using a surrogate variable. The model is developed under the assumption that the reprocessed and nonreprocessed items are produced by the same manufacturing process and therefore their quality characteristics are independently and identically distributed. Profit models are constructed which involve four price/cost components; selling price, cost incurred by imperfect quality, reprocessing and quality inspection costs. Methods of finding the optimal screening limits are presented, and a numerical example is given. Sensitivity analyses are also performed to study the effect of a process standard deviation on this model.