The ICIR of Beijing Jiaotong University

Achievements

1.Optimal Order Quantity and Pricing Strategy with Free Shipping Option
Abstract:Companies, especially those in e-business, are increasingly offering free shipping to buyers whose order sizes exceed the free shipping quantity. In this paper, given that the supplier offers free shipping, we determine the retailer’s optimal order lot size and the optimal retail price. We explicitly incorporate the supplier’s quantity discount, and transportation cost into the model. We analytically and numerically examine the impacts of free shipping, quantity discount and transportation cost on the retailer’s optimal lot sizing and pricing decisions. We find that free shipping can benefit the supplier, the retailer, and the end customers, and can effectively encourage the retailer to order more of the good, to the extent of ordering a few times of the optimal order lot size without free shipping. The order lot size will increase and the retail price will decrease if the supplier offers proper free shipping.
European Journal of Operational Research》2012, 218(2): 435-441.(SCI Index)
2.Optimal Price and Order Quantity for the Newsvendor Problem with Free Shipping
Abstract:To attract and keep customers, companies, especially those in e-business, are increasingly offering free shipping to buyers whose order sizes exceed the free shipping quantity. In this paper, given the supplier offers free shipping and the retailer faces stochastic demand, we determine the retailer’s (i.e., the newsvendor’s) optimal order quantity and the optimal selling price simultaneously. We consider two different ways in which price affects the demand distribution, namely price only affects the location or scale of the demand distribution. We explicitly incorporate the supplier’s quantity discount and transportation cost into the models. The transportation cost function is very general, which includes those most commonly used in the literature. We numerically examine the impacts of free shipping, quantity discount, transportation cost, and demand variance on the retailer’s optimal order quantity and pricing decisions. We find that even though the retailer faces uncertain demand, free shipping can effectively encourage the retailer to order more of the good and can benefit the supplier, the retailer, and the end customers. An increase in transportation cost or a decrease in purchase price will induce the retailer to order more of the good and decrease the retail price. With increasing demand variance, the retailer should order more of the good. We also find that the newsvendor can cope with demand variance by taking advantage of free shipping.
International Journal of Production Economics》2012, 135(1): 162-169.(SCI Index)
3.Supplier’s Free Shipping Quantity with Price All-Unit-Discount.
Abstract:In this paper, under condition of economic order quantity model, firstly a free shipping optimal model is established to compute least order size from the supplier’s perspective, and then the model is extended to the case of the price all-unit-discount and transport costs discount. A solution method to solve the model is given. The condition under which the free shipping model can be used and how much benefit can be made is theoretical analyzed.
Chinese Journal of Management Science, 2012, 06.(CSSCI Index)
4.The Maximum Capture Per Unit Cost Location Problem
Abstract:This paper considers the problem of siting p new facilities of an entering firm to a competitive market so asto maximize the market share captured from competitors per unit cost. We first formulate the problem as a mixed 0-1 fractional programming model,in which we incorporate the fixed cost and transportation cost. The model can deal with the case where some demand nodes have two or more possible closest servers. We then re-formulate the problem as a 0–1 mixed integer linear program. We use aone-optheuristicalgorithmbasedontheTeitz–Bartmethodtoobtainfeasiblesolutionsand compare them with the optimal solutions obtained by a branch-and-bound algorithm. We conduct computational experiments to evaluate the two algorithms. The results show that both algorithms can solve the model efficiently and the model is integer-friendly. We discuss other computational results and provide managerial insights.
International Journal of Production Economics, 2011, 131(2): 568-574.(SCI Index)
5.Electronic Books: To E or not to E? A strategic analysis for distribution channel choice
Abstract:The advent of electronic books (e-books) has significantly impacted the publishing industry in recent years. The prevalence of e-books has prompted many publishers to reconsider their distribution channels for new titles. They need to decide whether to sell the e-book version of new titles. We derive the conditions under which a publisher should sell only printed books(p-books),only e-books,and both of them simultaneously. We analyze the impact of reader acceptance of e-book and the wholesale price of the counterpart p-book on the distribution channel choice of the publisher under stochastic demand. We find that only if wholesale price of p-book is high and reader acceptance of e-book is low should the publisher sell only p-books;otherwise,he should sell e-books,even when reader acceptance of e-book is low, i.e.,in most cases the publisher should sell e-books(perhaps selling p-books simultaneously). In general,the higher the reader acceptance of e-book is,the more the publisher tends to sell the e-book to readers directly. However, our analysis also shows that even when reader acceptance of e-book is very high, the publisher does not necessarily sell only e-books.The wholesale price reflects the publisher’s power of negotiation over books tores.The higher the publisher’s power of negotiation over books toresis, the more he is inclined to sell p-books; and when reader acceptance of e-book is relatively high,the lower the publisher’s power of negotiationis,the more he tends to sell only e-books.
International Journal of Production Economics, 2011, 129(2): 338-346.(SCI Index)
6.Managing Carbon Footprint in Inventory Control
Abstract:There is a broad consensus that mankind must reduce carbon emissions to mitigate global warming. It is generally accepted that carbon emission trading is one of the most effective market-based mechanisms to curb the amount of carbon emissions. This paper investigates how firms manage carbon footprints in inventory management under the carbon emission trading mechanism. We derive the optimal order quantity, and analytically and numerically examine the impacts of carbon trade, carbon price, and carbon cap on order decisions, carbon emissions, and total cost. We make interesting observations from the numerical examples and provide managerial insights from the analytical results.
International Journal of Production Economics, 2011, 132(2): 178-185.(SCI Index)
7.Price and Lead Time Decision in Dual Channel Supply Chain.
Abstract:Manufacturers today are increasingly adopting a dual channel to sell their products, i.e., the traditional retail channel and an online direct channel. Empirical studies have shown that service quality (we focus on the delivery lead time of the direct channel) even goes beyond product price as one of the major factors influencing consumer acceptance of the direct channel. Delivery lead time has significant effects on demand, profit, and pricing strategy. However, there is scant literature addressing the decision on the promised delivery lead time of a direct channel and its impact on the manufacturer’s and retailer’s pricing decisions. To fill this gap, we examine the optimal decisions of delivery lead time and prices in a centralized and a decentralized dual-channel supply chain using the two-stage optimization technique and Stackelberg game, and analyze the impacts of delivery lead time and customer acceptance of a direct channel on the manufacturer’s and retailer’s pricing behaviours. We analytically show that delivery lead time strongly influences the manufacturer’s and the retailer’s pricing strategies and profits. Our numerical studies reveal that the difference between the demand transfer ratios in the two channels with respect to delivery lead time and direct sale price, customer acceptance of the direct channel, and product type have great effects on the lead time and pricing decisions.
European Journal of Operational Research, 2010, 205(1): 113-126.(SCI Index)
8.Optimal Order Strategy with Free Shipping Option.
Abstract:Free shipping with conditions has become one of the most effective marketing tools, so more and more companies especially e-business companies become to offer free shipping to buyers whenever their orders placed exceeds the minimum quantity specified by them. In this paper, we examine the optimal order strategy of a retailer who faces deterministic or stochastic demand when suppliers offer free shipping, and analyze the impacts of the free shipping quantity and the transportation cost on the retailer’s optimal order strategy through the optimal order strategy we derived and an extensive numerical study.
Systems Engineering-Theory & Practice, 2010, 3: 506-512.(EI Index)
9.A Fractional Programming Model for International Facility Location
Abstract:This paper presents a new mixed integer non-linear fractional pro- gramming model for multi-commodity, multi-period, budget constrained and capacitated global supply chain design problem. Our model simultaneously optimizes the facility location, capacity acquisition, and production-distribution decisions so as to maximize the profitability of the total investment over a planning horizon. The model is also compared with the profit-maximization model and the cost-minimization model. A branch-and-bound method and a rounding heuristic algorithm are developed to tackle the problem at hand. The computational results of solving 30 instances generated randomly show that our proposed model differs fundamentally from the other models and the rounding heuristic algorithm provides an efficient solution.
Journal of Industrial and Management Optimization, 2009, 5(3): 629-649.(SCI Index)