Recognizing the inadequacy of traditional cost/benefit analysis for evaluating information technology (IT) infrastructure projects, research in technology investment suggests the efficacy of taking a real options perspective for evaluating such projects[11, 24]. Option pricing methods (OPMs) help management properly evaluate the opportunities created by IT investments, and are suitable for asse...

Policymakers could implement available, well-tested technologies to improve the efficiency of highway pricing, investment, and operations, which would improve travel speeds, reliability, and safety and reduce highway expenditures. Unfortunately, political and bureaucratic impediments to implement such technology exist and are unlikely to be overcome in the near future. However, technological in...

District heating pricing is a core element in reforming the heating market. Existing district heating pricing methods, such as the cost-plus pricing method and the conventional marginal-cost pricing method, cannot simultaneously provide both high efficiency and sufficient investment cost return. To solve this problem, the paper presents a new pricing model, namely Equivalent Marginal Cost Prici...

This paper studies pricing strategies of a monopolist when customers are strategic and infer the product quality from historical sales and price paths. This behavior may be expected when selling a new, innovative product whose quality is unknown and customers have some, but, imperfect information about the product quality. The monopolist can sell a finite amount of inventory during a finite hor...

We use the concept of time-consistent coherent risk measure to study a risk-averse firm’s inventory and price control activities. The model calls for worst-case analysis over a convex set of demand-distribution scenarios in every period. Structural characterization for an optimal inventory policy reminiscent of the risk-neutral counterpart is easy to achieve. More interestingly, mild monotone p...

In this study, we apply an integrated land use and transportation model, the Sacramento MEPLAN model, to evaluate transit investment alternatives combined with supportive land use policies and pricing polices in the Sacramento region. Highway investment alternatives are simulated as well for purposes of comparison. The application of the Sacramento MEPLAN model is relatively advanced because th...

In this study, we apply an integrated land use and transportation model, the Sacramento MEPLAN model, to evaluate transit investment alternatives combined with supportive land use policies and pricing polices in the Sacramento region. Highway investment alternatives are simulated as well for purposes of comparison. The application of the Sacramento MEPLAN model is relatively advanced because th...

In many industrial settings, managers face the problem of establishing a pricing policy that maximizes the revenue from selling a given inventory of items by a fixed deadline, with the full inventory of items being available for sale from the beginning of the selling period. This problem arises in a variety of industries, including the sale of fashion garments, flight seats, and hotel rooms. We...

We study a joint inventory and pricing problem in a single-stage system with a positive lead time. We consider both additive and multiplicative demand forms. This problem is, in general, intractable due to its computational complexity. We develop a simple heuristic that resolves this issue. The heuristic involves a myopic pricing policy that generates each period’s price as a function of the in...

This paper addresses the problem of inventory penalty pricing under the risk-neutral valuation principle. The underlying production-inventory system has a constant replenishment rate and a compound renewal demand stream (i.e., iid demand interarrival times are independent of iid demand sizes), and is subject to underage and overage penalties. Our pricing approach treats the penalties as a serie...