In natural gas markets, demand exhibits low price elasticity, while supply follows the market price; a phenomenon typically observed in markets for indispensable goods. A significant portion of gas consumption is due to heating and increasingly power generation, which sets a typical demand pattern: high in winter and summer ('high' seasons) and low in shoulder months ('low' seasons). Thus, the ...

T paper analyzes the optimal procurement, processing, and production decisions of a meat-processing company (hereafter, a “packer”) in a beef supply chain. The packer processes fed cattle to produce two beef products, program (premium) boxed beef and commodity boxed beef, in fixed proportions, but with downward substitution of the premium product for the commodity product. The packer can source...

a r t i c l e i n f o JEL classification: C13 C32 G14 Keywords: Futures price Spot price Chinese commodity market Frequency domain approach Garbade–Silber Model This paper presents the causal relationships between futures and spot prices of six metal and agriculture commodities in Chinese commodity market, using GC test, frequency domain approach proposed by Brietung and Candelon (2006) and Gar...

All decisions about investments in new generation, transmission, distributed energy resources and load management are based on expectations about future market conditions. This paper develops an analytical framework for evaluating forward contracts and investment decisions under the assumption that firms are risk averse. A fixed price/fixed quantity delivery contract forms the basis for the por...

This paper investigates the effect of information updating on the members of a two-stage supply chain in the presence of spot market. The supplier decides the contract price. New information becomes available as time progresses. The manufacturer updates his belief on demand and/or spot price and subsequently decides the contract quantity. The demand and spot price are correlated. Thus, the new ...

In late 2009, Amazon introduced spot instances to offer their unused resources at lower cost with reduced reliability. Amazon’s spot instances allow customers to bid on unused Amazon EC2 capacity and run those instances for as long as their bid exceeds the current spot price. The spot price changes periodically based on supply and demand, and customers whose bids exceed it gain access to the av...

Amazon’s Elastic Compute Cloud (EC2) uses auction-based spot pricing to sell spare capacity, allowing users to bid for cloud resources at a highly-reduced rate. Amazon sets this spot price dynamically and accepts user bids above this price. Jobs with lower bids (including those already running) are interrupted and must wait for a lower spot price before resuming. We answer two basic questions f...

Though wireless spectrum is an untangible resource, it is typically assigned through licenses on a long-term basis and may be likened to a property of the licensee. The possibility to lease it temporarily through a secondary market makes it a virtualizable resource, exploitable by virtual operators. A crucial issue for the business propositions of virtual operators is spectrum pricing. Spectrum...

This paper addresses quantity risk in the electricity market and explores several ways of managing such risk. The paper also addresses the hedging problem of a load-serving entity, which provides electricity service at a regulated price in electricity markets with price and quantity risk. Exploiting the correlation between consumption volume and spot price of electricity, an optimal zero-cost h...

This paper presents an analysis of how day-ahead electricity spot prices are affected by day-ahead wind power forecasts. Demonstration of this relationship is given as a test case for the Western Danish price area of the Nord Pool’s Elspot market. Impact on the average price behaviour is investigated as well as that on the distributional properties of the price. By using a non-parametric regres...