Predicting price-tag for customized goods

We discuss a dynamic pricing model which will aid automobile manufacturer in choosing the right price for customer segment. Though there is oligopoly market structure, the customers get "locked" into a particular technology/company which virtually makes the situation akin to a monopoly. There are associated network externalities and positive feedback. The key idea in monopoly pricing lies in extracting the customer surplus by exploiting the respective elasticities of demand. We present a Walrasian general equilibrium approach to determine the segment price. We compare the prices obtained from optimization model with that from Walrasian dynamics. The results are encouraging and can serve as a critical factor in Customer Relationship Management (CRM) and thereby effectively manage the lock-in.

Do inventory management practices affect economic performance? An empirical evaluation of the machine tool SMEs in Bangalore

Inventory management (IM) has a decisive role in the enhancement of manufacturing industry's competitiveness. Therefore, major manufacturing industries are following IM practices with the intention of improving their performance. However, the effort to introduce IM in SMEs is very limited due to lack of initiation, expertise, and financial constraints. This paper aims to provide a guideline for entrepreneurs in enhancing their IM performance, as it presents the results of a survey based study carried out for machine tool Small and Medium Enterprises (SMEs) in Bangalore. Having established the significance of inventory as an input, we probed the relationship between IM performance and economic performance of these SMEs. To the extent possible all the factors of production and performance indicators were deliberately considered in pure economic terms. All economic performance indicators adopted seem to have a positive and significant association with IM performance in SMEs. On the whole, we found that SMEs which are IM efficient are likely to perform better on the economic front also and experience higher returns to scale.

Queuing strategies for qos management of traffic between lans interconnected by low-speed wan links

We provide a comparative performance evaluation of packet queuing and link admission strategies for low-speed wide area network Links (e.g. 9600 bps, 64 kbps) that interconnect relatively highspeed, connectionless local area networks (e.g. 10 Mbps). In particular, we are concerned with the problem of providing differential quality of service to interLAN remote terminal and file transfer sessions, and throughput fairness between interLAN file transfer sessions. We use analytical and simulation models to study a variety of strategies. Our work also serves to address the performance comparison of connectionless vs. connection-oriented interconnection of CLNS LANS. When provision of priority at the physical transmission level is not feasible, we show, for low-speed WAN links (e.g. 9600 bps), the superiority of connection-oriented interconnection of connectionless LANs, with segregation of traffic streams with different QoS requirements into different window flow controlled connections. Such an implementation can easily be obtained by transporting IP packets over an X.25 WAN. For 64 kbps WAN links, there is a drop in file transfer throughputs, owing to connection overheads, but the other advantages are retained, The same solution also helps to provide throughput fairness between interLAN file transfer sessions. We also provide a corroboration of some of our modelling results with results from an experimental test-bed.

Incentive mechanism to control customer buy-down behaviour

Airlines have successfully practiced revenue management over the past four decades and enhanced their revenue. Most of the traditional models that are applied assume that customers buying a high-fare class ticket will not purchase a low-fare class ticket even if it is available. This is not a very realistic assumption and has led to revenue leakage due to customers exhibiting buy-down behaviour. This paper aims at devising a suitable incentive mechanism that would incite the customer to reveal his nature. This helps in reducing revenue leakage. We show that the proposed incentive mechanism is profitable to both the buyer and seller and hence ensures the buyers participation in the mechanism. Journal of the Operational Research Society (2011) 62, 1566-1573. doi:10.1057/jors.2010.57 Published online 11 August 2010