Service Profit Research Articles

Maximizing Overall Service Profit: Multi-Edge Service Pricing as a Stochastic Game Model

Maximizing Overall Service Profit: Multi-Edge Service Pricing as a Stochastic Game Model

Pharmaceutical procurement profits and universal health coverage: Reform to a sustainable healthcare and financing system

BackgroundIn this study, using Taiwan's National Health Insurance (NHI) as an example of a single-payer system, we examined the extent of pharmaceutical procurement profits (PPP) and evaluated their impact on the financial performance of healthcare institutions. MethodsWe extracted data from financial statements and healthcare service declarations of NHI-contracted hospitals from 2015 to 2021. Financial data concerning PPP, health service profits (HSP), and total operating profits (TOP) from each hospital were analyzed. The impact of PPP on hospitals with positive and negative HSP was further investigated. ResultsThe total PPP across all hospitals studied gradually increased from NT$30.6 billion in 2015 to NT$47.0 billion in 2021. In 2021, 28.1% of all hospitals reported a deficit in HSP. PPP appeared to have a significantly positive impact on the financial performance of these hospitals. It not only enhanced positive profits, but also helped mitigate or completely offset the negative profits from HSP. The effect of PPP seems to be more pronounced for hospitals with larger HSP values, suggesting that larger hospitals benefit more from PPP in absolute terms. DiscussionAverage PPP increased during the study period, increasingly affecting hospitals’ financial stability across all strata. The gap between TOP and HSP in medical centers has gradually widened, suggesting an increase in non-health service profits. In this study, we propose a payment policy reform that fosters sustainability of the healthcare and financing system under universal health coverage and corrects the potential distortions caused by PPP.

Application of Guarantee contracts in Islamic Financial Transaction: Analysis of BNM and AAIOFI

A guarantee (Kafalah) is considered an effective Islamic finance contract aimed at providing assurance and security by having a third party; the guarantor, commit to fulfilling the financial obligations of the debtor in case of default. However, Bank Negara Malaysia (BNM) policy document considered guarantee as the term (kafālah) while the Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI) considered it as the term Damān. The term guarantee falls within the category of non-compensatory contract in classical Islamic financial contracts whereby there are no returns or compensation available for contracts like benevolence loans (Qard), gifts (Tabarru/Hibah), guarantee (Kafalah), and assignment of debt (Hawalah). In the modern financial setting, this might not fulfill one of the objectives of Islamic financial institutions to offer services for profit. This study explores the application of Guarantee (Kafalah) as a non-compensatory and noncommutative contract, falling under the category of Uqud Ghair Mua’wadha in Islamic Financial Institutions. Contracts such as benevolence loans (Qard), gifts (Tabarru/Hibah), guarantees (Kafalah), and assignment of debt (Hawalah) are characterized by the absence of return or compensation. This study uses the doctrinal approach of the qualitative method in exploring juristic meaning, justification, and implications of the shariah terms. It analyses the sustainable implication of its application in contemporary Islamic finance institutions between BNM and AAIOFI. This study found that despite the classical implication of guarantee as a non-compensatory contract guarantee contracts cannot yield a direct profit; yet can generate income through, Wakālah (agency fee), such as issuing LCs guarantees. These may be charged based on expenses incurred, potentially in amount-based (possibly slabs) but not time-based structures. The finding shows that the comparative analysis of regulatory frameworks by BNM and AAIOFI underscores the challenges of harmonizing global standards with local contexts, highlighting the necessity for ongoing dialogue and collaboration to ensure coherence and adaptability in Islamic finance regulation.

Appraising Supplier Economic Resilience in the Post-COVID Era

Resiliency is the ability to sustain growth and prosper during adverse disruptions. This translates into continuing to provide profitable service with operational efficiency amidst exceptional situations. At the very minimum, company buyers can view a supplier’s financials as that could convey the vital signs of operational stability, which is the underlying platform of resiliency. In this paper, we view a supplier as an operational process and employ process behavior analysis tools combined with analytics to decipher the operational resiliency of two competing companies. We demonstrate how one can glean operational resiliency by viewing several common financial indicators and their behavior over time. High variability in these indicators reflects a firm’s inability to deal with disturbances that may arise from systemic or external causes. In contrast, stable behavior reflects the ability to self-heal and absorb the effects of disturbances. While many more factors and indicators need to be considered to obtain an overall resiliency picture, this analysis focused on several to demonstrate the approach's potential.

Could the next generation of bike-sharing with autonomous bikes be financially sustainable?

The field of transportation has undergone changes due to the advancements in technology and the pressing need for mobility solutions. As cities worldwide struggle with the challenges posed by population growth and environmental sustainability, it becomes imperative to introduce adaptive transportation options. The increasing traffic congestion in areas and concerns regarding air quality and carbon emissions emphasize the importance of finding sustainable solutions. In this regard we present the "On demand shared use bike sharing system (OSABS)" as an eco-friendly on-demand mobility alternative that has the potential to revolutionize transportation from its core. Self-driving bikes provide a solution by reducing traffic congestion and promoting sustainable modes of transport. Customers can easily reserve a bike through their smartphones and it comes directly to their location within the given time. The user will ride it manually and release it after usage. The bike then drives autonomously to the next destination. This service allows an environment-friendly door-to-door mobility solution.This scientific paper focuses on examining the viability of autonomous cargo bike-sharing as a solution for urban transportation. A simulation model has been built to reproduce the OSABS operation using a case study for the city of Magdeburg. Through a set of experiments with different demand scenarios, we analysed and discussed the profitability and feasibility of this new service. These findings would be valuable, in the conversation about the future of transportation through providing important insights into how autonomous bike-sharing systems could be effectively implemented.

Effects of rural hospital closures on nurse staffing levels and health care utilization at nearby hospitals.

Our study examines the causal effect of rural hospital closures on nearby hospitals' nurse staffing levels and health care utilization. We use data from the 2014-2019 American Hospital AssociationSurvey on nurse staffing level outcomes including licensed practical or vocational nurses (LPNs), registered nurses (RNs), and advanced practice nurses (APNs); and health care utilization outcomes, including inpatient and outpatient surgical operations and emergency department (ED) visits. Using propensity score matchingand difference-in-differences (DID) methods, we find that rural hospital closures lead to an average increase of 37.3% in the number of nurses in nearby rural hospitals during the 4years following the closure. This increase is found across all categories of nurses, including LPNs, RNs, and APNs. We also find a substantial increase in the provision of inpatient and outpatient surgical operations but there is no change in ED visits. We do not find any effects for nearby urban hospitals. Our study suggests that a large proportion of the nursing workforce relocates to nearby hospitals after a rural hospital closure, which mitigates the negative consequences of such closures and allows these nearby hospitals to provide a larger volume of highly profitable services.

A Bibliometric Analysis: The Influence of Service Profit Chain (SPC) on the Hospitality Industry

In the hospitality industry, the service-profit chain establishes relationships between profitability, customer loyalty, employee satisfaction, loyalty, and productivity. It shows that focusing on employee engagement and customer satisfaction might boost a company's financial performance. This relates to how well the company supports and assists its employees. Several studies have empirically investigated the relationship between practices in the service profit chain and their impact on the tourism and hospitality industries. The service profit chain is based on the premise that market leadership requires an emphasis on managing value drivers that are the most important determinants of success: employee retention, employee satisfaction, and employee productivity, which have the greatest impact on success and provide the most benefit to customers. Bibliometric studies that organize production in this field, however, are still scarce. The study's goal is to analyze the influence of service profit chain practices in hospitality industry using VOSviewer software that is related to marketing. This will be achieved by analyzing articles published on the SCOPUS platform to determine state-of-the-art trends and other relevant indicators. Researcher obtained a sample of 57 materials for analysis. The author processed the data and used the VOSviewer software to graphically illustrate the results. The study examines country-wise productivity, most productive source titles, most-cited sources on the topic, top-most keyword occurrences, and yearly productivity research output trends in this area. The study findings indicate that the United States, China, Australia, Germany, India, Egypt, Malaysia, and Brazil are the most productive countries in the field of research output on the topic. The investigation also reveals that the top-most source title on the topic is “International Journal of Contemporary Hospitality Management,” and frequently used keywords are "articles,” “customer satisfaction,” and “service profit chain." On this topic, the USA is the leading country. However, research on the service profit chain and hospitality in Asia has shown that South Korea and China are the most successful countries in this field. Only the SCOPUS database contains the study's findings. The study's findings are useful for academicians, researchers, and policymakers looking for answers to the topic.

Branch-Price-and-Cut algorithms for the team orienteering problem with interval-varying profits

This paper studies the team orienteering problem (TOP), wherein each vertex requires two visits, and the service profit of each vertex depends on the time interval between these two visits. Motivated by scenarios like perishable product delivery, home health care scheduling, and earth observation satellite scheduling, the paper addresses two variants: the periodic orienteering problem with a focus on the number of days (NoDs) and the team orienteering problem with attention to a combination of time windows (CoTWs). It develops mixed-integer linear programming (MILP) models for both variants and devises exact Branch-Price-and-Cut (BPC) algorithms tailored to their block diagonal structures. Furthermore, this paper proposes two strategies to improve algorithm performance. A simplification strategy streamlines the directed graph network by removing redundant vertices and arcs without compromising optimality, thereby accelerating the solution of pricing problems. Additionally, a matheuristic algorithm is proposed to obtain integer solutions quickly. Computational results demonstrate the effectiveness of these algorithms, showcasing their superiority over CPLEX. The BPC algorithm, coupled with the simplification strategy, exhibits an average computational time reduction of 70 % compared to the basic strategy. The effectiveness of the matheuristic algorithm is also confirmed. Finally, the findings presented herein offer valuable insights for refining and applying BPC algorithms.

FINANCIAL ANALYSIS OF THE SUSTAINABILITY OF INSURANCE COMPANIES

The article examines the essence of the concept of financial stability of an insurer, conducts a financial analysis of insurance companies. The role of financial sustainability for insurers is determined, which is special because it determines the importance of ensuring a high level of financial stability and reliability of the insurer's activities. It is proved that the key factors in assessing the competitiveness of an insurance company are profitability, stability, financial strength and level of service. The factors influencing the financial stability of the insurer and the main criteria for ensuring the financial stability of the insurer are analyzed. It is found that an important criterion for ensuring the financial stability of an insurer is the availability of a balanced insurance portfolio, the formation of which is aimed at maximizing profit with minimal risk. The role of reinsurance in ensuring the financial stability of the insurer is substantiated. The investment activities of the insurer to accumulate significant financial resources are analyzed

Exploring the Association Between Bilibili's Post-IPO Quarterly Stock Price and Multivariate Factors: A Multiple Linear Regression Analysis

This research delves into the intricate dynamics of stock price movements for Bilibili, a prominent digital platform, post its Initial Public Offering (IPO). Emphasis is placed on evaluating the correlation and predictive power of three main factors, Gross Profit, Advertising Revenue, and Additional Services Revenue, in determining stock prices. Furthermore, the study examines the often-assumed positive relationship between Average Monthly Interactions (AMI) and Gross Profit, questioning the depth and directionality of this relationship. Preliminary findings suggest that while Gross Profit and Advertising Revenue may historically be substantial revenue streams impacting stock prices, revenues from additional services are emerging as significant predictors in the contemporary digital platform valuation landscape. Contrary to conventional belief, high AMI does not always translate to proportional Gross Profit gains. The research presents valuable insights for investors, stakeholders, and digital platform operators, elucidating the multifaceted drivers of stock price movements in the digital age.

Online battery scheduling for enhanced profitability and longevity in pay-for-performance frequency regulation markets

Batteries participating in frequency regulation (FR) markets earn revenue at the expense of longevity. The declining reward prices and highly stochastic automatic generation control (AGC) signals with short update intervals necessitate research into aging-aware real-time FR strategies for the battery. To address these challenges, this paper develops an online battery dispatch strategy based on Lyapunov optimization, accounting for Ah-throughput, C-rate, and temperature aging effects to enhance the service profitability of the battery. The strategy operates independently of probabilistic data from random processes, with its optimality gap inversely correlated with the control parameter. A systematic and intuitive approach is established for constructing virtual queues and determining the maximum feasible parameter. The proposed method is validated through extensive numerical simulations using actual lithium-ion battery aging data, along with year-long regulation signal and market price data from Pennsylvania-New Jersey-Maryland (PJM). Results show that the strategy can extend the battery lifespan by 83.41% and increase the net present value (NPV) by 172.67% compared to the conventional Ah-based strategy.

Analisis Keuntungan Rumah Makan Muslim Ummi Hidayah Di Kawasan Boulevard Tondano Kabupaten Mianahasa

This study aims to analyze the business profits of Ummi Hidayah Restaurant in the Tondano Boulevard Area, Minahasa Regency. The data used in this study are primary data and secondary data, data collection techniques used using descriptive analysis, namely analyzing, describing, and interviews. Data analysis used is using the calculation of costs, revenues and profits. Based on the results of the study, it is obtained that the amount of profit of the ummi hidayah Muslim restaurant business in the Tondano boulevard area can be categorized as a profitable business with a service profit and total revenue of Rp17,860,046 per month.

US Hospital Service Availability and New 340B Program Participation

The US 340B Drug Pricing Program enables eligible hospitals to receive substantial discounts on outpatient drugs to improve hospitals' financial sustainability and maintain access to care for patients who have low income and/or are uninsured. However, it is unclear whether hospitals use program savings to subsidize access as intended. To evaluate whether the 340B program is associated with improvements in access to hospital-based services and to test whether the association varies by hospital ownership. Difference-in-differences and cohort analysis from 2010 to 2019. Never and newly participating 340B general, acute, nonfederal hospitals in the US using data from the American Hospital Association's Annual Survey of Hospitals merged with hospital and market characteristics. Data were analyzed from January 1, 2023, to January 31, 2024. New enrollment in 340B between 2012 and 2018. Total number of unprofitable service lines, ie, substance use, psychiatric (inpatient and outpatient), burn clinic, and obstetrics services; and profitable services, ie, cardiac surgery and orthopedic, oncologic, neurologic, and neonatal intensive services. The study sample comprised a total of 2152 hospitals, 1074 newly participating and 1078 not participating in the 340B program. Participating hospitals were more likely than nonparticipating hospitals to be critical access and teaching hospitals, have higher Medicaid shares, and be located in rural areas and in Medicaid expansion states. At public hospitals, participation in the 340B program was associated with a significant increase in total unprofitable services (0.21; 95% CI, 0.04 to 0.38; P = .02) and marginal increases in substance use (5.4 percentage points [pp]; 95% CI, -0.8 pp to 11.6 pp; P = .09) and inpatient psychiatric (6.5 pp; 95% CI, -0.7 pp to 13.7 pp; P = .09) services. Among nonprofit hospitals, there was no significant association between 340B and service offerings (profitable and unprofitable) except for an increase in oncologic services (2.5 pp; 95% CI, 0.0 pp to 5.0 pp; P = .05). The finding of the cohort study indicate that participation in the 340B program was associated with an increase in unprofitable services among newly participating public hospitals. Nonprofit hospitals were largely unaffected. These findings suggest that public hospitals responded to 340B savings by improving patient access, whereas nonprofits did not. This heterogeneous response should be considered when evaluating the eligibility criteria for the 340B program and how it affects social welfare.

Service quality improvement strategies of online car-hailing based on SPC-PCN method

Online car-hailing service is practicing the concept of sharing, bringing new energy and convenience to the transportation market. However, with its rapid development, service issues have become increasingly prominent, and improving service quality is the key to the sustainable growth of the online ride-hailing industry. Microblog, as a major online platform for gathering public views, have become one of the significant media for publishing and disseminating information nowadays, which also contains numerous views of online taxi users on online taxi services. Aiming at the deficiency of online car-hailing service under microblog public opinion, this paper integrates Service Profit Chain (SPC) and Process Chain Network (PCN) from the perspective of service management. Firstly, a crawler program is used to collect the Internet Word of Mouth data related to online taxi. Then, a BERT text classification model is constructed to roughly classify the data, and the accuracy of this model is tested to 94.54 %. Afterwards, layer segmentation is implemented based on SPC and CatBoost. Besides, a series of problems in the current online taxi service, such as poor attitude of drivers, unsafe driving, and inefficient communication with the customer service staff, have been identified by using sentiment analysis and frequent mining methods. Finally, PCN analysis is used to optimize the online taxi service, proposing strategies such as setting a reservation reminder function, building a dynamic feedback mechanism, and establishing a contact point for lost and found items. The new SPC-PCN online taxi service system constructed in this paper is vital for service quality optimization, and can also promote the sustainable growth of the online taxi market.

Influence of Service Quality on Customer Loyalty in Luxury Hotel Chains in Tanzania

Purpose: The aim of the study was to assess the influence of service quality on customer loyalty in luxury hotel chains in Tanzania. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study indicated a strong correlation between the two factors. High service quality consistently leads to increased customer loyalty within this segment of the hospitality industry. Studies have revealed that luxury hotel guests place significant emphasis on personalized service, attention to detail, and exceptional experiences. When these expectations are consistently met or exceeded, guests are more likely to exhibit loyalty behaviors, such as repeat visits, positive word-of-mouth recommendations, and a willingness to pay premium prices. Additionally, service quality has been found to play a crucial role in shaping guests' perceptions of value and satisfaction, which further contributes to their loyalty. Consequently, luxury hotel chains that prioritize and maintain high levels of service quality are better positioned to foster long-term relationships with their clientele and achieve sustainable competitive advantage in the market. Implications to Theory, Practice and Policy: Expectancy-disconfirmation theory, service profit chain theory and relationship marketing theory may be used to anchor future studies on assessing influence of service quality on customer loyalty in luxury hotel chains in Tanzania. Practitioners in luxury hotel chains can leverage the empirical findings to inform strategic decision-making and enhance service delivery. Policymakers and industry stakeholders can utilize the empirical evidence to advocate for policies that support service quality enhancement initiatives within luxury hotel chains.

Analysis of the Effect of E-Recovery Service Quality and E-Service Quality on E-Customer Satisfaction and E-Customer Royalty

The impact of today’s electronic commerce has changed people’s mindset in ordering, buying, and paying for products in an easier and more affordable form. To find a high sense of satisfaction and loyalty from customers to continue using e-commerce as a personal or profitable group service and its performance is getting faster and easier and has a loyal customer base, indirectly contributing to e-commerce companies. This study uses a literature review to later be able to provide a lot of analysis from previous studies. The first step in gathering secondary data is to conduct a literature study, which includes reading, making notes, and processing information found in the literature search results. The characteristics that are related to each other are derived from prior research on customer satisfaction and loyalty in the e-commerce industry, specifically: 1. E-Service Quality (X1), 2. E-Recovery Service Quality (X2), 3. E-Customer Satisfaction (Y1), 4. E-Customer Loyalty (Y2). With the increase in internet users, the shift in people’s purchasing culture from offline to online has increased in business opportunities in the e-commerce sector. Constant innovation by retail companies and the competition among traders is seen to be growing.
 Keywords: e-service quality, e-recovery service quality, e-customer royalty, e-customer satisfaction

Integrated optimisation of strategic planning and service operations for urban air mobility systems

With the rapid development of novel vehicle technologies, electric vertical take-off and landing (eVTOL) vehicles are becoming a new transport servicing model to achieve better urban air mobility (UAM) systems. The UAM systems can efficiently utilise low-altitude airspace resources, providing a solution to alleviate congestion in urban ground traffic. This paper delves into an integrated optimisation problem aimed at addressing decision-making processes related to the strategic planning and service operation of UAM systems, considering both demand uncertainty and spatial equity. The problem encompasses various decision components, including parking stand numbers at vertiports and vertistops, eVTOL fleet sizing as well as eVTOL fleet allocation and operations. Additionally, we introduce a spatial equity metric and establish a bi-objective optimisation model to balance the trade-off between service profitability and spatial equity considerations. We transform the bi-objective optimisation model to a tractable single-objective formulation using ε-constraint approach and linearisation technique. In this paper, we employ a scenario-based robust optimisation framework that incorporates the interval robust method to capture the demand uncertainty, enhancing resilience against uncertain factors. We evaluate the model performance using a small-scale example and further validate the proposed model through a real-world case study. Numerical analysis results demonstrate that the scenario-based robust optimisation framework can ensure the robustness of decision-making against the effect of uncertain conditions. Furthermore, numerical experiments reveal a trade-off between profitability and spatial equity, potentially requiring a partial sacrifice of profit to attain a desired equity level. Finally, we propose valuable policy recommendations to guide the decision-making processes of UAM service providers.

Dissecting the visiting willingness of driving visitors facing a retail market's dual-pricing policy for parking

This study explores the significant elements in driving visitors’ mind while their willingness to visit (WTV) is formed and affected by the dual-pricing policy announced by a retail market. The aim is to investigate the upper (maximally durable) and lower (minimally suggestible) bounds of the hourly parking fee rate (p) and the minimum spending in the marketplace required to receive an hour of free parking (s). Additionally, the perceived importance of p in relation to s (represented by z*) is examined, as both p and s have a “cost price” to visitors who drive and can impact their WTV. The proposed hybrid approach incorporates popular methods such as revealed/stated-preference survey, complete case study, multiple linear regression, simultaneous equation system, and several approaches for model verification. A truth-lossless questionnaire design is implemented to augment the sample, and several interesting findings are obtained from a shopping center empirically based on the survey results, e.g., z* has an approximate ratio of 4:1 in the cultural area investigated. Further insights and implications are justified in terms of transportation pricing, operations management, and consumer psychology. For instance, several market-segmentation strategies are suggested for managing certain consumer groups using either pricing measure or both, and the accurate parameters investigated, estimated or inferred also allow establishing a grounded WTV function for decision-making. These ensure the delivery of satisfactory and profitable parking services for the retail industry.

The effects of dynamic learning and the forgetting process on an optimising modelling for full-service repair pricing contracts for medical devices

In order to improve the profitability and customer service management of original equipment manufacturers (OEMs) in a market where full-service (FS) and on-call service (OS) co-exist, this article extends the optimising modelling for pricing FS repair contracts with the effects of dynamic learning and forgetting. Along with considering autonomous learning in maintenance practice, this study also analyses how induced learning and forgetting process in a workplace put impact on the pricing optimising model of FS contracts in the portfolio of FS and OS. A numerical analysis based on real data from a medical industry proves that the enhanced FS pricing model discussed here has two main advantages: (1) It could prominently improve repair efficiency, and (2) It help OEMs gain better profits compared to the original FS model and the sole OS maintenance. Sensitivity analysis shows that if internal failure rate increases, the optimised FS price rises gradually until reaching the maximum value, and profitability to the OEM increases overall; if frequency of induced learning goes up, the optimal FS price rises after a short-term downward trend, with a stable profitability to the OEM.

Research on the Modeling of Automatic Pricing and Replenishment Strategies for Perishable Goods with Time-Varying Deterioration Rates

This paper focuses on the modeling of automatic pricing and replenishment strategies for perishable products with time-varying deterioration rates based on an improved SVR-LSTM-ARIMA hybrid model. This research aims to support supermarkets in planning future strategies, optimizing category structure, reducing loss rates, and improving profit margins and service quality. Specifically, the paper selects perishable vegetables as the research category and calculates the cost-plus ratio for each vegetable category. Correlation analysis is conducted with total sales, and a non-parametric relationship curve is obtained using support vector regression for nonlinear fitting. The long and short memory recurrent neural network is then used to predict sales volume, and a pricing strategy is calculated based on the fitting curve. Additionally, the paper establishes a correlation between loss rate and shelf life, corrects the daily average sales volume index, and solves the problem of quantity and category of replenishment using a backpack problem approach. By considering multiple constraints, a quantitative category replenishment volume and pricing strategy is obtained. The mathematical model proposed in this paper addresses the replenishment and pricing challenges faced by supermarkets, aiming to improve revenue and reduce loss while meeting market requirements.