Wholesale Profit Research Articles

Evaluating the impact of price caps - Evidence from the European roam-like-at-home regulation

The roam-like-at-home regulation (RLAH) eliminated all mobile roaming surcharges to European consumers traveling within Europe. We measure the causal impact of the regulation on European roaming traffic, using the Rest of the World as a control group. We find large and heterogeneous effects on retail and wholesale traffic volumes and revenues. To evaluate the welfare effects of the regulation, we develop a framework that includes consumer surplus, retail and wholesale profits. The gains in consumer surplus are large, and mainly stem from data services. The consumer gains are proportionately larger in small, open economies and in countries with previously high roaming prices. Finally, total welfare increases considerably, because the consumer surplus gains outweigh profit losses. As such, the removal of market power more than compensates for a distortion from a possible overconsumption at zero surcharges.

Evaluating the Impact of Price Caps - Evidence from the European Roam-Like-At-Home Regulation

The roam-like-at-home regulation (RLAH) eliminated all mobile roaming surcharges to Eu-ropean consumers travelling within the European Economic Area (EEA). We measure the causal impact of the regulation on EEA roaming traffic, using the Rest of the World as a control group. We find large and heterogeneous effects on retail and wholesale traffic volumes and revenues. To evaluate the welfare effects of the regulation, we develop a framework that includes consumer surplus, retail and wholesale profits. The gains in consumer surplus are large, and mainly stem from data services. The consumer gains are proportionately larger in small, open economies and in countries with previously high roaming prices. Finally, total welfare increases considerably, because the consumer surplus gains far outweigh profit losses. As such, the removal of market power more than compensates for a distortion from a possible overconsumption at zero surcharges.

Efficient Computation Resource Management in Mobile Edge-Cloud Computing

We study the computation resource management problem in mobile edge-cloud computing networks. Mobile edge servers shall first satisfy the computation requirements of mobile users and Internet of Things (IoT) devices, and then wholesale redundant computation resources to the cloud networks to maximize their profit. Due to the coarse time granularity of wholesales, computation resource buyback may happen occasionally to deal with traffic bursts. Thus, the mobile edge servers need to make a tradeoff between the wholesale profit and the buyback cost. In this paper, the computation resource management problem is modeled as profit maximization. To solve this problem, we first analyze the relationship among the reserved computation resources, the computation tasks of mobile users and IoT devices, and the buyback cost. Then, we design an efficient wholesale scheme to determine the amount of the wholesaled computation resources, by which the total expected profit of the mobile edge server can be maximized. Given the reserved computation resources, we also propose a fast-convergent realtime buyback scheme for mobile edge servers to minimize the buyback cost. Finally, the simulation results show that our proposed efficient wholesale and buyback scheme can increase the total profit while guaranteeing the computation delay of all the computation tasks, especially when the computation workloads are time-varying.

Optimization approach for increasing revenue of perishable product supply chain with the Internet of Things

PurposeThe purpose of this paper is to optimize a two-level perishable product supply chain by increasing its revenue with the Internet of Things (IoT). It particularly investigates how radio-frequency identification (RFID) technology impacts the revenue of the supply chain.Design/methodology/approachIn this paper, two revenue models were built to calculate the revenue of perishable product supply chain before and after the application of IoT to analyze the influences of IoT on perishable product supply chain. In the case study, particular data of an aquatic product supply chain were analyzed through these models which were later solved by a computer simulation method based on Colonial Competitive Algorithm, a new heuristic algorithm inspired by imperialistic competition in human society.FindingsUsing these revenue models to compare the revenues of supply chain before and after the application of IoT, this paper concludes that the application of IoT can efficiently optimize a perishable product supply chain by balancing its wholesale profits and its total costs including logistics costs, therefore, increasing its overall revenue. However, this conclusion is only applicable for large enterprises, while small enterprises are not supposed to introduce IoT due to its high cost.Originality/valueThe revenue models built in this paper can be used to evaluate the profits of supply chain and help enterprises determine how to maximize their profits and whether they should introduce IoT in a perishable product supply chain. In addition, through the analysis of case study, this paper gives several valuable suggestions to help enterprises reduce their logistics costs and increase their overall revenue.

Pricing to preclude sabotage in regulated industries

We characterize the optimal access price and retail price for a vertically-integrated incumbent supplier (V) that faces limited competition from a new entrant in the retail sector. The optimal prices provide V with a relatively high wholesale profit margin and a relatively low retail profit margin. Consequently, V has no incentive to raise the costs of its retail rival.

Towards the development of an intelligent supply contract design system

PurposeMany supply contracts are employed in practice to improve the performance of supply chains. But there is a lack of research that can offer guidance to practitioners in choosing the best supply contract among a group of popular contracts. This paper aims to fill this gap by developing an intelligent rule‐based supply contract design system for choosing the best contract and its parameters from a supplier's point of view.Design/methodology/approachThe approach used in this paper is based on the comparison of several supply contracts that are encountered in supply chain practice. The paper aims at identifying the conditions under which one supply contract outperforms another from the supplier's perspective. To facilitate the implementation of the decision‐making rules that are developed in this research, an intelligent decision support system is developed.FindingsSix popular contracts are analysed; returns policy (RP), quantity discount (QD), target rebate (TR), backup agreement (BA), quantity flexibility (QF), and quantity commitment (QC). The main findings are: QD contracts generate larger expected profits for the supplier than TR contracts do when the demand is exogenous, an RP contract is better than a QD contract when the wholesale profit margin is sufficiently large and that the optimal QC contract always provides a higher expected service level than BA and QF contracts.Originality/valueThe paper presents an approach for developing an intelligent supply contract design system that can offer guidance to practitioners in choosing the best supply contract for a particular supplier.

Friction in Related-Party Trade When a Rival Is Also a Customer

There are many circumstances in which manufacturers provide inputs to wholesale customers only to subsequently compete with these wholesale customers in the retail realm. Such dual distribution arrangements commonly suffer from excessive encroachment in that the manufacturer's ex post retail aggression is harmful ex ante because it undercuts potential wholesale profits. This paper demonstrates that with dual distribution, a manufacturer can benefit from decentralized control and the use of transfer prices above marginal cost. Although these arrangements often create coordination concerns, a moderate presence of such concerns permits the manufacturer to credibly convey to its wholesale customer that it will not excessively encroach on its retail territory. This, in turn, permits the manufacturer to reap greater wholesale profits. We also note that this force can point to a silver lining in arm's-length (parity) requirements on transfer pricing in that they can solidify commitments to a particular retail posture.

Wholesale pricing in a small open economy

This paper addresses the empirical analysis of wholesale profit margins using data of the Dutch wholesale sector, 1986. At the heart of the analysis is the typical nature of wholesale production: wholesalers do not produce a tangible product, but offer a service capacity. This has an immediate impact on the identification, interprelation and measurement of determinants of profit variations. A model is set up to explain variations in wholesale profit margins, which is inspired by two widely applied approaches to industry pricing: the behavioural mark-up model and the marginalist price-cost model.