This paper has made several contributions to the research literatures with respect to warehouse sizing and pricing. Firstly, two space pricing policies, namely constant pricing policy and dynamic pricing policy, are compared. The dynamic pricing
policy helps to reduce the whole group company’s total cost. It suggests that the group company should implement the dynamic pricing policy if its objective is to control the cost. Secondly, the necessity of the implementation of the leased
space is studied. The numerical results show that the HQ-CDC promotes the subsidiaries to lease more space rather than to reserve space especially in face of large demand and high demand fluctuation. For future research, the headquarter-centered warehousing management framework introduced in this paper could be extended to several decision models to study the decisions in the HQ-CDC and the subsidiaries. For example, the Nash Game model, the Stackelberg Game model (Bilevel Programming Model) and the Integrated model could be compared. The analytical solutions may be developed to achieve more accurate results, but the mathematical models may have to be with easier structure or tighter assumptions
This paper has made several contributions to the research literatures with respect to warehouse sizing and pricing. Firstly, two space pricing policies, namely constant pricing policy and dynamic pricing policy, are compared. The dynamic pricingpolicy helps to reduce the whole group company’s total cost. It suggests that the group company should implement the dynamic pricing policy if its objective is to control the cost. Secondly, the necessity of the implementation of the leasedspace is studied. The numerical results show that the HQ-CDC promotes the subsidiaries to lease more space rather than to reserve space especially in face of large demand and high demand fluctuation. For future research, the headquarter-centered warehousing management framework introduced in this paper could be extended to several decision models to study the decisions in the HQ-CDC and the subsidiaries. For example, the Nash Game model, the Stackelberg Game model (Bilevel Programming Model) and the Integrated model could be compared. The analytical solutions may be developed to achieve more accurate results, but the mathematical models may have to be with easier structure or tighter assumptions
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