Indirect Revenue Maximization, Indirect Cost Minimization and Profit Maximization

1994 ◽  
pp. 63-87
Author(s):  
Rolf Färe ◽  
Shawna Grosskopf
Keyword(s):  
Indirect Cost ◽  
Cost Minimization ◽  
Profit Maximization ◽  
Revenue Maximization

Squiggly Economics

2020 ◽  
pp. 87-122
Author(s):  
Robert G. Chambers
Keyword(s):  
Optimization Problems ◽  
Cost Minimization ◽  
Profit Maximization ◽  
Relevant Information ◽  
Revenue Maximization ◽  
Conjugate Duality ◽  
Economic Optimization ◽  
Duality Results ◽  
Dual Representations

Three generic economic optimization problems (expenditure (cost) minimization, revenue maximization, and profit maximization) are studied using the mathematical tools developed in Chapters 2 and 3. Conjugate duality results are developed for each. The resulting dual representations (E(q;y), R(p,x), and π‎(p,q)) are shown to characterize all of the economically relevant information in, respectively, V(y), Y(x), and Gr(≽(y)). The implications of different restrictions on ≽(y) for the dual representations are examined.

scholarly journals Study on Profitable Shared Parking Management Based on Day-to-Day Evolution Model

2021 ◽  
Vol 33 (1) ◽  
pp. 17-33
Author(s):  
Duo Xu ◽  
Huijun Sun
Keyword(s):  
Urban Area ◽  
Optimal Allocation ◽  
Cost Minimization ◽  
Profit Maximization ◽  
Evolution Model ◽  
Residential Areas ◽  
Short Supply ◽  
Parking Lots ◽  
Morning Commute ◽  
Quantity Control

Parking problems are getting increasingly serious in the urban area. However, the parking spots in the urban area are underutilized rather than really scarce. There is a large number of private spots in the residential areas that have the potential of being shared. Due to its private nature, shared parking is usually operated by a profitable mode. To study the utilization of shared parking and its impact on the morning commute, this paper proposes an evolution model. The supply side is a profit-chasing manager who decides on the selling prices and the business scale, while the demand side refers to travellers who respond to costs and choose the trip mode. By analysing the behaviour (strategy) of both sides, the study covers: 1 - the attraction and competition between parking lots and trip modes, 2 - the utilization and user composition of the parking lots. By inducing two numerical examples, the conclusions are that 1 - managers can achieve maximum profit and optimal allocation through price adjustment and quantity control; 2 - publicity (system cost minimization) and profitability (profit maximization) are consistent under certain threshold conditions; 3 - competition exists between parking lots as well as trip modes; some parking lots are even in short supply; profitable management does not create a market monopoly.

Inventory Replenishment for Profit Maximization over a Finite Horizon under One-time Cost Changes

2018 ◽  
Vol 19 (3_suppl) ◽  
pp. S235-S248
Author(s):  
F. J. Arcelus ◽  
T. P. M. Pakkala ◽  
G. Srinivasan
Keyword(s):  
Cost Minimization ◽  
Profit Maximization ◽  
Planning Horizon ◽  
Finite Horizon ◽  
Maximization Problem ◽  
Decision Variable ◽  
Time Cost ◽  
For Profit ◽  
Optimal Policies ◽  
The Cost

This article considers the optimal inventory ordering, purchasing and holding policies of the profit-maximization problem, as against the well-known cost-minimization case, over a finite horizon of length H, under two special conditions. First, there is change in at least one of the inventory costs, that is, in the cost of ordering and/or purchasing/holding, at some point, Tc < H, during the planning horizon. Second, it is not necessary to satisfy the demand, at a rate of R units per year, for the entire horizon. Rather, the objective is to meet the demand for a period of length H1 ≤ H. In fact, if the retailer does not have the obligation to meet the entire demand, this article shows the conditions wherein it may be more profitable to meet only a portion or may be even none of the demand. Further, such a determination can be made up front, with H1 as a decision variable and the optimal policies of the cost-minimization models, by fulfilling the entire demand, will result in lower profits. Numerical examples are included to identify the demand fulfilment and the profit differences between the cost-minimization and profit-maximization optimal policies, under the different one-time cost changes.

scholarly journals Efficiency of banks in Croatia

2021 ◽  
Vol 39 (2) ◽  
pp. 349-379
Author(s):  
Dean Učkar ◽  
Danijel Petrović
Keyword(s):  
Performance Indicators ◽  
Banking Sector ◽  
Cost Minimization ◽  
Profit Maximization ◽  
Return On Assets ◽  
Consolidation Process ◽  
Return On Equity ◽  
Average Efficiency ◽  
Definition Of ◽  
Simple Definition

Croatian banking sector amounts to the majority of its financial sector. Therefore, it is necessary that Croatian banks operate efficiently. In the past two decades, the Croatian banking sector went through a consolidation process that steadily decreased the number of banks and allocated the majority of assets and market share to a few large banks. A simple definition of efficiency is cost minimization and profit maximization. Therefore, a bank is efficient when it strives to minimize its costs while maximizing its profits. This paper aims to estimate efficiency of Croatian banks using the DEA methodology within the period 2014-2019. In addition, the performance indicators (return on assets, return on equity) calculated for the same period aim at comparing performance indicators to efficiency results. The results indicate that larger banks are generally more efficient in operating on the frontier. And, in comparison to performance indicators, they achieve higher levels of returns on assets and equity. Furthermore, some small banks tend to be efficient, while the benefits of being a medium bank are inconclusive since the results reveal that some medium banks have below average efficiency. Overall, average efficiency improved in the observed period, which means that the consolidation process of financial institutions creates large and efficient banks.

scholarly journals An Empirical Model of Behavioral Heterogeneity

2017 ◽  
Vol 8 (2) ◽  
pp. 125-134
Author(s):  
Subal C Kumbhakar ◽  
Mike G Tsionas
Keyword(s):  
Mixture Model ◽  
Empirical Model ◽  
Latent Class ◽  
Cost Minimization ◽  
Profit Maximization ◽  
Behavioral Heterogeneity ◽  
Profit Maximizing ◽  
Sample Separation ◽  
Additional Sample ◽  
The U.S

In this paper we propose a new latent class/mixture model (LCM) to determine whether firms behave like profit maximizers or just cost minimizers when there is no additional sample separation information. Since some firms might be maximizing profit while others might minimize cost, the LCM with behavioral heterogeneity can be quite useful. Estimation of the LCM amounts to mixing a cost minimization and a profit maximization model. Using the U.S. airlines data we find that after deregulation about 15% of the airlines are found to be consistent with profit maximizing behavior. 

Generation Scheduling Based on Two-Level Optimization Problem

2014 ◽  
Vol 3 (1) ◽  
pp. 1-11 ◽  
Author(s):  
I. A. Nechaev ◽  
S.I. Palamarchuk
Keyword(s):  
Power Plants ◽  
Optimization Problem ◽  
Cost Minimization ◽  
Profit Maximization ◽  
Electric Power System ◽  
Total Production ◽  
Equilibrium Constraints ◽  
Wholesale Market ◽  
Hydro Power ◽  
Generation Scheduling

A two-level problem for electricity generation scheduling in the wholesale market environment is proposed. The lower level of the problem corresponds to System Operator's (SO) efforts to schedule generation and calculate local marginal prices (LMPs) on the basis of total production cost minimization. The upper level corresponds to the profit maximization of each Generating Company (GC) with true cost functions and true generation ranges. The lower level of the problem is represented as a Mathematical Program with Equilibrium Constraints (MPEC). The problem is deemed solved, when the Nash equilibrium point is reached among strategic producers. The two-level optimization problem is formulated and the method for its solving is developed. A numerical example of a 15-bus Electric Power System (EPS) with thermal and hydro power plants is used to test the applicability of the approaches. The efficiency of the proposed approach is shown in comparison with traditional methods.

scholarly journals Economic Primitivization as an Institutional Challenge Thrown by the European Integration Processes

2020 ◽  
Vol 4 (46) ◽  
pp. 5-11
Author(s):  
O. V. Kuklin ◽  
◽  
R. F. Pustoviit ◽  
M. Y. Kryvoruchko ◽  
◽  
...  
Keyword(s):  
European Integration ◽  
Comparative Advantage ◽  
Cost Minimization ◽  
Profit Maximization ◽  
Value Added ◽  
Machine Building ◽  
Return Level ◽  
Quantitative Aspect ◽  
Negative Experience ◽  
Export Strategy

The article deals with the economic primitivization issue in the context of European integration. Economic primitivization is seen as a process of substituting high value-added economic activities for low value-added activities. The results of the study show that the economic primitivization issue has been widely covered in the works of the Norwegian scientist E. Reinert, who is in opposition to the neoclassical "mainstream" in economics. For example, the scientist recenses the theory of comparative advantage as the basis for the international specialization of a country, citing the negative experience of European countries, which, when participating in the European integration process, faced the problem of decline in their traditional industries (especially heavy industry). Having studied analytical reports on the research of the competitiveness of the EU and its regions, the author found out that the neoclassical approach to regional competitiveness requires expansion, which can be achieved by combining neoclassical competitiveness factors (the ability of firms to use resources efficiently and increase productivity) with such factors as the wage rate growth and creating a favorable environment for residents and businesses. Emphasis is placed on the fact that economic primitivization is quite urgent for Ukraine due to its European integration course. Ukraine’s export strategy is based on the theory of comparative advantage, so, emphasis in this strategy is placed on the development of low value-added export industries, and it is especially actual for the machine building industry. The article emphasizes the institutional nature of economic primitivism, as it is not the subject for neoclassical, traditional economic analysis. The necessity of taking into account the qualitative, and not only quantitative, aspect of the analysis of economic activity is argued: in addition to the "cost minimization and profit maximization" approach, it is necessary to use the approaches suggested by J. von Th?nen, F. List and J. Schumpeter, based on the differentiation of industries by the economic return level and the synergistic effect.

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