Publication Status
Accepted/In press
Document Type
Journal article
Department / Unit
Department of Computing and Decision Sciences
Journal Title
European Journal of Operational Research
Publication Date
11-18-2013
Language
English
Volume
235
First Page
329
Last Page
333
Keywords
Electric vehicle, Supply chain, Price discount, Incentive scheme
Abstract
We investigate an automobile supply chain where a manufacturer and a retailer serve heterogeneous consumers with electric vehicles (EVs) under a government’s price-discount incentive scheme that involves a price discount rate and a subsidy ceiling. We show that the subsidy ceiling is more effective in influencing the optimal wholesale pricing decision of the manufacturer with a higher unit production cost. However, the discount rate is more effective for the manufacturer with a lower unit production cost. Moreover, the expected sales are increasing in the discount rate but may be decreasing in the subsidy ceiling. Analytic results indicate that an effective incentive scheme should include both a discount rate and a subsidy ceiling. We also derive the necessary condition for the most effective discount rate and subsidy ceiling that maximize the expected sales of EVs, and obtain a unique discount rate and subsidy ceiling that most effectively improve the manufacturer’s incentive for EV production.
DOI
10.1016/j.ejor.2013.11.021
ISSN
0377-2217
Fulltext file version
Accepted author manuscript
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Pure ID
5664084
Pure UUID
a44e045c-afc8-42b7-8ca7-a8dbc710a5e3
Comment
For this research, the first author (Chunlin Luo) is supported by the National Natural Science Foundation of China under Grant No. 71261006. The second author (Mingming Leng) is supported by the General Research Fund of the Hong Kong Research Grants Council under Research Project No. LU341012. The third author (Jian Huang) is supported by the National Natural Science Foundation of China under Grant Nos. 70901036, 71371089, and 71101067, and is also supported by the Jiangxi University of Finance and Economics’s Excellent Young Researcher Support Scheme under Grant No. 00252025.