Incentive system to smooth out fluctuations in demand

Abstract

AbstractThe global market is influenced by multiple factors such as market trends, cultural dynamics, and geopolitical uncertainties. In this context service providers often face volatile demand patterns leading to sub-optimal capacity utilization. This approach presents an incentive system to smooth out fluctuations in demand and to enhance service provider efficiency. This system computes optimal service prices based on projected capacity utilization. By including insights from past orders and demand forecasts, the algorithm facilitates proactive price adjustments to adapt to changing market dynamics. To implement this system effectively, seamless integration within the service provider’s digital infrastructure is essential. This involves establishing standardized Asset Administration Shells to enable the exchange of critical information and the execution of process-related services. This ensures interoperability with existing components, fostering a cohesive operational environment. The approach is validated within the infrastructure of a medium-sized service provider and demonstrates its potential for wider industry adoption. By leveraging dynamic pricing mechanisms and digital infrastructure, the proposed incentive system offers a systematic solution to address demand volatility, thereby enhancing operational efficiency and competitiveness in the dynamic market landscape.