Differential pricing integrated with multi-product, multi-machine, multi-worker cost function for resource service providers in cloud manufacturing

Abstract

Cloud manufacturing (CMfg) platform offers an open marketplace, where a Resource Service Provider (RSP) can benefit from Price Discrimination (PD) in return for specific services. However, the literature focused mainly on operator-based pricing and overlooked RSP pricing control. Therefore, this study formulates a profit function in which revenue is enhanced by adjusting prices according to customer types, while cost accounting is done by resource allocation based Material Flow Cost Accounting (MFCA) because MFCA provides a comprehensive guideline towards waste minimization. The proposed model is formulated into MINLP problem with multiple factors such as; part types, batch size, part routes, machine types, energy consumption, worker types and material handling cost as well as price sensitive customer behaviour and demand. Further, ANOVA is applied for factors analysis. The results suggests that customer types and demand are positively correlated, while parts, machines, and worker types are negatively correlated with profit. The model is also compared with reference price effect and fixed pricing strategy. Results validate that to benefit from diverse customer behaviour in CMfg, PD along with optimal resource allocation provides an effective solution for profit maximization. Model is also compared with reference price effect and fixed pricing strategy to validate its effectiveness.