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PRICING AND APPLICATION OF ELECTRIC STORAGE
Title
PRICING AND APPLICATION OF ELECTRIC STORAGE
Creator
Zhao, Jialin
Date
2017, 2017-05
Description
Electric storage provides a vehicle to store power for future use. It contributes to the grids in multiple aspects. For instance, electric...
Show moreElectric storage provides a vehicle to store power for future use. It contributes to the grids in multiple aspects. For instance, electric storage is a more effective approach to provide electricity ancillary services than conventional methods. Additionally, electric storage, especially fast-responding units, allows owners to implement high-frequency power transactions in settings such as the 5-min real-time trading market. Such high-frequency power trades were limited in the past. However, as technology advances, the power markets have evolved. For instance, the California Independent System Operator now supports the 5-min real-time trading and the hourly day-ahead ancillary services bidding. Existing valuation models of electric storage were not designed to accommodate these recent market developments. To fill this gap, I focus on the fast-responding grid-level electric storage that provides both the real-time trading and the day-ahead ancillary services bidding. To evaluate such an asset, I propose a Monte Carlo Simulation-based valuation model. The foundation of my model is simulations of power prices. This study develops a new simulation model of electric prices. It is worth noting that, unlike existing models, my proposed simulation model captures the dependency of the real-time markets on the day-ahead markets. Upon such simulations, this study investigates the pricing and the application of electric storage at a 5-min granularity. Essentially, my model is a Dynamic Programming system with both endogenous variables (i.e., the State-of-Charge of electric storage) and exogenous variables (i.e., power prices). My first numerical example is the valuation of a fictitious 4MWh battery. Similarly, my second example evaluates the application of two units of 2MWh batteries. By comparing these two experiments, I investigate the issues related to battery configurations, such as the impacts of splitting storage capability on the valuation of electric storage.
Ph.D. in Management Science, May 2017
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SHOWROOMING AND BRICK-AND-MORTAR STORES’ MITIGATION STRATEGIES
Title
SHOWROOMING AND BRICK-AND-MORTAR STORES’ MITIGATION STRATEGIES
Creator
Luo, Yilong
Date
2018, 2018-05
Description
Showrooming is a shopping strategy wherein consumers touch and feel the products in a brick-and-mortar store but purchase the products from an...
Show moreShowrooming is a shopping strategy wherein consumers touch and feel the products in a brick-and-mortar store but purchase the products from an online-exclusive store that offers a lower price. With improvements of IT technology, such as high-speed internet and mobile phone usage, showrooming is now widely used by consumers worldwide. Brick-and-mortal stores have observed and regarded showrooming not only as a threat but also as a cause of their sales decline. Brick-and-mortar stores have adopted strategies such as price matching and loyalty programs to battle showrooming impact to some extent, but not effectively. The main goal and objective of this study is to assess the conditions and parameters most influencing the showrooming phenomenon and its impact on the survival of brick-and-mortar stores, followed by developing model approaches for the design and evaluation of the best strategies to address competition provided by online stores, focusing on the impact of showrooming. The results of theoretical modeling performed in this study suggest that (a) brick-and-mortar stores suffered from showrooming effects; (b) price matching can help brick-and-mortar stores to alleviate showrooming effects only under certain conditions; (c) price matching could negatively impact consumers’ surplus instead of benefiting them due to cost increases due to price matching policy; (d) price matching is a product-specific strategy rather than a store-wide policy; (e) while a manufacturer benefits from the price match policy, it also shares a portion of its profit to motivate offline retailers to offer a price matching policy; and (f) offline retailers can alleviate showrooming effects by strategically carrying parts of the product line. The application of the proposed modeling strategy is presented in two case studies concerning high- and low-cost products.
Ph.D. in Management Science, May 2018
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