Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7427418 | Transportation Research Part E: Logistics and Transportation Review | 2018 | 23 Pages |
Abstract
For many BOT transport projects, the government imposes service level requirement on the private firm so that project capacity and stochastic demand can be better matched. We define service level as the probability of project capacity satisfying uncertain demand. The results suggest that the presence of service level requirement improves both user fee and project capacity, and also improves consumer surplus while decreases firm profit. We have made two extensions to investigate the government's optimal service level, and to compare service level requirement with capacity regulation and price cap regulation. Some managerial insights offered by model results are discussed.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business and International Management
Authors
Yiwen Zhang, Zhuo Feng, Shuibo Zhang, Jinbo Song,