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Online leasing problem with price fluctuations under the consumer price index

Author

Listed:
  • Xin Feng

    (Fujian Agriculture and Forestry University)

  • Yinfeng Xu

    (Donghua University)

  • Guanqun Ni

    (Fujian Agriculture and Forestry University)

  • Yongwu Dai

    (Fujian Agriculture and Forestry University)

Abstract

Price fluctuation is a common phenomenon in the leasing industry. This paper studies the online leasing problem in which the lessee does not know how long he will use the required equipment. Besides, the price of the equipment varies over time, and cannot be learned in advance. We bound the price fluctuations by the definition of the consumer price index. That is, the ratio of the prices between any two consecutive times lies in a predetermined range. By assuming, the lessee has two options for acquiring the equipment: purchase or lease. The problem requires that the leasing strategy should be determined under uncertainties in the using period and the price fluctuations, such that the cost for using the equipment is minimized. We present an optimal online strategy for solving this problem. Computational experiments are conducted to evaluate the characteristics of the problem and the performance of the proposed strategy.

Suggested Citation

  • Xin Feng & Yinfeng Xu & Guanqun Ni & Yongwu Dai, 2018. "Online leasing problem with price fluctuations under the consumer price index," Journal of Combinatorial Optimization, Springer, vol. 36(2), pages 493-507, August.
    • Handle: RePEc:spr:jcomop:v:36:y:2018:i:2:d:10.1007_s10878-018-0305-7
    DOI: 10.1007/s10878-018-0305-7
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    References listed on IDEAS

    as
    1. Yanping Shi & Xiaolan Xu, 2015. "Leasing in China: An Overview," Chinese Economy, Taylor & Francis Journals, vol. 48(5), pages 312-329, September.
    2. Ran El-Yaniv & Richard M. Karp, 1997. "Nearly Optimal Competitive Online Replacement Policies," Mathematics of Operations Research, INFORMS, vol. 22(4), pages 814-839, November.
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    Cited by:

    1. Wenjie Wang & Lei Xie, 2022. "Optimal pricing of crowdsourcing logistics services with social delivery capacity," Journal of Combinatorial Optimization, Springer, vol. 43(5), pages 1447-1469, July.
    2. Yong Zhang & Jiahao Li & Xingyu Yang & Xiaohui Wang, 2022. "Lease or financial lease? Deterministic strategies for on-line financial lease problem with the second-hand transaction," Journal of Combinatorial Optimization, Springer, vol. 44(2), pages 1248-1264, September.
    3. Jiamin Lu & Nishan Chen & Xin Feng, 2023. "Competitive Analysis of the Online Leasing Problem for Scarce Resources," IJERPH, MDPI, vol. 20(1), pages 1-11, January.
    4. Xin Feng & Chengbin Chu, 2022. "Online leasing problem with price fluctuations and the second-hand transaction," Journal of Combinatorial Optimization, Springer, vol. 43(5), pages 1280-1297, July.
    5. Yong Zhang & Hong Lin & Lina Zheng & Xingyu Yang, 2022. "Adaptive online portfolio strategy based on exponential gradient updates," Journal of Combinatorial Optimization, Springer, vol. 43(3), pages 672-696, April.
    6. Yong Zhang & Jingting Wu & Wenxiong Lin & Muyu Hou, 2022. "Competitive analysis for two-option online leasing problem under sharing economy," Journal of Combinatorial Optimization, Springer, vol. 44(1), pages 670-689, August.

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