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Online leasing problem with price fluctuations and the second-hand transaction

Author

Listed:
  • Xin Feng

    (Fujian Agriculture and Forestry University)

  • Chengbin Chu

    (ESIEE Paris, Universite Paris-Est)

Abstract

This paper proposes an online leasing problem considering both price fluctuations and the second-hand transaction. In the studied problem, the price of the required equipment is assumed to fluctuate over time and lie in a predetermined range [1, M]. Moreover, the price between two adjacent times is controlled within an acceptable range [1/α, α]. The equipment can be sold through second-hand transaction after its end of use. The selling price in the second-hand transaction is assumed to vary along with the price fluctuations. The aim of this paper is to find the best possible online leasing strategy which generates a minimal cost for using the equipment. We present an online leasing algorithm for solving this problem and prove it to be the optimal online algorithm. Computational experiments are conducted to evaluate the characteristics of the problem and the performance of the proposed online leasing algorithm.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:jcomop:v:43:y:2022:i:5:d:10.1007_s10878-020-00640-x
    DOI: 10.1007/s10878-020-00640-x
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    References listed on IDEAS

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    1. Hiroshi Fujiwara & Takuma Kitano & Toshihiro Fujito, 2016. "On the best possible competitive ratio for the multislope ski-rental problem," Journal of Combinatorial Optimization, Springer, vol. 31(2), pages 463-490, February.
    2. Yanping Shi & Xiaolan Xu, 2015. "Leasing in China: An Overview," Chinese Economy, Taylor & Francis Journals, vol. 48(5), pages 312-329, September.
    3. Dai, Wenqiang & Dong, Yucheng & Zhang, Xiaotian, 2016. "Competitive analysis of the online financial lease problem," European Journal of Operational Research, Elsevier, vol. 250(3), pages 865-873.
    4. 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.
    5. 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.
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    Cited by:

    1. Yuriy Ekhlakov & Sergei Saprunov & Pavel Senchenko & Anatoly Sidorov, 2023. "Fuzzy Model for Determining the Risk Premium to the Rental Rate When Renting Technological Equipment," Mathematics, MDPI, vol. 11(3), pages 1-18, January.

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