Electric Power Supply Chain Networks Design featuring Differential Pricing and Preventive Maintenance

¹ Department of Industrial Management, National Taiwan University of Science and Technology, Taipei, Taiwan
² Artificial Intelligence for Operations Management Research Center, National Taiwan University of Science and Technology, Taipei, Taiwan
³ Department of Business Administration, Asia University, Taichung, Taiwan
⁴ Department of Medical Research, China Medical University Hospital, China Medical University, Taichung, Taiwan
⁵ School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, GA, USA

^* Corresponding author: yctsao@mail.ntust.edu.tw

Received: 24 November 2020
Accepted: 18 March 2021

Abstract

The electric power supply chain network plays an important role in the world economy. It powers our homes, offices, and industries and runs various forms of transportation. This paper considers an electric power supply chain network design problem featuring differential pricing and preventive maintenance. We demonstrate that this general model can be formulated as the centralized and decentralized supply chain models. A continuous approximation approach is used to model the problems. The objective of these models is to determine the optimal power plants’ service area, electricity price, and preventive maintenance budget while maximizing the total network profit or the own organization’s benefits. Our model is applied to the case of a power company in northern Vietnam. We show that the proposed approach can be used to address real-world cases effectively. The results demonstrate that the use of differential pricing policy and preventive maintenance could much enhance power company profit.