TY - JOUR
T1 - Purchase or rent? Optimal pricing for 3D printing capacity sharing platforms
AU - Sun, Luoyi
AU - Hua, Guowei
AU - Cheng, T. C.E.
AU - Teunter, Ruud H.
AU - Dong, Jingxin
AU - Wang, Yixiao
N1 - Funding Information:
We thank the Editor and four anonymous referees for the many helpful comments on an earlier version of our paper. This work was supported by the National Natural Science Foundation of China under grant number 72101252 and 71831001, and by China Postdoctoral Science Foundation under grant number 2021M703421. Cheng was supported in part by The Hong Kong Polytechnic University under the Fung Yiu King - Wing Hang Bank Endowed Professorship in Business Administration.
Publisher Copyright:
© 2022
PY - 2022
Y1 - 2022
N2 - Online sharing platforms have attracted considerable research and management attention across a number of industries, including travel, real estate, and cloud computing. They also have great potential for the 3D printing (3DP) industry, offering users the choice between owning or renting 3DP capacity. For matching supply and demand, capacity pricing is crucial. In this paper we consider two fundamental questions concerning pricing: (i) What is the optimal pricing strategy for a 3DP capacity sharing platform? (ii) How do usage level and printer heterogeneity affect consumers’ choice between in-house printing (owning) and outsourcing (renting)? Using queuing analysis, we derive the structural properties of the solutions to the problems. Furthermore, we conduct numerical studies using real-world data to generate managerial insights from the analytical findings. A key finding is that governments should focus on encouraging technological progress to lower the printers’ prices in order to improve the well-being of the industry. When considering two types of printers, we find that it is more beneficial for the platform if the high capacity printer dominates the market, as the platform then retains the prominent role in “redistributing” the 3DP capacity.
AB - Online sharing platforms have attracted considerable research and management attention across a number of industries, including travel, real estate, and cloud computing. They also have great potential for the 3D printing (3DP) industry, offering users the choice between owning or renting 3DP capacity. For matching supply and demand, capacity pricing is crucial. In this paper we consider two fundamental questions concerning pricing: (i) What is the optimal pricing strategy for a 3DP capacity sharing platform? (ii) How do usage level and printer heterogeneity affect consumers’ choice between in-house printing (owning) and outsourcing (renting)? Using queuing analysis, we derive the structural properties of the solutions to the problems. Furthermore, we conduct numerical studies using real-world data to generate managerial insights from the analytical findings. A key finding is that governments should focus on encouraging technological progress to lower the printers’ prices in order to improve the well-being of the industry. When considering two types of printers, we find that it is more beneficial for the platform if the high capacity printer dominates the market, as the platform then retains the prominent role in “redistributing” the 3DP capacity.
KW - 3D printing platform
KW - Capacity sharing
KW - Manufacturing
KW - Pricing strategy
UR - http://www.scopus.com/inward/record.url?scp=85140633842&partnerID=8YFLogxK
U2 - 10.1016/j.ejor.2022.09.040
DO - 10.1016/j.ejor.2022.09.040
M3 - Journal article
AN - SCOPUS:85140633842
SN - 0377-2217
JO - European Journal of Operational Research
JF - European Journal of Operational Research
ER -