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Smart Vending Machine Simulation
New Economy Opportunity
Abstract
Economists use the term "price discrimination" to describe the practice of selling the same product to different groups of buyers at different prices in recognition of the fact that consumers assign a different value to the same product based on varying degrees of need. ... is really a smart way to vend its products (beverages). ... Temperature/Demand function to factor in our simulation. Our smart vending machine simulation gets dictated by two factors; 1. ... These two factors interact to simulate the sales behavior pattern of the vending machine. ...
Introduction
The research is to verify whether this Smart Strategy employed vending machines are profitable in a real business condition. This kind of sales simulation has been much of a difficult task for many. ... Smart Vending Machine is a crudely assumed price strategy, yet it integrates much of fundamentals of economic theories. ... Although we have sampled this data from KGSM student population, we believe that since Smart Vending Machine and a regular vending machine are put in a same experiment condition, we felt that this was jus good enough to obtain relative results of two machines. ... After these utility functions were constructed, we placed our two vending machines at the Everland entrances, where all the people must go through in order to use the park? ...
Temperature-Demand Curve
After interviewing with Everland corporate communication staff, we were able to obtain few pieces of information about vending machine beverage sales. Approximately in the winter time, where there is a relatively low demand for cold beverage, approximately ~1%(double count not accounted, just total number of beverages considered in this case) of visitors purchase beverage from vending machine. ... This shows a demand-temperature curve of a fixed vending machine model. ... Typical vending machine would just follow fixed price demand curves and dynamic pricing curves would be dictated by two factors temperature-price & price-demand function. ... Smart 8.6 mil KRW Better, but un-accounted for higher Price of machine
? ... Our model has limitations due to un-accounted other variables, but given major variables (temp, consumer utility curves) both fixed and smart vending machines, we are confident our model is a rather windowed version of reality.
Approximate Word count = 1671
Approximate Pages = 6.7
(250 words per page double spaced)
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