Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Dualpricing for food_commodities
1.
DUAL
PRICING
SYSTEM
FOR
FOOD
COMMODITIES
Author
–
Sunu
Thomas
EmailID
–
sunu_v_thomas@yahoo.com
Phone
-‐
+919880234469
2.
1
INTRODUCTION
............................................................................................................................
3
1.1
WHAT
THIS
DOCUMENT
ATTEMPTS
........................................................................................................
3
1.2
A
QUICK
LOOK
INTO
THE
PROBLEM
.........................................................................................................
3
2
QUALITY
OF
SERVICE
ON
TELECOM
NETWORKS
–CONCEPT
OF
THE
DUAL
PRICING
SYSTEM
..............................................................................................................................
4
3
QUALITY
OF
SERVICE
ALGORITHM
APPLIED
TO
FOOD
COMMODITIES
TRADE
.....
6
4
THE
LOCAL
TRADING
CORE
SYSTEM
.....................................................................................
8
5
THE
NATIONAL
TRADING
CORE
SYSTEM
.............................................................................
9
5.1
CONFIGURATION
REQUESTS
ARRIVING
AT
THE
NATIONAL
TRADING
CORE
SYSTEM(EXAMPLE)
9
3. 1
Introduction
1.1
What
this
document
attempts
The below presentation is an untested concept that tries to bring
in a method bring in much more efficiency in dealing with food
commodities which will lead to considerably less wastage and
hence address our sustainability issues.
1.2
A
quick
look
into
the
problem
Production of food commodities worldwide is unpredictable.
Due to the unpredictability of climate, water availability etc., it
will continue to be unpredictable in the foreseeable future.
There will be instances of excess production or under
production but as we see in today’s scenario, both are equally
chaotic and the farmer ends up being the loser.
In excess production, the prices are driven down and storages
aren’t enough, causing wastage.
What we will try here is to somehow handle the case of excess
production by bringing in a Dual Pricing System.
This is an attempt to model the movement of commodities in the
world based on the Quality of Service (QOS) algorithm used to
classify and prioritize the traffic flow in Telecommunications
Networks.
4. 2
Quality
of
Service
on
Telecom
Networks
–Concept
of
the
Dual
Pricing
System
What the QOS algorithm does for telecom networks is to
provide for a subscription into assured and non-assured
bandwidth on an interface.
The pricing for this bandwidth, which is calculated every second
and priced for a month, is highly dependent on the different
combinations of assured and non-assured bandwidths requested.
For an ordinary customer of the telecom network, say an ADSL
home user, QOS would assure him a certain amount of
bandwidth at a certain price.
5. Digging deeper,
Total Customer Bandwidth = Assured Bandwidth + Non-
Assured Bandwidth
Total Customer Bandwidth Cost = Assured Bandwidth Cost +
Non-Assured Bandwidth Cost.
Where, Assured Bandwidth Cost > Non-Assured Bandwidth
Cost
So, in essence, a customer chooses the level of bandwidth based
on affordability and usage.
And because the Total Customer Bandwidth Cost is derived out
of 2 different costs (Assured + Non-Assured Bandwidth Cost),
we could call it a DUAL PRICING SYSTEM.
For those not familiar with telecom networks, what the above
means is that,
Customer 1 – Gets at most 1.4 mbps and at least 1 mbps .He
may or may not get the extra 0.4 mbps, sustained, on the
measured time frame, but then he pays only a fraction of the
assured bandwidth’s cost.
Since it is difficult to quantify whether the customer has got the
other 0.4 mbps (non assured), the pricings are almost rounded
out to, say, 1.9 $ per month.
NOTE: All numbers quoted are indicative and not the real
values.
6. 3
Quality
of
Service
Algorithm
applied
to
Food
Commodities
trade
Now, this concept of Dual Pricing can be definitely applied to
our commodities world and it’s impact could be immense.
In this diagram, we replace customer 1 with trader 1 and
customer 2 with trader 2.
Instead of the Core Network, we have the National Trading
Core System and instead of Router1 and 2, we have Local
Trading Core System 1 and 2.
And instead of the bandwidth on which we apply QOS, we will
apply QOS on any of the food commodities whose production is
highly fluctuating.
7. To compare further, if we look at bandwidth as Megabits per
second, here we will use food commodities/day as the minimum
unit for the trader to configure.
The below table shows the similarities between the Networking
Domain and the Food Commodities Domain
Networking
Domain
Food Commodities
Domain
Core Node Core Network National Trading
Core System
Intermediate
Nodes
Router 1 Local Trading Core
System1
End User Customer 1 Trader 1
Configured
Commodity
Bandwidth (in
megabits/second
with billing cycle –
1 month)
Any food
commodity (in kilos
/day, with billing
cycle – one day)
In theory, and as per how the demands for commodities are,
the trader could use this same system to come up with a more
realistic buying mechanism.
The trader, based on past trading scenarios, could put an order
for an assured amount of potatoes and assuming that there might
be a burst of consumption, say due to a festival, order an
additional non assured amount for which he may pay a much
less amount.
8. As seen in the diagram,
The trader orders
a) Assured - 2000 kilos of potatoes at $2 /Kilo.
b) Non-Assured – 700 kilos of potatoes at $1.3 /Kilo.
For the Assured part, the National Trading Core System has to
ensure that the trader gets this amount. It will be bound by
penalties etc.
The Non-Assured part is something the National Trading Core
System will not guarantee. If due to the burstiness of production
or the cancellation of orders, excess potatoes are available, then
it will be delivered to this trader in the Non-Assured part.
Although this method of selling the excess produced at a
discount does exist, it is still very ad-hoc.
4
The
Local
Trading
Core
System
The local trading core system will have up to date information
about all the warehouses and markets in its domain area and
their commodity status. It will advertise it’s status of
commodities to the National Trading System Core.
This system will try to satisfy any of the trader’s requirement
from within it’s domain area.
For example,
If trader1 attached to Local Trading Core System1 makes an
order for
9. Assured – 100 kilo Bananas (@ $1 /kilo)
Non-Assured – 15 kilo Bananas (@ $ 0.750 /kilo),
It will check its tables for supplies that can satisfy this criteria.
If the quantity of bananas seen in its domain area is less than
what can satisfy trader 1, it will forward this request to the
National Trading Core System.
5
The
National
Trading
Core
System
This core system is key to having the entire system work.
All the local trading core systems and some individual traders
are connected to this system.
This system will have up-to-date information from all the Local
Trading Core Systems and their food commodity status on a
daily basis.
It is from this massive resource pool that the Local Trading
Core Systems or traders directly attached to it will be able to
configure their requirements.
The National Trading Core System will forward requests for all
commodities to those Local Core Systems that have the
adequate amount of these commodities.
For example, Local Core System 20 may fulfill Local Core
System1’s requests. The National Trading Core System will
forward this request to Local Core System 20.
5.1
Configuration
requests
arriving
at
the
National
Trading
Core
System(Example)
2012/04/10,LocalCore1,
Bananas,
Assured,
100
kilos
2012/04/10,LocalCore1,
Bananas,
Non-‐Assured,
15
kilos
