optimal pricing shipment and payment policy for an integrated supplier buyer inventory model with two part trade credit abstract in this article we develop an integrated supplier buyer inventory model with the assumption that the market demand is sensitive to the retail price and the supplier adopts a trade credit policy the trade credit policy discussed in this paper is a two part strategy cash discount and delayed payment that is if the buyer pays within m1 the buyer receives a cash discount otherwise the full purchasing price must be paid before m2 where m 2 m 1 0 the objective of this research is to determine the optimal pricing ordering shipping and payment policy to maximize the joint expected total profit per unit time an iterative algorithm is established to obtain the optimal strategy furthermore numerical examples and sensitivity analysis are presented to illustrate the results of the proposed model and to draw managerial insights

the effect of tax treaties on multinational firms new evidence from microdata this paper uses affiliate level data from swedish multinationals to examine the impact of tax treaties on both overall affiliate sales and the composition of those sales in line with previous results we find little evidence for an effect of treaties on the level of total sales we do however find that a tax treaty increases the probability of investment by a firm in a given country in addition we find that a treaty reduces exports to the parent but increases imports of intermediate inputs from the parent this is consistent with treaties increasing the effective host tax this suggests that tax treaties impact the behavior of multinationals along some dimensions but not along others

comments on the eoq model for deteriorating items with conditional trade credit linked to order quantity in the supply chain management abstract ouyang et al 2009 consider an economic order quantity eoq model for deteriorating items with a partially permissible delay in payments linked to order quantity basically their inventory model is practical but there are some defects from the logical viewpoints of mathematics in this paper the functional behaviors of the annual total relevant costs are explored by rigorous methods of mathematics a complete solution procedure is also developed to make up for the shortcomings of ouyang et al 2009 in numerical examples it is proved that the new solution procedure could avoid making wrong decisions and causing cost penalties

lotteries insurance and star shaped utility functions abstract most agents insure against risks which entail large losses but few insure against small losses the fact that organized lotteries charge low ticket prices examplifies this spirit this weakly risk averse behavior pattern seems to be well structured but is at variance with concavity we derive axiomatically a class of utility functions star shaped which accommodate these phenomena concavity yields risk aversion everywhere and decreasing marginal utility star shaped utility functions exhibit risk aversion at some wealth positions and average utility from any of these is a decreasing function of wealth

an eoq model with stock dependent demand shortage inflation and time discounting abstract this paper develops a finite time horizon deterministic economic order quantity eoq inventory model with shortages where the demand rate at any instant depends on the on hand inventory stock level at that instant the effects of inflation and the time value of money are taken into account considering two separate inflation rates namely the internal company inflation rate and the external general economy inflation rate the results are discussed with a numerical example and particular case of the model is discussed in brief a sensitivity analysis of the optimal solution with respect to the parameters of the system is carried out

replenishment and pricing policy for deteriorating items taking into account the time value of money abstract a deteriorating inventory model taking into account the time value of money is developed for a deterministic inventory system with price dependent demand this study applies the discounted cash flows dcf approach for problem analysis a heuristic approach is presented to derive the near optimal replenishment and pricing policy that tries to maximize the total net present value profit a numerical example is implemented to illustrate the theory

endogenous market structures in international trade natura facit saltum abstract almost all of the large literature on international trade with imperfect competition assumes exogenous market structures the purpose of this paper is to develop a simple model that generates alternative market structures as nash equilibria for different parameterizations of the basic model equilibrium market structure is a function of the underlying technology familiar configurations such as a duopoly competing in exports or a single multinational producing in both markets arise as special cases small tax policy changes can produce large welfare effects as the equilibrium market structure shifts implying discontinuous jumps in prices quantities and profits

the optimal cycle time for epq inventory model under permissible delay in payments abstract goyal journal of the operational research society 36 1985 35 38 discusses the economic order quantity under conditions of permissible delay in payments an implicit assumption of goyal journal of the operational research society 36 1985 35 38 is that the items are obtained from an outside supplier the entire lot size is delivered at the same time if we wish to adopt all results obtained by goyal journal of the operational research society 36 1985 35 38 then we are effectively assuming that the replenishment rate is infinite the main purpose of this paper is to extend goyal journal of the operational research society 36 1985 35 38 to the case that the units are replenished at a finite rate when the replenishment rate approaches to infinite goyal journal of the operational research society 36 1985 35 38 will be a special case of this paper

relatively weak increases in risk and their comparative statics abstract we propose in this paper a new condition on increases in risk to obtain the desirable comparative statics properties for non linear payoffs our new concept of relatively weak increases in risk extends the definition of relatively strong increases in risk black and bulkley international economic review 1989 30 119 130

higher order generalizations of arrow pratt and ross risk aversion a comparative statics approach abstract we analyze comparative risk aversion in a new way through a comparative statics problem in which for a cost agents can shift from an initial probability distribution toward a preferred distribution the ross characterization arises when the original distribution is riskier than the preferred distribution and the cost is monetary and the arrow pratt characterization arises when the original distribution differs from the preferred distribution by a simple mean preserving spread and the cost is a utility cost higher order increases in risk lead to higher order generalizations and the comparative statics method yields a unified approach to the problem of comparative risk attitudes

comparative statics predictions for the cross effects of central dominance changes in risk with quasilinear payoffs abstract we examine cross effects for central dominance changes in the random payoff to one activity on the willingness of a risk averter to undertake or expand a second this willingness is enhanced for quasilinear payoffs when activities are cost substitutes

comparative statics of changes in risk on monotonically and partially responsive kinked payoffs abstract this paper derives two sets of necessary and sufficient conditions on the comparative statics of changes in risk under kinked payoff functions that are monotonically responsive and partially responsive to the realization of risk respectively the former case includes the newsboy problem with backorder the latter case includes the newsboy problem without backorder and under some restrictions also includes the optimal deductible insurance problem some relatively non restrictive conditions derived from the necessary and sufficient conditions reveal that the three problems can be quite different even though they are often viewed in the literature as being congruous these conditions lead to simple predictions of the direction of change in any risk averse agent s optimal choice upon a change in risk without assuming specific functional forms for the utility function

supply chain coordination for the joint determination of order quantity and reorder point using credit option abstract decisions regarding order quantity and reorder point are two major challenges in supply chain inventory management in this paper a coordination model of the joint determination of these two decision variables is proposed a decentralized supply chain consisting of one buyer and one supplier in a multi period setting is investigated demand and lead times are uncertain in our model an incentive scheme based on credit option has been developed to encourage the buyer to participate in the coordination model in this model the downstream member has the option of using credit to purchase goods during the credit time subject to its commitment to a jointly agreed order quantity and reorder point the credit time is determined in such a way that the two parties have incentives to participate the proposed incentive scheme can share the benefits of coordination between the two members based on their bargaining power the proposed model shows that the coordination of the reorder point together with order quantity can increase the overall chain profitability as well as each member s profitability

a review of trade credit literature opportunities for research in operations abstract trade credit arises when a buyer delays payment for purchased goods or services its nature has predominantly been an area of inquiry for researchers from the disciplines of finance marketing and economics but it has received relatively little attention in other domains in our article we provide an integrative review of the existing literature and discuss conflicting study outcomes we organize the relevant literature into seven areas of inquiry and analyze four in detail trade credit motives order quantity decisions credit term decisions and settlement period decisions additionally we derive a detailed agenda for future research in these areas

optimal strategy for an integrated system with variable production rate when the freight rate and trade credit are both linked to the order quantity abstract this paper presents an integrated inventory model with variable production rate and price sensitive demand rate the buyer s purchases trade credit linked to the order quantity offered by the supplier in addition the buyer pays the freight charge according to a weight schedule this paper attempts to offer a best policy that aims at maximizing the joint total profit while the trade credit and freight rate are simultaneously linked to the order quantity the same policy also incorporates considerations on the optimal retail price order quantity and delivery decision we provide possible solutions for the buyer and the supplier to collaboratively agree on inventory control warehouse management transportation logistics delivery and billing our study demonstrates that significant profit increase for the entire supply chain can be achieved by linking both trade credit policy and freight rate policy to order quantities an algorithm is furnished to determine the optimal solution in addition numerical examples and sensitivity analysis are presented to illustrate the theoretical results

patent protection innovation and technology transfer in a schumpeterian economy abstract this paper analyzes the cross country effects of intellectual property rights ipr protection on the relative wage innovation and technology transfer in a north south quality ladder model with innovative northern r d and adaptive southern r d the degree of ipr protection in two countries differs in terms of patent breadth which determines the markups of northern firms and their southern affiliates respectively in this model stronger ipr protection in the south leads to a permanent decrease in the north south wage gap a temporary increase in the northern innovation rate and a permanent increase in technology transfer by contrast stronger ipr protection in the north leads to a permanent increase in the north south wage gap ambiguous effects on the northern innovation rate and a permanent decrease in technology transfer finally we perform a quantitative analysis by calibrating the model to the us china data and the numerical results support these policy implications in addition to a welfare implication such that strengthening patent protection in one country leads to sizable welfare improvements in both countries

when does extra risk strictly increase an option s value it is well known that risk increases the value of options this article makes that precise in a new way the conventional theorem says that the value of an option does not fall if the underlying asset becomes riskier in the conventional sense of the mean preserving spread this article uses two new definitions of riskier to show that the value of an option strictly increases i if the underlying asset becomes pointwise riskier and ii only if the underlying asset becomes extremum riskier

the effects of shifts in a return distribution on optimal portfolios when the distribution of the returns of a risky asset undergoes a stochastically dominating shift a risk averse investor may not necessarily increase the investment in that asset this paper provides restrictions on the investor s utility function that are necessary and sufficient for a dominating shift to bring about no decrease in the investment in the respective asset if there are two risky assets in the portfolio these conditions are also necessary if there are n 2 assets and are necessary and sufficient if the utility function exhibits constant absolute risk aversion copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

international competition in r d and technological leadership an examination of the posner hufbauer hypothesis abstract this paper develops a dynamic game theoretic model of international competition in r d to examine the posner hufbauer hypothesis that trade based on the generation and diffusion of superior technology is relatively disadvantageous to the technologically less advanced countries the impact of three forms of technological leadership technological endowments costs of r d and preemptive behavior on the outcome of the game provides some support for the hypothesis if the quasi rent period is sufficiently long and if the original technological follower reacts aggressively to increased r d rivalry the leader and the follower will switch positions in the later part of the game

foreign investment and technology transfer a simple model abstract this paper develops a model in which international technology transfer through foreign direct investment emerges as an endogenized equilibrium phenomenon resulting from the strategic interaction between subsidiaries of multinational corporations and host country firms the model explicitly recognizes two types of costs the costs to the multinational of transferring technology to its subsidiaries and the learning costs of domestic firms the analysis points to the importance of the learning efforts of host country firms in increasing the rate at which mncs transfer technology the paper also explores some of the reasons why learning investment in host country firms may be suboptimal

a production inventory model in an imperfect production process abstract the paper develops a model to determine the optimal product reliability and production rate that achieves the biggest total integrated profit for an imperfect manufacturing process the basic assumption of the classical economic manufacturing quantity emq model is that all manufacturing items are of perfect quality the assumption is not true in practice most of the production system produces perfect and imperfect quality items in some cases the imperfect quality non conforming items are reworked at a cost to restore its quality to the original one rework cost may be reduced by improvements in product reliability i e decreasing in product reliability parameter lower value of product reliability parameter results in increase development cost of production and also smaller quantity of nonconforming products the unit production cost is a function of product reliability parameter and production rate as a result higher development cost increases unit production cost the problem of optimal planning work and rework processes belongs to the broad field of production inventory model which deals with all kinds of reuse processes in supply chains these processes aim to recover defective product items in such a way that they meet the quality level of good item the benefits from imperfect quality items are regaining the material and value added on defective items and improving the environment protection in this point of view a model is introduced here to guide a firm industry in addressing variable product reliability factor variable unit production cost and dynamic production rate for time varying demand the paper provides an optimal control formulation of the problem and develops necessary and sufficient conditions for optimality of the dynamic variables in this purpose the euler lagrange method is used to obtain optimal solutions for product reliability parameter and dynamic production rate finally numerical examples are given to illustrate the proposed model

outside risk aversion and the comparative statics of increasing risk in quasi linear decision models necessary and sufficient conditions are derived to determine the effect of increases in rothschild stiglitz risk on optimal decisions in a class of competitive models with price uncertainty outside risk aversion and composite outside risk aversion are defined the effect of increased risk on the optimal decision is controlled by composite outside risk aversion it is decomposed into a wealth effect controlled by downside risk aversion and an uncertainty effect controlled by outside risk aversion composite outside risk aversion is shown to be equivalent to outside risk aversion so that the uncertainty effect controls the overall effect copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

comparative statics and non expected utility preferences abstract researchers have shown that many though not all of the basic results of expected utility analysis can be more or less directly generalized to non expected utility preferences this paper describes the essential difference between results which can be extended in this manner and those which cannot and shows that an important family of comparative statics theorems falls into the former class

an incentive compatible solution for trade credit term incorporating default risk abstract this paper studies the optimal trade credit term decision in an extended economic ordering quantity eoq framework that incorporates a default risk component a principal agent bilevel programming model with costs minimization objectives is set up to derive the incentive compatible credit term the supplier determines the credit term as the leader in the first level programming by balancing her his financing capacity with the retailer s default risk order behavior and cost shifting at the second level the retailer makes decisions on ordering and payment time by reacting on the term offered by the supplier a first order condition solution procedure is derived for the bilevel programming when credit term is confined within the practically feasible interval two key results are obtained the condition to derive incentive compatible credit term and an equation system to derive threshold default risk criterion filtering retailers suitable for credit granting numerical experiments show that the capital cost of the supplier is the most important factor determining the credit term default risk acts like a filtering criterion for selecting retailers suitable for credit granting empirical evidence supporting our theoretical considerations is obtained by estimating three panel econometric models using a dataset from china s listed companies

the risk averse and prudent newsboy the effects of risk and risk aversion in the single period inventory newsboy problem are examined comparative static effects of changes in the various price and cost parameters are determined and related to the newsboy s risk aversion the addition of a random background wealth and of an increase in the riskiness of newspaper demand are also examined although many of the comparative effects generally are ambiguous some fairly simple restrictions on preferences and or risk increases are shown to lead to qualitatively deterministic results

monotonicity of asset price toward higher changes in risk abstract this note gives the conditions on preferences to guarantee the monotonicity of asset prices when the payoffs of the risky asset change in the sense of the n th stochastic dominance and with an n th degree increase in risk those conditions are expressed in terms of the sign of the successive derivatives of the utility function coupled with the relative risk aversion of higher orders less than their benchmark values

the boundaries of multinational enterprises and the theory of international trade this paper begins with a review of empirical evidence on multinational firms conceptual underpinnings of a theory are developed relying in particular on the notion of knowledge capital as a mobile joint input into geographically separated production facilities this idea is embedded in a simple two country general equilibrium model that supports multinational production in equilibrium under conditions consistent with the empirical evidence the final section examines internalization and shows why certain properties of knowledge capital also imply a preference for transferring technologies internally within the firm rather than through arm s length markets

an eoq model with noninstantaneous receipt and exponentially deteriorating items under two level trade credit abstract this paper considers the impact of the trade credit policy on the classical economic production quantity epq model for an item subject to exponential decays essentially this study focuses on an exponentially deteriorating item under the conditions of the retailer receiving the supplier trade credit and providing the customer trade credit simultaneously so as to minimize the average total cost a theorem is developed to determine the optimal replenishment policies the main contribution to literature is the inclusion of the latter type of payment delay finally through numerical examples sensitive analysis shows the influence of key model parameters

comparative statics and portfolio choices under the phantom decision model abstract this study characterizes attitudes toward uncertainty in the phantom decision model introduced by izhakian and izhakian 2015 and conducts a comparative statics analysis to examine how changes in phantom uncertainty and phantom aversion affect portfolio choices first phantom averse and more phantom averse are defined in a manner that differs from izhakian and izhakian 2015 assuming that utility functions have realization forms the above notions are characterized by the shapes of their reduction components for the portfolio choice problem that consists of one safe asset and one phantom asset we derive sufficient conditions under which changes in phantom uncertainty and phantom aversion monotonically decrease the investment in the phantom asset some familiar concepts in expected utility theory are extended to the framework of the phantom decision model

do you trust your insurer ambiguity about contract nonperformance and optimal insurance demand abstract we study optimal insurance demand for a risk and ambiguity averse consumer under ambiguity about contract nonperformance ambiguity aversion lowers optimal insurance demand and the consumer s degree of ambiguity aversion is negatively associated with the optimal level of coverage a more pessimistic belief and greater ambiguity may increase or decrease the optimal demand for insurance and we determine sufficient conditions for a negative effect we also discuss wealth effects and evaluate the robustness of our results by considering several alternative models of ambiguity aversion our findings show how ambiguity about contract nonperformance can undermine the functioning of insurance markets making it a concern for regulators caution is required though because demand reactions are only imperfectly informative about the welfare effects of ambiguity about contract nonperformance

putting risk in its proper place this paper examines preferences toward particular classes of lottery pairs we show how such concepts as prudence and temperance can be fully characterized by a preference relation over these lotteries if preferences are defined in an expected utility framework with differentiable utility the direction of preference for a particular class of lottery pairs is equivalent to signing the nth derivative of the utility function what makes our characterization appealing is its simplicity which seems particularly amenable to experimentation

review of inventory systems with deterioration since 2001 abstract this paper presents an up to date review of the advances made in the field of inventory control of perishable items deteriorating inventory the last extensive review on this topic dates back to 2001 goyal s k and giri b c recent trends in modeling of deteriorating inventory european journal of operational research 134 1 16 since then over two hundred articles on this subject have been published in the major journals on inventory control indicating the need for a new review we use the classification of goyal and giri based on shelf life characteristics and demand characteristics contributions are highlighted by discussing main system characteristics including price discounts backordering or lost sales single or multiple items one or two warehouses single or multi echelon average cost or discounted cash flow and payment delay

utilization of r d results in the home and foreign plants of multinationals this paper analyzes the utilization of r d results in the home and foreign plants of swedish multinational enterprises mnes the findings indicate that firms r d undertaken in the home country is used as an input in both the home and foreign plants of the mnes this suggests that technology is transferred to the foreign plants around four fifths of the gain in value added attributed to home r d was realized in the mnes home plants while the remaining fifth benefitted the foreign plants r d in foreign affiliates does not appear to be used as an input in home plants

increases in risk and deductible insurance abstract this paper examines how mean preserving transformations in the loss distribution affect the optimal level of deductibility in an insurance contract if marginal utility is convex increases in risk affecting losses only below the deductible are shown to lead to a reduction in coverage higher deductible which can be viewed as an increase in precautionary savings on the other hand a transformation that spreads losses more towards the tails of the distribution leads to an increase in coverage lower deductible whenever preferences exhibit nonincreasing absolute risk aversion

the simplified solution algorithm for an integrated supplier buyer inventory model with two part trade credit in a supply chain system abstract ho et al ho c h ouyang l y su c h 2008 optimal pricing shipment and payment policy for an integrated supplier buyer inventory model with two part trade credit european journal of operational research 187 496 510 discussed the integrated inventory model with two part trade credit and presented an algorithm to solve it basically ho et al s inventory model is correct and interesting however this paper indicates that the solution algorithm described in ho et al 2008 can be simplified further so this paper can not only derive the optimally closed form formulations for the optimal numbers of shipments but also develop different algorithms to improve those in ho et al 2008 numerical examples illustrate that the algorithm to locate the optimal solution is rather accurate and rapid

multinational firms technology and location this thesis consists of four essays its main theme is the location of production in multinational firms subsidizing away exports a note on strategic trade policy investigates how strategic

an inventory model with deteriorating items under inflation when a delay in payment is permissible abstract this study develops an inventory model for initial stock dependent consumption rate when a delay in payment is permissible in the inventory model shortages are not allowed the effect of the inflation rate deterioration rate initial stock dependent consumption rate and delay in payment are discussed in the study mathematical models are also derived under two different circumstances i e case i the credit period is less than or equal to the cycle time for settling the account and case ii the credit period is greater than the cycle time for settling the account besides expressions for an inventory system s total cost are derived for these two cases moreover a computational procedure and gino lasdon et al acm transactions mathematical software 4 1978 34 50 are proposed to obtain the optimal order size and cycle time the results can help managers determine the optimal total cost finally a numerical example demonstrates the applicability of the proposed model

multinationals multi plant economies and the gains from trade a general equilibrium model of a multinational enterprise based on economies of multi plant operation is developed these economies are modelled as arising from the existence of a joint input whose productivity in each production facility is independent of the number of facilities maintained by a firm the multinational thus offers the world increased technical efficiency by eliminating the duplication of the joint input that would occur with independent national firms since this technical efficiency may come at the expense of increased market power the full determinants of home country host country and world welfare are considered

the comparative statics of a competitive industry facing demand uncertainty abstract the comparative statics of a competitive industry under uncertainty with free entry is clarified and extended using the general structure of random demand due to leland 1972 while strong results are obtained for the industry few unambiguous results can be derived for the firm

human capital investment and labor supply under uncertainty we extend the theory of human capital investment under uncertainty by incorporating post investment labor supply as a choice variable we show that human capital investment decreases in response to an increase in risk about its return if such investment is an inferior activity and preferences exhibit decreasing risk aversion however if investment is normal then the effect of an increase in risk is indeterminate these results highlight the importance of obtaining empirical evidence on the income elasticity of demand for human capital investment for arriving at refutable hypotheses about the effect of risk

portfolio choice under noisy asset returns abstract the lack of a clear effect of increases in risk upon the demand for risky assets has led to many restrictions on the types of risk increases and or on consumer preferences in order to obtain unambiguous comparative statics this paper examines the particularly simple yet overlooked case of white noise added to the return distribution it is shown that kimball s standard risk aversion is sufficient for noise to lead to reduced demand for risky assets

investment climate and fdi in developing countries firm level evidence this paper uses firm level data across 77 developing countries to show that constraints related to investment climate hamper foreign direct investment fdi the main results show that physical infrastructure problems financing constraints and institutional problems discourage fdi these results are robust to an alternative definition of fdi introduction of additional explanatory variables and some breakdown analyses different sectors of activity and comparison between sub saharan africa and other developing countries the results also highlight that exporter foreign firms are more constrained in their activity by physical infrastructure hurdles and the lack of skilled workers compared to firms supplying the domestic market

the optimal inventory policies under permissible delay in payments depending on the ordering quantity abstract this paper deals with the problem of determining the economic order quantity under conditions of permissible delay in payments the delay in payments depends on the quantity ordered when the order quantity is less than the quantity at which the delay in payments is permitted the payment for the item must be made immediately otherwise the fixed trade credit period is permitted the minimization of the total variable cost per unit of time is taken as the objective function an algorithm to determine the economic order quantity is developed the results obtained in this paper generalize some already published results

an eoq model under retailer partial trade credit policy in supply chain abstract the main purpose of this paper is to investigate the retailer s inventory policy under two levels of trade credit to reflect the supply chain management situation in this paper we assume that the retailer has the powerful decision making right so we extend the assumption that the retailer can obtain the full trade credit offered by the supplier and the retailer just offers the partial trade credit to his her customer then we investigate the retailer s inventory system as a cost minimization problem to determine the retailer s optimal inventory policy under the supply chain management two easy to use theorems are developed to efficiently determine the optimal inventory policy for the retailer we deduce some previously published results of other researchers as special cases finally numerical examples are given to illustrate the theorems and obtain a lot of managerial phenomena

inventory ordering policies of delayed deteriorating items under permissible delay in payments abstract the existing literature on inventory of deteriorating items considers deterioration to begin as soon as the items are stocked however there are several deteriorating items that do not start deteriorating immediately they are held in stock some farm produce like potatoes yams and even some fruits and vegetables have this property depletion of these items as soon as they are stocked will depend on demand and when deterioration begins it will depend on both demand and deterioration in this paper we develop a mathematical model on the inventory of deteriorating items that do not start deteriorating immediately they are stocked the model also takes into cognizance the fact that in business activities nowadays customers are given some allowed period within which to settle for the goods supplied to them they can use the accrued money from sales of the supplied goods to earn interest within the allowed period they are charged interest only when they fail to settle the amount they owe the supplier at the end of the allowed period

optimal price discounting and lot sizing policies for perishable items in a supply chain under advance payment scheme and two echelon trade credits abstract many researchers have assumed that a retailer announces price discount to motivate market sales when he has competition in markets unanticipated surplus in inventory or change in the production run of a product but in real life situations there are retailers who announce price discount offer under advance payment ap scheme prior to the selling period due to the advancement of internet and on line money transactions the ap scheme is common and useful to decrease the estimation error in demand and to increase the market sales when the items are arrived to the inventory the priority will be given to the customers who use ap scheme this paper considers a supply chain where the supplier provides the retailer a full trade credit period for payments whereas the retailer offers the partial trade credit to his customers i intend to develop an economic order quantity eoq based model with perishable items in order to investigate the retailer s inventory system as a cost minimization problem under ap scheme and two echelon trade credit option mathematical theorems are developed to determine optimal price discounting and lot sizing policies and a lot of managerial phenomena are obtained through numerical examples

defining bad news changes in return distributions that decrease risky asset demand we provide a random variable characterization of the necessary and sufficient conditions for a shift of the distribution of rate of return on the risky asset in the two asset portfolio problem to reduce demand for all strictly risk averse expected utility maximizing investors we also provide random variable characterizations of the shifts that reduce both demand and expected utility for all strictly risk averse investors

a century of evolution from harris s basic lot size model survey and research agenda abstract determining the economic lot size has always represented one of the most important issues in production planning this problem has long attracted the attention of researchers and several models have been developed to meet requirements at minimum cost in this paper we explore and discuss the evolution of these models during one hundred years of history starting from the basic model developed by harris in 1913 up to today following harris s work a number of researchers have devised extensions that incorporate additional considerations the evolution of eoq theory strongly reflects the development of industrial systems over the past century here we outline all the research areas faced in the past by conducting a holistic analysis of 219 selected journal papers and trying to give a comprehensive view of past work on the eoq problem finally a new research agenda is proposed and discussed

increases in risk and linear payoffs this paper is concerned with the effect of increases in risk on optimal decision variables for the class of linear payoffs the authors show that for this class of payoffs one can extend the class of admissible increases in risk and obtain the desirable comparative statics properties they propose the definition of a relatively weak increase in risk and apply it to the case of the competitive firm with constant marginal costs the standard portfolio model and the coinsurance problem copyright 1993 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the comparative statics of cumulative distribution function changes for the class of risk averse agents abstract the primary question addressed is when does a particular change in the cumulative distribution function cdf describing a random variable always cause all risk averse decision makers to adjust the choice variable in the same direction a necessary and sufficient condition involving both the decision model and the cdf change is derived this condition allows the researcher to determine the tradeoff between assumptions on the economic model and the cdf changes which are necessary and or sufficient to yield determinate comparative static results several applications are included

income and substitution effects for mean preserving spreads a sandmo has ascribed the indeterminancy of the comparative static result for a mean preserving spread to the presence of both an income and a substitution effect in this note the compensation method needed to isolate the substitution effect identified by sandmo is made precise the compensation method is derived from a model that is sufficiently general to include many important applications of the theory of uncertainty the method is used to identify the substitution effect in sandmo s model of the competitive firm under output price uncertainty copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

stochastic dominance and optimal portfolio abstract we analyze the effect of generalized first and second order stochastic dominance changes in a returns distribution on optimal financial portfolios we show that constant relative risk aversion plays an important role in explaining how the composition of the portfolios are affected the results are interpreted in terms of two fund separation

on optimal payment time for a retailer under permitted delay of payment by the wholesaler abstract jamal et al 2000 optimal payment time for a retailer under permitted delay of payment by the wholesaler international journal of production economics 66 59 66 study a wholesaler retailer supply chain where the retailer is given a permissible credit period to pay back the dues without paying any interest to the wholesaler the problem is modeled as a cost minimization problem with two decision variables the payment time p of the retailer and the length of the inventory cycle t while the model represents in general an interesting problem we show in this note that there are a number of nontrivial flaws contained in the development of their model and therefore the solution they derived is not correct we give the correct model and derive the corresponding optimal solution

quality premiums and the firm s production decision in real world production processes the price taking firm often produces a stream of products having varying quality the firm may have limited control over the quality distribution and may only observe quality after production decisions have been made often the marketplace can and does price output according to quality examples of the situations in question are beef vegetable fruit and flower production diamond mining craft industries and any production process where factory seconds exist another though less apparent example is where there is a minimum quality standard a common practice in the production of branded goods in this case the price for production with quality below the standard is zero while production under uncertainty 3 5 6 10 11 and hedonic pricing 1 8 have received considerable attention the issue of production when faced with a price quality schedule has not in this paper we adapt the stochastic dominance approach 6 430 9 227 to determine the effect of price quality schedule changes on the optimal input choice of the firm these stochastic dominance results are then extended by relaxing some dominance constraints that have little meaning in the context of price schedule dominance then the theory of monotonic functions 2 13 7 197 is applied to study the effect of a global change from a constant price contract to a price quality schedule contract we also consider in detail the impacts of the commonly used minimum quality standard price quality schedule on production the paper is then summarized and conclusions are drawn

exploring higher order risk effects higher order risk effects play an important role in examining economic behavior under uncertainty a precautionary demand for saving has been linked to the property of prudence and the property of temperance has been used to show how the presence of an unavoidable risk affects one s behavior towards a second risk these two properties also play key roles in aversion to negative skewness and to kurtosis respectively both properties recently have been characterized by preferences over lottery pairs in simple 50 50 gambles the simplicity of this characterization is ideal for experimental investigation this article reports the results of such experiments and concludes that there is behavioral evidence for prudence but not for temperance implications of these results for both expected utility and non expected utility models are examined

effects of inflation and time value of money on an inventory model with linear time dependent demand rate and shortages abstract in the present paper an attempt has been made to investigate the effects of inflation and time value of money on an inventory model with linear time dependent demand rate shortages are allowed in this model the model developed in this article is a finite horizon t si policy inventory model to the best of the authors knowledge such type of inventory model has not been considered earlier a numerical example has also been given to illustrate the developed model

mean variance preferences and investor behaviour we study the comparative statics implications of mean variance preferences for optimal portfolios specifically we show that all risk averse mean variance investors raise their investment in a risky asset in response to a change in that asset s return distribution if and only if the change lowers both the mean and standard deviation of the return by the same percentage besides being of interest in its own right our results allow us to compare some comparative statics implications and the expected utility and mean variance models systematically

the comparative statics of changes in risk revisited abstract in this paper we consider the problem of determining the conditions under which a change in risk increases the optimal value of a decision variable for all risk averse agents for a large class of payoff functions we obtain the least constraining necessary and sufficient condition on the change in risk for signing its effect without any additional restriction on the utility function than risk aversion it entails all existing sufficient conditions as particular cases our results are applied to the linear model which describes the standard portfolio problem the necessary and sufficient condition for unambiguous comparative statics in this class of problems is termed greater central riskiness cr it is shown that cr dominance is neither stronger nor weaker than second degree stochastic dominance journal of economic literature classification number d81

the effect of uncertainty on interactive behaviour economists have studied extensively the effects of uncertainty on the optimising choices of a single agent two areas among many where this has been done are optimal savings by consumers and optimal production by firms 2 work of a more theoretical nature on uncertainty includes the seminal essay of rothschild and stiglitz i970 cheng et al i987 feder i977 kraus i979 meyer and ormiston i985 among others more recently dardanoni i988 has presented an elegant unifying treatment of the effect of uncertainty on an agent who has a two argument utility function and faces a linear constraint which relates the two arguments many situations of interest in economics go beyond the analysis of a single optimising agent since they involve several agents interacting with each other the outcomes in such cases have often been analysed as the nash equilibrium of a non cooperative game examples include a variety of oligopoly models 3 the voluntary provision of public goods 4 the tragedy of the commons 5 the behaviour of workers in self managed cooperatives6 and different kinds of strategic contests 7 surprisingly the effect of common uncertainty on the nash equilibrium of such games either specifically or in general has hardly been studied 8 in this paper we seek to provide a general analysis of the effect of uncertainty on equilibrium outcomes for the class of games in which each agent has one choice variable since this class includes the single agent case which is usually considered in the uncertainty literature and which was recently comprehensively studied in dardanoni 1 988 our paper in effect extends this literature to game situations in particular we examine when the results for games and for single agent optimisation coincide and when and how they differ our analysis focuses on the class of symmetric games but we also present some results in asymmetric cases

does risk sharing increase with risk aversion and risk when commitment is limited i consider a risk sharing game with limited commitment and study how the discount factor above which perfect risk sharing is self enforcing in the long run depends on agents risk aversion and the riskiness of their endowment when agents face no aggregate risk a mean preserving spread may destroy the sustainability of perfect risk sharing if each agent s endowment may take more than three values with aggregate risk the same can happen with only two possible endowment realizations with respect to risk aversion the intuitive comparative statics result holds without aggregate risk but it holds only under strong assumptions in the presence of aggregate risk in simple settings with two endowment values i also show that the threshold discount factor co moves with popular measures of risk sharing

stochastically dominating shifts and the competitive firm abstract the production responses of the competitive firm to stochastically dominating shifts in the distribution of output price have been the object of much research in a recent paper simpson and sproule metroeconomica 51 2 2000 168 181 present five sets of sufficient conditions any one of which may be used to jointly sign the production responses of the competitive firm to first second and third order stochastically dominating shifts this paper demonstrates that one of the conditions outlined in the above mentioned reference is unnecessarily restrictive in the case of the logarithmic and the positive power utility functions

intellectual property rights multinational firms and economic growth abstract this paper develops a model of north south trade with multinational firms and economic growth in order to analyze formally the effects of stronger intellectual property rights ipr protection in developing countries in the model northern firms invent new higher quality products multinational firms transfer manufacturing operations to the south and the southern firms imitate products produced by multinational firms it is shown that stronger ipr protection in the south i e the adoption and implementation of the trips agreement leads to a permanent increase in the rate of technology transfer to the south within multinational firms a permanent increase in r d employment by southern affiliates of northern multinationals a permanent decrease in the north south wage gap and a temporary increase in the northern innovation rate

inventory games with permissible delay in payments abstract meca et al 2004 studied a class of inventory games which arise when a group of retailers who observe demand for a common item decide to cooperate and make joint orders with the eoq policy in this paper we extend their model to the situation where retailer s delay in payments is permitted by the supplier we introduce the corresponding inventory game with permissible delay in payments and prove that its core is nonempty then a core allocation rule is proposed which can be reached through population monotonic allocation scheme under this allocation rule the grand coalition is shown to be stable from a farsighted point of view

substitution and income effects for increases in risk abstract comparative statics effects for rothschild stiglitz increases in risk can be decomposed into substitution and income effects associated with diamond stiglitz compensated increases in risk and first degree deterministic transformations providing an avenue for understanding conflicting responses to increases in risk

monotone comparative statics under uncertainty this paper analyzes monotone comparative statics predictions in several classes of stochastic optimization problems the main results characterize necessary and sufficient conditions for comparative statics predictions to hold based on properties of primitive functions that is utility functions and probability distributions the results apply when the primitives satisfy one of the following two properties i a single crossing property which arises in applications such as portfolio investment problems and auctions or ii log supermodularity which arises in the analysis of demand functions affiliated random variables stochastic orders and orders over risk aversion

strategic investments and the development of multinationals a model of multinational behavior is presented in which either the existence or absence of multinationals can be a nash equilibrium outcome the key determinant is the relationship between plant scale economies a force for geographic centralization and multiplant economies plus transport costs leading to multinationality the model predicts that multinational enterprise production arises when firm specific and transportation costs are large relative to plant scale economies the latter are both a technological and a strategic variable in the entry decision copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

international investment location decisions abstract in international location tournaments governments compete for foreign investment with tax and other short run incentives such tournaments can be won if agglomeration economies are sufficiently powerful to overcome investors desire to spread investments as a hedge against risk we focus on manufacturing investments by u s multinationals in the 1980s our econometric results suggest that agglomeration economies are indeed the dominant influence on investor calculations paradoxically short run incentives have limited apparent impact on location choice we conclude that high cost tournament play is unnecessary for countries with good infrastructure development specialized input suppliers and an expanding domestic market

portfolio choices and asset prices the comparative statics of ambiguity aversion we investigate the comparative statics of more ambiguity aversion as defined by klibanoff marinacci and mukerji 2005 in the context of the static two asset portfolio problem it is not true in general that more ambiguity aversion reduces the demand for the uncertain asset we exhibit some sufficient conditions to guarantee that ceteris paribus an increase in ambiguity aversion reduces the demand for the ambiguous asset and raises the equity premium for example this is the case when the set of plausible distributions of returns can be ranked according to the monotone likelihood ratio order we also show how ambiguity aversion distorts the price kernel in the alternative portfolio problem with complete markets for contingent claims

continuous review inventory model with delay in payments abstract in this paper we examine the continuous review inventory model under permissible delays in payments that is a retailer has the option of either paying for the goods immediately upon the receipt of the order or delay the payment till the next replenishment order where interest will be charged over the delay period expected demand will be assumed constant over time and the order lead time is considered random the objective is to find the optimal ordering quantity and reorder level that will maximize the vendor s total expected profit per unit time when payments are delayed

a joint approach for setting unit price and the length of the credit period for a seller when end demand is price sensitive this paper considers the seller buyer channel in which the end demand is price sensitive and the seller may offer trade credit to the buyer the unit price seller charged by the seller and the length of the credit period offered by the seller to the buyer both influence the final demand for the product hence we consider both to be policy variables for the seller we use the case of no credit as a benchmark in our analysis the paper provides procedures for determiningthe seller s and the buyer s policies under non cooperative as well as cooperative relationships in the non cooperative case we determine for the seller the optimal unit price and the length of the credit period for the cooperative structure we provide a procedure for characterizingpareto efficient solutions r 2002 elsevier science b v all rights reserved

a note on portfolio dominance dominated if it reduces the demand for the risky asset by all risk averse agents irrespective of the risk fiee rate we show that the condition obtained by landsberger and meilijson 1993 while necessary is not sufficient for portfolio dominance and we present an exact necessary and sufficient condition

effects of inflation and the time value of money on order quantity and allowable shortage abstract this paper investigates the effects of inflation and time value of money on the optimal ordering quantities and the maximum allowable shortage in a finite replenishment inventory system the present value of total cost incurred in this inventory system is developed first then an optimal order quantity and maximum allowable shortage are obtained by using a search procedure the effect of inflation and time value of money was investigated under given sets of values of inflation and discount rates this study shows that the optimal order quantity and maximum allowable shortage vary with the change in difference between inflation and time discount computational results indicate that this effect on the system becomes more significant with the increase of the difference between inflation rate and time discount rate