price inertia and market structure empirical evidence from austrian manufacturing 1993 price inertia and market structure empirical evidence from austrian manufacturing applied economics vol 25 no 9 pp 1175 1186

inventory and credit decisions for time varying deteriorating items with up stream and down stream trade credit financing by discounted cash flow analysis abstract in today s competitive markets most firms in united kingdom and united states offer their products on trade credit to stimulate sales and reduce inventory trade credit is calculated based on time value of money on the purchase cost i e discounted cash flow analysis recently many researchers use discounted cash flow analysis only on the purchase cost but not on the revenue which is significantly larger than the purchase cost and the other costs for a sound and rigorous analysis we should use discounted cash flow analysis on revenue and costs in addition expiration date for a deteriorating item e g bread milk and meat is an important factor in consumer s purchase decision however little attention has been paid to the effect of expiration date hence in this paper we establish a supplier retailer customer supply chain model in which a the retailer receives an up stream trade credit from the supplier while grants a down stream trade credit to customers b the deterioration rate is non decreasing over time and near 100 percent particularly close to its expiration date and c discounted cash flow analysis is adopted for calculating all relevant factors revenue and costs the proposed model is an extension of more than 20 previous papers we then demonstrate that the retailer s optimal credit period and cycle time not only exist but also are unique thus the search of the optimal solution reduces to a local one finally we run several numerical examples to illustrate the problem and gain managerial insights

pricing and lot sizing polices for perishable goods when the demand depends on selling price displayed stocks and expiration date abstract price is a major factor on the demand based on marketing and economic theory in addition the demand for perishable products also depends on its freshness moreover it is a well known fact that increasing stock display e g fresh fruits vegetables baked goods may encourage consumers to purchase more this paper first proposes an inventory model that stipulates the demand explicitly in a multivariate function of price freshness and displayed stocks it may be profitable to have a closeout sale at a markdown price and always keep on hand displayed stocks fresh and plentiful if the demand is freshness and stock dependent hence the traditional assumption of zero ending inventories is relaxed to a non zero ending inventory as a result the objective is to determine three decision variables i e unit price cycle time and ending inventory level in order to maximize the total profit then it is demonstrated that the total profit is strictly pseudo concave in those three decision variables which reduces the search for solutions to a unique local maximum finally numerical examples to illustrate the theoretical results and to highlight managerial insights are presented

the intertemporal stability of the concentration margins relationship using a longitudinal data base we find that there has been a substantial narrowing of the spread between the price cost margins of concentrated and unconcentrated industries including measures of macroeconomic fluctuations into standard price cost margin regressions we find significant differences in cyclical behavior across market structure we also explore a possible explanation unionization for differences in cyclical behavior finally we investigate the degree to which our results are affected by the potential simultaneity of concentration advertising and the price cost margin

integrating deterioration and lifetime constraints in production and supply chain planning a survey abstract items with short lifetimes that are subject to deterioration are important in the business world research has a long tradition in integrating deterioration and value loss effects into mathematical models for inventory planning and control where such effects are understood as a general loss or shrinkage of inventory however there has been little work in the modeling of lifetime restrictions of items to prevent wastage and disposals especially in a dynamic planning context globalization and other trends extend the consideration of single companies to whole supply chains implying increased coordination and information needs this is important as planning decisions impact lead times and thus the quality of items in the whole supply chain products that exceed their useful lifetime can impose high costs due to inventory loss or the need to rework them this implies increased utilization of scarce resources e g machine time metals and or energy thereby increasing co 2 levels we survey the state of the art regarding depreciation effects and the modeling of lifetime constraints as well as a classification of models following business planning functions of the value chain a critical evaluation of approaches and their limitations is provided highlighting directions for future research

inventory models with ramp type demand rate partial backlogging and weibull deterioration rate in this paper an inventory model with general ramp type demand rate time dependent weibull deterioration rate and partial backlogging of unsatisfied demand is considered the model is studied under the following different replenishment policies a starting with no shortages and b starting with shortages the model is fairly general as the demand rate up to the time point of its stabilization is a general function of time the backlogging rate is any non increasing function of the waiting time up to the next replenishment the optimal replenishment policy for the model is derived for both the above mentioned policies

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

monetary shocks market structure and administered prices this paper examines interindustry variation in the response of prices to nominal aggregate demand disturbances this subject has been the focus of numerous investigations in recent years 7 8 9 10 11 12 13 17 and 28 a long standing motivation for this attention has been debate over gardiner means s 22 administered price ap thesis which in broad terms seems to imply that cyclical price flexibility diminishes with increases in market power more recently researchers have focused on imperfect competition as a source of price stickiness because of the importance of this mechanism for the emerging new keynesian analysis of business cycles 1 3 6 thus far however the empirical studies on this subject have reported mixed results and the relationship between imperfect competition and price flexibility remains unsettled curiously an alternative to the market power explanation of inter industry variation in cyclical price flexibility has been largely ignored in these past studies even though it lies at the heart of the new classical macro models the lucas 21 supply function lsf which is key to the striking policy results of these models predicts that output will respond more to a demand shockand by implication absolute prices will respond less in those industries with a history of greater variation in their relative demand or price industry level investigation of price movements thus provides a partial test of the lsf which like the ap thesis remains open to question this paper presents evidence on the explanatory power of both the ap and the lsf approaches we begin with a price change equation that can be derived from a standard lsf model as shown by robert gordon 15 an important feature of this specification is its distinction between anticipated and unanticipated money growth we then show that this same price equation can be given an ap interpretation relying principally on recent work of rotemberg and saloner 29 both approaches predict variation across industries in their price response to unanticipated money growth but they offer different explanations of the cause the lsf theory suggests dependence on the industry s relative demand instability the ap models suggest dependence on industry structure evidence on the competing theories is developed from annual price data on 328 four digit

optimal order quantity and selling price over a product life cycle with deterioration rate linked to expiration date it is evident that the lower the price the higher the demand therefore price is an important factor in a consumer s purchasing decision additionally for today s health conscious consumers product freshness is another important factor in purchasing decisions since product freshness declines over time today s health conscious consumers prefer a perishable product with a longer sell by date to a shorter one moreover a product s demand rate moving through its life cycle can be approximately represented by a trapezoid type pattern which includes constant demand increasing demand and decreasing demand as special cases in existing literature several researchers have developed inventory models for trapezoidal demand however they failed to consider pricing strategy product freshness linked to expiration date and purchasing cost in this study we enhance previous models by 1 taking pricing into consideration 2 exploring deterioration rate linked to expiration date and 3 adding an appropriate non constant purchasing cost we then derive theoretical results and run numerical examples to obtain managerial insights for instance the total profit without purchasing cost is significantly lower than that with purchasing cost included also if the cost of lost sales is improperly low then the total profit may become negative due to a large amount of lost sales

business cycles and the relationship between concentration and price cost margins using a newly constructed panel data base we examine changes in price cost margins in 284 manufacturing industries between 1958 and 1981 a key finding is a dramatic narrowing of the spread between the margins of concentrated and unconcentrated industries over this period we provide evidence that this narrowing is a result of the greater sensitivity of price cost margins in more concentrated industries to demand fluctuations this finding is robust to the inclusion of other industry variables and to measures of import competition the results indicate that cross sectional estimates of the concentration margins relationship are likely to be both biased and misleading

stationary ramsey equilibria under uncertainty abstract deterministic dynamic equilibrium models with borrowing constraints and heterogeneous agents exhibit stationary solutions where the most patient household owns the economy s capital stock an example shows that this result does not carry over to stationary stochastic environments we prove under some conditions the existence of a stationary rational expectations equilibrium in two related setups the first is the existence of a stationary nash equilibrium where each agent s payoff depends on his capital process and the capital processes of the remaining agents the second existence theorem applies to a stationary competitive equilibrium model journal of economic literatureclassification numbers e13 e21 d80

a near rational model of the business cycle with wage and price inertia this paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects the individual loss to agents with inertial price wage behavior is second order in terms of the parameter describing the shock while the effect on real economic variables is first order thus significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses

inventory models for deteriorating items with maximum lifetime under downstream partial trade credits to credit risk customers by discounted cash flow analysis abstract getting loans from banks are almost impossible after 2008 global financial crisis as a result about 80 of companies in united kingdom and united states offer their products on various short term free interest loans i e trade credit to customers numerous researchers and academicians apply discounted cash flow dcf analysis merely to compute the interest earned and charged during the credit period but not to the revenue and other costs which are considerably larger than the interest earned and charged for a rigorous analysis the dcf on all relevant costs is applied in addition many products deteriorate continuously and cannot be sold after their maximum lifetimes or expiration dates however very few researchers and investigators have implemented the product lifetime expectance into their models in this paper a supplier retailer customer chain system is developed in which the retailer gets an upstream full trade credit from the supplier whereas offers a downstream partial trade credit to credit risk customers the deterioration rate is non decreasing over time and near 100 particularly close to its expiration date and dcf analysis is applied to compute all relevant costs this paper demonstrates that the retailer s optimal replenishment cycle time not only exists but also is unique thus the search of the global optimal reduces to finding a local solution finally several numerical examples and sensitivity analysis are performed in order to illustrate the problem and obtain managerial insights

retrospectives the origins of the representative agent this paper examines alfred marshall s invention of the representative firm marshall first used the representative firm in order to describe an industry supply curve for an industry with heterogeneous firms despite marshall s limited use of the notion the representative agent was extensively criticized as an ephemeral useless construct that was unable to account for economic growth and that ignored important heterogeneities the criticisms succeeded in banishing the representative agent from economics these initial criticisms are also shown to apply to modern uses of the representative agent as well

a note on seller s optimal credit period and cycle time in a supply chain for deteriorating items with maximum lifetime in 2014 wang et al 2014 extended the model of lou and wang 2012 to incorporate the credit period dependent demand and default risk for deteriorating items with maximum lifetime however the rates of demand default risk and deterioration in the model of wang et al 2014 are assumed to be specific functions of credit period which limits the contributions in this note we first generalize the theoretical results of wang et al 2014 under some certain conditions furthermore we also present some structural results instead of a numerical analysis on variation of optimal replenishment and trade credit strategies with respect to key parameters

monopolistic competition and the effects of aggregate demand how important is monopolistic competition to an understanding of the effects of aggregate demand on output we ask the question at three levels can monopolistic competition by itself explain why aggregate demand movements affect output can it together with other imperfections generate effects of aggregate demand in a way that perfect competition cannot if so can it give an accurate account of the response of the economy to aggregate demand movements the answers are no yes and yes

relative prices concentration and money growth comment in a recent article in this review 1983 henry chappell and john addison provide new evidence on the administered pricing thesis that links an industry s price behavior over the business cycle to its structural features most notably some measure s of the monopoly power possessed by firms in that industry the approach taken by chappell and addison c a is both sensible and novel essentially they regress aggregate inflation measures for different groups of manufacturing industries on a distributed lag in monetary growth the industry groups are distinguished by their degree of concentration low medium or high and the validity of the administered pricing thesis is then tested by comparing the time pattern of response in each group to monetary impulses chappell addison conclude that this test reveals no clear response differences between the sectors of varying concentration and hence reject the hypothesis of concentrationrelated administered prices the purpose of this comment is to show that the c a conclusions are overly strong their focus on the mean lag as the sole basis of interindustry comparisons obscures important differences in the pricing performance of the lowand high concentrated sectors more fundamentally the c a test is risspecified in that it fails to differentiate between the expected and unexpected components of money growth as suggested by robert barro 1977 when the analysis allows for these modifications the c a data reveal considerable support for the administered pricing hypothesis 1 the chappell addison model

the rigidity of prices this paper uses evidence on individual transaction prices to analyze price behavior the evidence shows that for many transactions pricesremain rigid for periods exceeding one year the rigidity of price ispositively correlated with industry concentration for several productsthe correlation of price changes across buyers is low the paper alsoinvestigates the relationship between price rigidity price change andthe length of time a buyer and seller have been doing business together the author interprets the evidence as emphasizing the importance of nonprice rationing and the inadequacy of models in whichprice movements alone clear markets copyright 1986 by american economic association

optimal pricing and advertising policies for new product oligopoly models in this paper our previous work on monopoly and oligopoly new product models is extended by the addition of pricing as well as advertising control variables these models contain bass s demand growth model and the vidale wolfe and ozga advertising models as well as the production learning curve model and an exponential demand function the problem of characterizing an optimal pricing and advertising policy over time is an important question in the field of marketing as well as in the areas of business policy and competitive economics these questions are particularly important during the introductory period of a new product when the effects of the learning curve phenomenon and market saturation are most pronounced we consider first the monopoly case with linear advertising cost exponential demand and three different pricing rules the optimal variable pricing the instantaneous marginal pricing and the optimal constant pricing rules several theoretical results are established for these rules including the facts that the instantaneous marginal pricing rule is a myopic version of the optimal pricing rule and the optimal constant pricing rule is a weighted average over time of the instantaneous marginal pricing rule another surprising result is that after the market is at least half saturated a pulse of advertising must be preceded by a significant drop in price numerical solutions of a number of examples are discussed oligopolistic models are analyzed as nonzero sum differential games in the rest of the paper the state and adjoint equations are easy to write down but impossible to solve in closed form hence we describe how to reformulate these models as discrete differential games and give a numerical algorithm for finding open loop nash solutions the latter was used to solve three triopoly models in each case it was found that optimal prices and advertising rates start high and steadily decline

lot sizing policies for deteriorating items with expiration dates and partial trade credit to credit risk customers abstract in practice a credit worthy retailer frequently receives a permissible delay on the entire purchase amount without collateral deposits from his her supplier i e an up stream full trade credit by contrast a retailer usually requests his her credit risk customers to pay a fraction of the purchase amount at the time of placing an order and then grants a permissible delay on the remaining balance i e a down stream partial trade credit in addition many products such as blood banks pharmaceuticals fruits vegetables volatile liquids and others deteriorate constantly and have their expiration dates however not many researchers have taken the expiration date of a deteriorating item into consideration the purpose of this paper is to establish optimal lot sizing policies for a retailer who sells a deteriorating item to credit risk customers by offering partial trade credit to reduce his her risk the proposed model is a generalized case of many previous models by applying theorems in pseudo convex fractional functions we can easily prove that the optimal solution not only exists but is also unique moreover we propose three discrimination terms which can easily identify the optimal solution among all possible alternatives finally some numerical examples are presented to highlight the theoretical results and managerial insights

price inertia and policy ineffectiveness in the united states 1890 1980 this paper introduces a new approach to the empirical testing of the lucas sargent wallace lsw policy ineffectiveness proposition which compares the lsw hypothesis with an alternative that states that prices respond fully in the long run but only gradually in the short run to nominal aggregate demand disturbances the empirical equations estimated for a new set of quarterly data extending back to 1890 exhibit uniformly high responses of real output and low responses of price changes to anticipated changes in nominal gnp the paper compares and tests three alternative methods of introducing persistence effects into the lsw framework

optimal conflict in preference assessment conflict arises indecision making when the choice alternatives present strong advantages and disadvantages over one another that is when the trade offs involved are large conflict affects human response to choice in particular it increases decision difficulty and response unreliability on the other hand larger trade offs i e higher conflict reveal more information about an individual s preferences and mitigate the influence of measurement unreliability on preference model estimation this suggests somewhat counterintuitively that there may exist some optimal level of conflict for efficient measurement of preferences how to determine this level this issue is examined from behavioral and analytical angles we outline a general analysis of the interaction between trade off size and modeling accuracy and demonstrate its application on a simple example the kind of analysis developed here can be conveniently implemented in a computer spreadsheet and would be especially valuable when large amounts of preference data are to be collected as in consumer preference studies experimental research and contingent valuation surveys