reordering strategies for a newsboy type product abstract this paper considers the very common situation in which a single period newsboy type product may be ordered or produced twice during a season period we show that the explicit consideration of this reorder opportunity makes the newsboy problem very much richer the specific version considered in this paper allows a reorder during mid season after the early season demand has been observed and this reorder arrives after a given lead time the demand distributions during the various portions of the season may have very general distribution forms also the late season and early season demands may be dependent solution procedures are developed to find the best way to exploit this reorder opportunity and our numerical solutions indicate that this reorder opportunity can improve profits considerably as long as the product s profit margin is not very high other real world variations of this two order newsboy problem are briefly discussed

on sales effort and pricing decisions under alternative risk criteria abstract in the literature different risk criteria are proposed for risk averse decision making but it is often unclear which risk criteria should be used and what their differences may be this study investigates this problem when a risk averse make to order firm decides its pricing and sales effort two factors affecting demand we consider alternative risk criteria commonly used in the literature namely expected utility theory eut mean variance mv mean semideviation ms value at risk var conditional value at risk cvar and loss aversion la we find that all of these criteria lead to similar qualitative behaviors regarding how risk loss averse decisions deviate from risk neutral ones a particularly interesting result is that the form of demand randomness i e additive or multiplicative can completely reverse the effect of risk loss aversion in certain cases we also find that the risk aversion models i e eut mv ms var and cvar are essentially equivalent in inducing the same set of optimal solutions under adverse market states however loss aversion is a mild version of risk aversion in that the la model can only lead to a subset of the solutions generated by other models these results may not be valid for other applications such as the newsvendor pricing problem so we can conclude that the relationship between alternative risk criteria is case sensitive and should be evaluated more carefully

on the integration of production and financial hedging decisions in global markets we study the integrated operational and financial hedging decisions faced by a global firm who sells to both home and foreign markets production occurs either at a single facility located in one of the markets or at two facilities one in each market the company has to invest in capacity before the selling season starts when the demand in both markets and the currency exchange rate are uncertain the currency exchange rate risk can be hedged by delaying allocation of the capacity to specific markets until both the currency and demand uncertainties are resolved and or by buying financial option contracts on the currency exchange rate when capacity commitment is made a mean variance utility function is used to model the firm s risk aversion in decision making we derive the joint optimal capacity and financial option decision and analyze the impact of the delayed allocation option and the financial options on capacity commitment and the firm s performance we show that the firm s financial hedging strategy ties closely to and can have both quantitative and qualitative impact on the firm s operational strategy the use or lack of use of financial hedges can go beyond affecting the magnitude of capacity levels by altering global supply chain structural choices such as the desired location and number of production facilities to be employed to meet global demand

environmental performance impacts of vendor buyer coordination abstract effective coordination is a hallmark of successful supply chain management without such coordination vendors and buyers will act independently to make decisions that optimize their own objectives e g maximize their respective profits or minimize their costs this non coordinated approach is unlikely to be optimal when one considers the supply chain as a whole most vendor buyer coordination research concentrates only on an objective of minimizing total system costs but with the increasing environmental awareness in business and the general public many organizations acknowledge that strategies and practices which incorporate environmental considerations are essential to acquire a competitive advantage the objectives of this research are concerned not only with the economic impact of vendor buyer coordination on the organizations involved but also with the wider effects on society such as the effects of pollution on the environment this research demonstrates how to effectively incorporate environmental issues into vendor buyer coordination first we study the impacts of cost minimizing vendor buyer coordination models on environmental performance when compared with independent non coordinated optimization second we develop a single vendor multi buyer coordination model that includes both costs and environmental performance measures in its objective function a numerical example and a real case study show how both the total system cost and the environmental performance can be simultaneously improved

policy reform and labour demand in branches of sri lankan manufacturing industry many policy reforms in developing countries aim to remove factor market distortions whether such reforms reduce unemployment depends partly on the substitution possibilities between labour and other factors of production this paper examines labour demand in seven branches of sri lankan manufacturing industry using data on 4 digit industrial categories over the 1990 to 1997 period the box cox transformation is used to allow for flexible and data dependent elasticities the elasticity of capital labour substitution varies widely across the branches of industry and is usually variable rather than constant the average long run own wage elasticity of labour demand for the manufacturing sector is estimated as 0 80 so factor price policy should have an important effect on labour demand in this setting

cliometrics and time series econometrics some theory and applications the paper discusses a range of modern time series methods that have become popular in the past 20 years and considers their usefulness for cliometrics research both in theory and via a range of applications issues such as spurious regression unit roots cointegration persistence causality structural time series methods including time varying parameter models are introduced as are the estimation and testing implications that they involve applications include a discussion of the timing and potential causes of the british industrial revolution income convergence and the long run behaviour of english real wages 1264 1913 finally some new and potentially useful developments are discussed including the mildly explosive processes graphical modelling and long memory

the component procurement problem for the loss averse manufacturer with spot purchase abstract this paper studies the purchasing behaviour of a loss averse engineer to order manufacturer who purchases a key component for his final product from a supplier under a single wholesale price contract with spot purchase opportunities where both the product demand and the component spot price are uncertain through newsvendor type of models we analyze several key issues including the effects of the manufacturer s loss aversion and the effects of demand and spot price uncertainties on the manufacturer s decision behaviour we find that the purchasing behaviour of the loss averse manufacturer differs from those of the risk neutral and risk averse ones specifically we identify some sufficient conditions under which the loss averse manufacturer may purchase a larger order quantity in advance when demand becomes more uncertain or when the price becomes more uncertain we also discuss the two wholesale price contract and show that fixing the emergency supply price may lead to a smaller order quantity

the newsvendor problem review and directions for future research in this paper we review the contributions to date for analyzing the newsvendor problem our focus is on examining the specific extensions for analyzing this problem in the context of modeling customer demand supplier costs and the buyer risk profile more specifically we analyze the impact of market price marketing effort and stocking quantity on customer demand how supplier prices can serve as a coordination mechanism in a supply chain setting integrating alternative supplier pricing policies within the newsvendor framework and how the buyer s risk profile moderates the newsvendor order quantity decision for each of these areas we summarize the current literature and develop extensions finally we also propose directions for future research

sequential correlated equilibria in stopping games in many situations such as trade in stock exchanges agents have many opportunities to act within a short interval of time the agents in such situations can often coordinate their actions in advance but coordination during the game consumes too much time an equilibrium in such situations has to be sequential in order to handle mistakes made by players in this paper we present a new solution concept for infinite horizon dynamic games which is appropriate for such situations a sequential normal form correlated approximate equilibrium under additional assumptions we show that every such game admits this kind of equilibrium

optimal ordering quantities for multi products with stochastic demand return cvar model abstract multi product ordering problem with stochastic demand is often optimized by the expected cost reduction or the expected profit improvement in most of previous works moreover risk preference of decision maker is often ignored evidently this approach is impracticable when the corresponding volatility is larger based on the outstanding characteristics of conditional value at risk cvar as a risk measure the paper proposes an optimal order model for multi product with cvar constraints also the model is finally formulated as a linear programming problem the model is simulated for the case of a newsvendor to analyze to what degree it succeeds the solution in fact is bound consistent fully with the decision maker s intuition on return risk decision making finally results of return cvar model and the classical model are compared and shows that return cvar model is more flexible than the classical model

the newsstand problem a capacitated multiple product single period inventory problem abstract practically all of the many earlier papers on the newsboy problem consider a single newsboy product with no capacity constraint this paper presents formulations and solution procedures for handling multiple newsboy type products under two cases a one resource capacity constraint and b multiple resource constraints for case a we present a necessary extension to the classical hadley whitin result for handling general demand distributions for case b we present a solution procedure that can efficiently handle the common situation where a very large number of products are involved

inventory control with an exponential utility criterion a base stock policy is shown to be optimal when a dynamic version of the news vendor model is optimized with respect to an exponential utility criterion

multi product newsvendor problem with value at risk considerations abstract we consider the single period stochastic inventory newsvendor problem with downside risk constraints the aim in the classical newsvendor problem is maximizing the expected profit this formulation does not take into account the risk of earning less than a desired target profit or losing more than an acceptable level due to the randomness of demand we utilize value at risk var as the risk measure in a newsvendor framework and investigate the multi product newsvendor problem under a var constraint to this end we first derive the exact distribution function for the two product newsvendor problem and develop an approximation method for the profit distribution of the n product case n 2 a mathematical programming approach is used to determine the solution of the newsvendor problem with a var constraint this approach allows us to handle a wide range of cases including the correlated demand case that yields new results and insights the accuracy of the approximation method and the effects of the system parameters on the solution are investigated numerically

risk sensitive dynamic market share attraction games we present partial results showing that risk sensitive oligopolists would spend less on advertising than would their risk neutral counterparts the model is an infinite horizon stochastic game in which each firm s goodwill is a random function of both its own and its competitors current and past advertising expenditures single period firm profits have a market share attraction form each firm seeks to maximize its expected exponential utility of the sum of discounted profits we analyze the impact that risk sensitivity and other parameters have on equilibrium advertising strategies by exploiting the special structure of the stochastic game model journal of economic literatureclassification number c73

origins and pathways of innovation in the third industrial revolution this study examines the factors that shaped the long term evolution of the ict industry in sweden 1950 2013 using a new historical microdatabase on actual innovation output the driving forces and technological interdependencies in the third industrial revolution are chronicled the results of this study support some stylized facts about technological interdependencies in general purpose technologies a closely knitted set of industries have provided positive and negative driving forces for the development of ict innovations the historical evolution of gpts can in this perspective be described as a sequence of development blocks

optimal market making with risk aversion market makers have the obligation to trade any given amount of assets at quoted bid or ask prices and their inventories are exposed to the potential loss when the market price moves in an undesirable direction one approach to reduce the risk brought by price uncertainty is to adjust the inventory at the price of losing potential spread gain using stochastic dynamic programming we show that a threshold inventory control policy is optimal with respect to an exponential utility criterion and a mean variance trade off model symmetric and monotone properties of the threshold levels are also established

electrification and energy productivity abstract energy productivity is crucial for sustainable development we use cointegration analyses to investigate the effect of electricity on energy productivity in swedish industry from 1930 to 1990 electricity augmented energy productivity in those industrial branches that used electricity for multiple purposes this productivity effect goes beyond book keeping effects i e it is not only the result of electricity being produced in one sector taking the energy transformation losses and consumed in another receiving the benefits