government debt government spending and private sector behavior comment in a recent issue of this review 1983 roger kormendi relied upon the work of martin bailey 1962 1971 and robert barro 1974 to develop an alternative approach to modeling private sector consumptionsaving behavior based on rational evaluation of the consequences of government fiscal policy p 995 briefly this approach involves determining to what extent government spending substitutes for private consumption and to what extent government debt is net wealth and thereby also affects private consumption this consolidated approach to examining private sector consumption is not only novel but appears at a time when there is widespread interest as well as controversy over the effects of government fiscal policy it therefore seems only appropriate to examine further the results obtained by kormendi not to criticize them but rather to explore their robustness this comment specifically explores the sensitivity of kormendi s results to alternative time periods of estimation to the differentiation between federal debt and state and local government debt and to the measurement of government debt particularly par vs market value

an economic order quantity model with partial backordering and all units discount abstract the classic economic order quantity model assumes that the unit purchasing cost is not based on the order quantity in practice a supplier may offer purchasers an all units discount we develop a model and solution procedure for the eoq with all unit discounts and partial backordering at a constant rate we show and illustrate with a numerical example how that model can be used to find the solution for the eoq with discount and full backordering a multi factor experiment is used to gain insights into the improvement in performance of the proposed procedure relative to using the basic eoq or the eoq with full backordering and to identify the model parameters that have the greatest impact on the model s performance

government debt government spending and private sector behavior reply roger kormendi 1983 presents apparently strong evidence that in contrast to the standard view consumption is not reduced by taxes but is reduced by government expenditure he interprets his results as supporting a consolidated approach to private sector behavior in which consumers effectively internalize the government budget constraint specifically he claims that consumers regard government spending as the true measure of the government s claim on private resources and so do not respond to changes in taxes given spending this is basically the approach advocated by robert barro 1974 and known also as the ricardian equivalence proposition hereafter rep kormendi s results appears to contradict other empirical work based on the life cycle hypothesis for example martin feldstein 1982 modigliani 1984a sterling 1985 although results similar to his have been reported see david aschauer 1985 john seater and roberto mariano 1985 and the references in kormendi in our view kormendi s analysis is seriously flawed his heuristic derivation of the consumption function leads him to a specification of the aggregate consumption function which is not consistent with the life cycle hypothesis lch or with rep and to questionable methods of estimation once his conceptual and methodological errors are corrected his formulation and more generally the rep hypothesis are found to receive little empirical support in the next section we rely on the lch to derive an aggregate consumption function which shows explicitly how government expenditure and taxes should effect private consumption this derivation helps to bring out the observable implications of rep which are shown to be equivalent to a limiting form of the lch in which the planning horizon is infinite it also serves to clarify the appropriate specification of the variables appearing in the consumption function next section ii reports our empirical estimates and tests section iii compares our results with kormendi s finally section iv reports the results of endeavors to improve the specification of fiscal variables notably by distinguishing between permanent and transitory tax changes

criteria for evaluating purchase quantity decisions in response to future price increases abstract previous research for determining ordering strategies in response to known future price increases has not incorporated the actual cost functions it is shown that when these functions are utilized the optimal strategy depends on the time horizon studied an alternative criterion is offered which incorporates the actual cost comparisons and which provides recommendations consistent with previous research the formulation given provides a general framework for studying ordering strategies based on price changes

a co ordination model combining incentive scheme and co ordination policy for a single vendor multi buyer supply chain abstract incentive scheme and co ordination policy are substantial components for the co ordination of a decentralized supply chain system but there is little work combining the two components as a single decision model li and wang 2007 this paper proposes a model which incorporates both incentive and co ordination issues into a single co ordination model for a single vendor multi buyer supply chain in the proposed model the co ordination is achieved by synchronizing ordering and production cycles while price discount which is based on the buyers order intervals is used as the incentive to motivate buyers to participate in the co ordination while the vendor is benefited from the co ordination by synchronized cycles the proposed price discount scheme can guarantee that a buyer s total relevant cost of co ordination will be reduced when compared with independent optimization more importantly the proposed price discount scheme does not require any cost information from the buyers

a note on optimal ordering policies in response to a discount offer abstract in this short note we are suggesting a marginal analysis approach over the approach used by sarker and al kindi 2006 optimal ordering policies in response to a discount offer international journal of production economics 100 2 195 211 for developing models for determining the optimal ordering policy for an item for which the supplies offer a price discount during a sale period

models of joint economic lot sizing problem with time based temporary price discounts abstract in this research we develop mathematical models of joint economic lot sizing problem jelp in a situation when a supplier offers time based temporary price discounts to a buyer during a sale period to respond this the buyer places a special order with higher quantity in literature it has been assumed that the buyer tends to place the special order at the end of the sale period we relax this assumption by considering the time when the buyer places the special order during the sale period i e the sooner the special order took place the higher discount received in our proposed models called joint economic lot sizing problem with time based temporary price discounts jelptpd we devide the sale period into k phases the buyer must place the special order in one of these phases the highest discount will be given when the special order is placed at the first phase while the lowest one will be given when it is placed at the k th phase there are two cases discussed the first case is when the sale period is uniformly divided while the second case is when the sale period is proportionally divided following some rules our numerical experiments showed the behavior of the buyer to respond the temporary price discount offers in major experiments the buyer shifted the decision on placing the special order in the earlier phases instead of the end of the sale period

buyer s response to a temporary price reduction incorporating freight costs abstract in this paper we characterize the buyer s response to a temporary price reduction although there have been many studies that have considered the above problem most of those studies assume that the buyer orders fob free on board destination and that the freight charges are included in the supplier s unit price our model thus becomes applicable for a buyer whose strategy is to include transportation costs in their purchase decisions the buyer may want direct control on his inbound logistics costs the company may have outsourced its logistics function and as a result is charged for freight as invoiced by the public motor carrier in some cases the supplier may only allow for orders that are fob origin our model allows for less than truckload as well as truckload rates freight cost for a ltl shipment is modeled using tariffs set by public carriers in practice these tariffs generally involve 6 7 breakpoints in terms of the weight of the shipment another complication in practice is that the shipper buyer has an option to over declare the weight of the shipment

how many parts to make at once reprinted from factory the magazine of management volume 10 number 2 february 1913 pp 135 136 152 interest on capital tied up in wages material and overhead sets a maximum limit to the quantity of parts which can be profitably manufactured at one time set up costs on the job fix the minimum experience has shown one manager a way to determine the economical size of lots

a comparison of canadian and japanese cognitive styles implications for management interaction many american and canadian companies seeking to form joint ventures and alliances with japanese companies or to negotiate contracts with them have discovered that the interaction can be difficult and frustrating value differences and preferences for different management practices have been identified that contribute to these interaction problems however little research has investigated potential differences in cognitive style that might also contribute to intercultural conflict this study compares samples of canadian and japanese mba students using the myers briggs type inventory mbti and links the findings to interaction difficulties reported in the literature

optimal eoq for announced price increases in infinite horizon in this paper we consider an infinite horizon economic order quantity eoq model with single announced price increase with an option of placing a special order just before the price increase takes effect we extend earlier work where it is assumed that the special order is an integral multiple of the new eoq quantity in the process we show that when the assumption of integrality is not valid the earlier approach of minimizing the cost difference over a finite horizon is no longer valid and establish the periodicity of cost difference function next we show that the cesaro limit of the function exists and utilize that to derive the optimal special order quantity we find that the optimal special ordering policy is of s s type

a two level supply chain with partial backordering and approximated poisson demand abstract we consider a two level supply chain with a number of identical independent retailers at the lower echelon and a single supplier at the upper echelon controlled by continuous review inventory policy r q each retailer experiences poisson demand with constant transportation times we assume constant lead time for replenishing supplier orders from an external warehouse to the supplier and unsatisfied retailer orders are backordered in the supplier we assume that the unsatisfied demand is partially backordered in the identical retailers the partially backordering policy is implemented in the identical retailers using an explicit control parameter b which limits the maximum number of backorders allowed to be accumulated during the lead time we develop an approximate cost function to find optimal reorder points for given batch sizes in all installations the optimal value of b in the identical retailers and the related accuracy is assessed through simulation

closed form solutions for wee s and martin s eoq models with a temporary price discount abstract in this article we use closed form solutions to solve wee and yu 1997 deteriorating inventory model with a temporary price discount and martin s 1994 eoq model with a temporary sale price in wee and yu 1997 and martin s 1994 the benefits during the temporary price discount purchase cycle are represented by their objective functions wee and yu 1997 and martin 1994 only used search methods to find approximate solutions following the theorems we suggested you can find closed form solution directly when there are integer operators involve in an objective function using the data of wee and yu 1997 and martin 1994 we can find the results are more quick and more accurate

capital structure and inventory management the temporary sale price problem the paper discusses the use of adjusted present value techniques in a problem of inventory management the temporary sale price problem in the presence of equity or debt financing while traditional net present value approaches produce results very similar to those of the average cost approach our consideration of the capital structure of the firm opens the way to theoretically and numerically different inventory policies

monetary policy rule of thumb consumers and external habits a g7 comparison this paper extends the standard new keynesian dynamic stochastic general equilibrium dsge model to agents who cannot smooth consumption i e spenders and are affected by external consumption habits although these assumptions are not new their joint consideration strongly affects some theoretical and empirical results addressed by the recent literature by deriving closed form solutions we identify different demand regimes and show that they are characterized by specific features regarding dynamic stability and monetary policy effectiveness we also evaluate our model by stochastic simulations obtained from the bayesian parameters estimates for the g7 economies from posterior impulse responses we address the empirical relevance of the different regimes and provide comparative evidence on the heterogeneity of monetary policy effects among countries

two warehouse partial backlogging inventory models for deteriorating items under inflation abstract in many real life situations the practical experiences reveal that some but not all customers will wait for backlogged items during a shortage period such as for fashionable commodities or high tech products with short product life cycle the longer the waiting time is the smaller the backlogging rate would be according to such phenomenon taking the backlogging rate into account is necessary thus i here extend the models introduced in yang 2004 two warehouse inventory models for deteriorating items with shortages under inflation european journal of operational research 157 2 344 356 to incorporate partial backlogging and then compare the two two warehouse inventory models based on the minimum cost approach the study shows that the optimal solution not only exists but also is unique and model 2 is still less expensive to operate than model 1 if the factors of partial backlogging and inflationary effect are considered finally some numerical examples for illustration are provided and sensitivity analysis on some parameters is made

a note on periodic review inventory models with stochastic supplier s visit intervals and fixed ordering cost most periodic review models in the inventory literature have assumed a fixed length of the review periods in this note we extend the work of chiang 2008 and consider backlogged and lost sales periodic review models where the review periods are of a variable length and there is a fixed cost of ordering for replenishment assuming that period lengths are independently and identically distributed we show using an exact method of computing inventory holding costs that an s s policy is optimal for the infinite horizon problem the periodic review policies developed are thus easy to implement the computation shows that if the fixed cost of ordering is small one needs to use the proposed periodic policies

an eoq model with partial backordering and advance payments for an evaporating item abstract in the classic economic order quantity model the purchasing cost of an order is paid at the time of its receipt in some cases retailers ask purchasers to pay all or a fraction of the purchasing cost in advance and may allow them to divide the prepayment into several equal sized parts in this paper an economic order quantity model for an evaporating item with partial backordering and partial consecutive prepayments is developed with a real case study of a gasoline station real numerical examples illustrate the proposed model and the solution method

economic purchasing strategies for temporary price discounts abstract the familiar model for determining the optimal stock replenishment strategy for a temporary price reduction is based on the simple eoq this paper extends the logic to a composite eoq model which can be decomposed into a family of hybrid models with broader operational flexibility the composite eoq provides malleability and flexibility to changing operational requirements by disaggregating complexity it approaches the resourcefulness of an expert system with its attendant economies

the permanent income hypothesis estimation and testing by instrumental variables the permanent income hypothesis with rational expectation is restated estimated and tested by an instrumental variables technique on the postwar u s aggregate time series data the hypothesis is accepted on a consumption series which includes service flows from consumer durables if the consumption series is the one in the national income and product accounts the hypothesis is decisively rejected an explanation is suggested to reconcile the conflicting test results

optimal ordering policies in response to a discount offer abstract sometimes supplier offers a temporary price discount to increase cash flow or decrease the inventory level of certain items thus the manufacturer may be able to improve the effectiveness of his inventory system by ordering a special quantity at this sale period in this paper economic order quantity eoq models with a discounted price are developed to obtain the optimal ordering policy during the sale period for five different cases a coincidence of sale period with replenishment time b non coincidence of sale period with replenishment time c sale period is longer than a cycle d discounted price as a function of the special ordering quantity and e incremental discount each case has its own characteristics of the sale period and the discounted price the objective is to take the maximum possible advantage from the discounted price by ordering a special quantity during the sale period the optimal ordering policy is obtained by maximizing the difference between the two costs regular eoq cost and special quantity cost during the sale period moreover a comparison of different discount scenarios is developed to sense the effect of different parameters on the ordering policies the annual gain obtained is linearly related to the discount and the on hand remnant inventory numerical analyses are provided to illustrate and testify the values of the optimal special quantity the analysis showed an impressive improvement in the effectiveness of the inventory system when a special order is placed during the sale period the optimal special quantity is driven for each case to visualize real life problems sensitivity analysis is also initiated to study the change in the total savings with respect to the variation of the special optimal quantity

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

an economic order quantity model with a known price increase and partial backordering abstract a constant unit purchase cost is one of the main assumptions in the classic economic order quantity model in practice suppliers sometimes face a known price increase in this paper we develop eoq models with a known price increase and partial backordering under two different assumptions about when the increase will occur we prove the concavity of the extra profit functions for both scenarios if a special order is placed just before the price increases a solution method is proposed and numerical examples are presented

discount pricing decisions in distribution channels with price sensitive demand abstract in this paper we evaluate the effectiveness of quantity discounts and volume discounts as coordination mechanisms in distribution channels with demand that is price sensitive we consider a single vendor single retailer distribution channel demand for the product arises only at the retailer the demand faced by the retailer is assumed to be deterministic but price elastic the retailer in turn buys the product from the vendor the vendor and the retailer act independently and rationally each maximizing their own respective profit the equilibrium point that specifies the vendor s and buyer s inventory and pricing policy is determined by the solution to a stackelberg game we consider the cases when quantity discount and volume discount respectively are offered we develop methods to determine the optimal discount policy for these cases we then consider the case where both volume and quantity discounts are offered simultaneously and develop a method to determine the optimal simultaneous discount offer the relative performance of the alternative discount schemes is then evaluated through a numerical study the results of the study demonstrate that the effectiveness of volume discount as a coordination mechanism is higher when the sensitivity of demand to price changes is higher the effectiveness of quantity discount on the other hand is higher with lower price sensitivity of demand finally the results also demonstrate that perfect coordination is achieved when volume and quantity discounts are offered simultaneously

optimal ordering strategies for announced price increases the familiar model for determining the optimal ordering strategy given an announced price increase assumes that the buyer has an opportunity to place an order at the end of the next economic order quantity cycle before the price increase takes effect this paper extends the price increase model by relaxing the requirement on the timing of the price increase specifically we develop optimal ordering strategies for situations where the price increase becomes effective at any future specified time we also calculate savings for alternate ordering strategies

an optimal policy for a single vendor single buyer integrated production inventory problem with process unreliability consideration abstract this article develops a model to determine an optimal integrated vendor buyer inventory policy for flawed items in a just in time manufacturing environment the objective is to minimize the total joint annual costs incurred by the vendor and the buyer the production process is assumed to deteriorate during processing and produces a certain number of defective items for practical purpose the article is concerned with the policy in which the delivery quantity to the buyer is identical at each replenishment the expected annual integrated total cost function is derived and a solution procedure is established to find out the optimal solution finally the solution technique is illustrated with a numerical example available in the literature

the role of affect in cross cultural negotiations this paper presents a model of cross cultural negotiations which describes how the affect negotiators experience during negotiations influences the character of the negotiation process and its outcomes three categories of determinants of negotiator affect are proposed individual differences cross cultural differences and contextual factors the ways in which negotiator affect influences information processing during negotiations are then described it is suggested that the influence of affect through substantive information processing may lead to either positive or negative spirals in negotiations influencing the ability of negotiators to reach an integrative solution finally the ways in which negotiators can break out of destructive negative spirals by engaging in motivated rather than substantive information processing are discussed

cultural differences in conducting intra and inter cultural negotiations a sino canadian comparison a study on conflict resolution strategies of canadian and chinese peoples republic of china executives was conducted responses to two types of joint project conflicts task related and person related with potential partners from their own culture or from the other culture were examined neither group of executives altered its strategy when negotiating across cultures chinese executives were more likely to avoid conflicts but recommended more negative strategies discontinue negotiation withdraw negotiation when conflict emerged person related conflicts were found to generate more negative responses than task related conflicts especially for chinese executives both canadian and chinese executives preferred to negotiate with canadians than with chinese

an optimal control of inventory under probablistic replenishment intervals and known price increase abstract the unit purchase price of products may increase or decrease for various reasons which influences the seller s and buyer s inventory control policies this paper develops an inventory control model when replenishment intervals are probabilistic and partial backordering in which an announced price increase happens and the buyer can make a special order before the price increase initiates inventory at the beginning of the period is not equal to zero and can be positive or negative amounts the main aim of this paper is to determine the optimum amount of replenish up to level in special sale offer this model is analyzed in two cases according to the inventory level in which the price increase happens and both cases are formulated to maximize the total saving function for placing a special order or not a closed form solution is obtained for the optimum amount of a special order two special cases with the replenishment intervals following uniform or exponential distributions are studied with sensitivity analysis the results indicate that a buyer can determine the optimal values of the maximum level of inventory and order quantity when the time between two consecutive replenishments is a probabilistic variable and the buyer experiences known price increase for which the total profit is maximized

a deterministic inventory model for deteriorating items with two warehouses and finite replenishment rate abstract a deterministic inventory model for deteriorating items with two warehouses is developed when the replenishment rate is finite demand is at a uniform rate and shortages are allowed it is assumed that the rates of deterioration of item in the two warehouses may be different the model is analysed for the case of continuous release pattern several special cases are discussed and a numerical example is provided to illustrate the variation in optimum inventory level and optimum cost for varying shortage cost

from the editors explaining theoretical relationships in international business research focusing on the arrows not the boxes distinctive features of articles accepted by the journal of international business studies are that they are multidisciplinary in scope and interdisciplinary in content and methodology and they make a substantial theoretical contribution to international business studies failure to meet this last requirement is an often cited reason given by reviewers for article rejection sometimes reviewers mean that a manuscript does not conform to the dominant paradigm in that it is not the next logical step in the study of a phenomenon or they mean that there is little if any integration of several theories used to explain a phenomenon however perhaps the most common underlying meaning when reviewers cite lack of a theoretical contribution for rejection is that the nature of the relationships proposed is not well explained while the first two meanings may be influenced by the specific discipline or methodology involved this final one is not in this editorial we provide a set of guidelines that authors can use to ensure that their paper meets the standard of explaining the logic of the relationships they propose

the market value and maturity structure of government of canada debt 1967 83 the market value and maturity structure of outstanding government of canada debt are calculated at monthly frequency for the 1967 to 1983 period the data are disaggregated into general public chartered bank and government holdings the time series behaviour of market value and par value measures are examined to determine whether par value is a reasonable approximation for market value market value data are also used to construct an alternative measure of the deficit flow which is compared with conventional measures of the deficit la valeur au marche et la structure d echeances de la dette du gouvernement du canada 1967 83 la valeur au marche et la structure d echeances de la dette du gouvernement du canada sont calculees par les auteurs pour chaque mois au cours de la periode de 1967 a 1983 on a ventile les resultats en portions detenues par le grand public par les banques a charte et par le gouvernement les auteurs examinent ensuite la chronique des mesures de valeurs au march6 et de valeurs au pair afin de determiner si la valeur au pair est une bonne approximation de la valeur au marche on se sert alors des donnees precisant la valeur au marche pour construire un indicateur de rechange du d6ficit qu on peut alors comparer aux mesures conventionnelles du deficit

two warehouse partial backlogging inventory models with three parameter weibull distribution deterioration under inflation abstract in many inventory systems the effects of deterioration of physical goods have drawn much attention of various researchers in recent years the more the deterioration is the more the order quantity would be according to such consideration taking the deterioration rate into account is necessary thus in this paper i develop the two warehouse partial backlogging inventory model introduced in yang 2006 to incorporate three parameter weibull deterioration distribution the objective is to derive the optimal replenishment policy that minimizes the net present value of total relevant cost per unit time two alternative models are compared based on the minimum cost approach the study shows that the optimal solution not only exists but also is unique model 2 is still less expensive to operate than model 1 in the proposed model finally some numerical examples and sensitivity analysis on parameters are made to validate the results of the proposed inventory system

a deteriorating inventory model with a temporary price discount abstract inventory models considering a temporary price discount have recently become an active area of research in this study an extension is made to consider the fact that some commodities may deteriorate during storage the models also incorporate three additional assumptions that have been neglected by researchers two models for the exponentially deteriorating items with a temporary price discount are developed for a regular and non regular inventory replenishment time our goal in this research is to maximize the total cost saving during the temporary price discount order cycle a numerical example is provided to illustrate the theory

two warehouse inventory models for deteriorating items with shortages under inflation abstract in this paper the two warehouse inventory problem for deteriorating items with constant demand rate and shortages under inflation is considered in contrast to the traditional deterministic two warehouse inventory model with shortages at the end of each replenishment cycle an alternative model in which each cycle begins with shortages and ends without shortages is proposed here the optimal solution not only exists but also is unique comparing these two two warehouse inventory models the study shows that the proposed model is less expensive to operate than the traditional one in the case of the inflation rate is greater than zero hence under the consideration of inflationary effect the proposed model is less expensive finally some numerical examples for illustration are provided

joint pricing and ordering policy for two echelon imperfect production inventory model with two cycles abstract this study deals with an imperfect epq economic production quantity price dependent inventory model over two types of cycles in the first cycle the retailer sells only good product with actual price and in the second he sells the products with a discount price in the production run time the non conforming items are produced at a random rate and they are reworked after the regular production run time and the reworked items are almost perfect as good as original quality items the retailer starts the second cycle when a certain percent of good items are left to him after the completion of regular production the retailer continues simultaneously two cycles up to which both types of the products are available to him now our objective is to find out optimal ordering lot size and optimal price for which the profit of the integrated model is maximum also we check the best strategy of retailer for the time of starting second cycle a numerical example is provided to illustrate the behavior and application of the model

euler equation tests of ricardian equivalence abstract tests of ricardian equivalence based on the euler condition can be written in several mathematically equivalent ways this paper shows that these alternative solutions may give rise to different empirical results when liquidity constraints are ignored this may be due to misspecification since a crucial assumption of the model is violated or due to the different parameter restrictions imposed by the different solutions the evidence suggests that misspecification is the most likely explanation previous evidence based on restricted specifications should be interpreted with caution

an inventory model with partial backordering and unit backorder cost linearly increasing with the waiting time as the implementation of jit practice becomes increasingly popular each echelon in a supply chain tends to carry fewer inventories and thus the whole supply chain is made more vulnerable to lost sales and or backorders the purpose of this paper is to recast the inventory model to be more relevant to current situations where the penalty cost for a shortage occurrence at a downstream stage in a supply chain is continually transmitted to the upstream stages the supplier in this case at the upstream of the supply chain is responsible for all the downstream shortages due to the chain reaction of its backlog the current paper proposes a model in which the backorder cost per unit time is a linearly increasing function of shortage time and it claims that the optimal policy for the supplier is setting the optimal shortage time per inventory cycle to minimize its total relevant cost in a jit environment

the behavior of treasury securities monthly 1942 1984 abstract the monthly market value statistics on outstanding united states treasury debt are reported for the 1981 1984 period in addition a monthly series on privately held gross federal debt is reported for the extended 1942 1984 period together with monthly security price indices for various federal debt aggregates examination of the stochastic structure of t bill prices indicates that the riskiness of t bills has increased dramatically in recent years

optimal lot size for a production inventory system with partial backlogging and mixture of dispatching policies abstract in this paper we study a production inventory model for a single product where shortages are partially backlogged both the backorder cost and the lost sale cost depend on a fixed cost and a cost proportional to the shortage time we assume a mixture between the dispatching policies known as lifo last in first out and fifo first in first out in the discipline of service to fill the backlogged demand by using a sequential optimization procedure we determine in a closed form the optimal production policies and the optimal profit for all the possible cases obtained from the developed model we show how this new model generalizes several inventory models proposed in the literature finally numerical results are presented to analyze the sensitivity of the optimal policies with respect to changes in some parameters of the system

assessing ricardian equivalence this paper reviews the literature on ricardian equivalence this hypothesis may be interpreted as a generalisation to the short and the long run of the theories which put no weight on the real effects of public policies on aggregate demand we argue that ricardian equivalence relies on both permanent income hypothesis and the fulfilment of the intertemporal government budget constraint the theoretical literature emphasises several reasons for departures from this hypothesis however the empirical literature is inconclusive when ricardian equivalence is tested in a life cycle framework the hypothesis is usually rejected while when the empirical analysis is based on optimising models it is usually accepted

excess sensitivity of consumption to current income liquidity constraints or myopia this paper asks whether the empirical rejection of the rational expectations permanent income hypothesis occurs because agents are myopic in the sense that the marginal propensity to consume out of transitory income is non zero or because some agents face liquidity constraints the finding that the estimate of the mpc out of transitory income is dramatically affected in both magnitude and statistical significance by the inclusion of a proxy for liquidity constraints suggests that liquidity constraints are an important part of the explanation of the observed excess sensitivity of consumption to current income la sensibilite excessive de la consommation au revenu courant contraintes sur la liquidite ou myopie ce memoire examine la question a savoir pourquoi l hypothese du revenu permanent avec anticipations rationnelles n est pas v6rifiee empiriquement est ce parce que les agents economiques sont myopes i e que leur propension marginale a consommer a partir de leur revenu transitoire n est pas nulle ou bien est ce que certains agents economiques font face a des contraintes sur leur liquidite le fait que l estimation de la propension marginale a consommer le revenue transitoire est affectee par l inclusion d une variable qui tente de capturer l importance des contraintes sur la liquidit6 tant dans l 6valuation de sa taille que dans sa signification statistique suggere que ces contraintes jouent un role important dans l explication de cette sensibilite excessive qu on observe de la consommation aux changements dans le niveau de revenu courant almost all the recent empirical tests of the rational expectations permanent income hypothesis re pih have rejected the hypothesis using a rich variety of data sets and estimation methods the empirical work indicates that the failure of the re pih is significant both statistically and quantitatively the null hypothesis in this empirical literature typically consists of the joint hypothesis that 1 agents expectations are formed rationally 2 desired consumption is determined by permanent income and 3 capital markets are perfect in the sense that agents can lend or borrow against 1 studies rejecting the re pih include blinder 1981 flavin 1981 hall and mishkin 1982 hayashi 1982 and sargent 1978 in his original paper hall 1978 did not reject the re pih decisively however flavin 1981 showed that with a minor alteration in the specification of the alternative hypothesis the re pih could be rejected using hall s test and data set bernanke 1981 studying panel data on automobile expenditures did not find evidence against the hypothesis for an extensive survey of the empirical literature on the rational expectations permanent income hypothesis see king 1983 canadian journal of economics revue canadienne d economique xviii no 1 february fevrier 1985 printed in canada imprime au canada 0008 4085 85 117 36 1 50 canadian economics association this content downloaded from 157 55 39 17 on wed 31 aug 2016 05 08 58 utc all use subject to http about jstor org terms

advance booking discount programs under retail competition we model a situation in which two retailers consider launching an advance booking discount abd program in this program customers are enticed to precommit their orders at a discount price prior to the regular selling season however these precommitted orders are filled during the selling season while the abd program enables the retailers to lock in a portion of the customer demand and use this demand information to develop more accurate forecasts and supply plans the abd price reduces profit margin we analyze the four possible scenarios wherein each of the two firms offer an abd program or not and establish conditions under which the unique equilibrium calls for launching the abd program at both retailers

replenish up to inventory control policy with random replenishment intervals abstract the multi period inventory problems have been studied under two main assumptions continuous review assumption where an order can be made at any time depending on inventory position and periodic review assumption where an order can be initiated only at discrete time epochs in this study we analyze a multi period inventory problem that falls under neither of these two assumptions in the case we consider there are periodic replenishments but the replenishment intervals are taken to be i i d random variables this setting represents the real life cases where a supplier visits a retailer with random inter arrival times and the retailer replenishes his inventories based on a replenish up to level inventory control policy we also assume that only a certain fraction of unmet demand is backordered and the rest of it is lost in this setting under general distribution between replenishment epochs we show the concavity of the expected profit function and give the condition that must hold for the optimal replenish up to level we also present the specific solutions and analysis under two different distributions namely uniform and exponential distributions together with some numerical examples

debt neutrality theory and evidence from developing countries this paper reviews the ricardian barro hypothesis and tests the basic postulate of the model for a sample of developing countries including mexico and venezuela two specifications are utilized the first is based on the simple consumption model associated with the work of kormendi 1983 the alternative is based on a model developed by haque and montiel 1987 the outcome of the two stage least square estimation technique rejected the hypothesis in mexico trinidad and tobago and venezuela all countries which underwent adjustment programmes however these results were reversed when the alternative model was utilized due to liquidity constraint and possibly the yaari blanchard effect the contradictory outcome alludes to the sensitivity of the results to the model specified

a deterministic order level inventory model for deteriorating items with two storage facilities abstract sarma 3 developed an inventory model for a single deteriorating item which is stored in two different warehouses an owned warehouse ow and a rented warehouse rw the rented warehouse is used for storing the excess units over the fixed capacity w of the ow and is assumed to offer better preserving facilities than the ow resulting in a lower rate of deterioration also the rw is assumed to charge higher holding cost than the ow in his paper sarma obtained an optimal replenishment schedule when the demand rate is constant over a fixed cycle length where the ow has to stock a specified known quantity in this paper we relax the assumptions of fixed cycle length and known quantity to be stocked in the ow further we find the optimal schedule that minimizes the total cost per unit time in a cycle for an arbitrary demand rate function where cycles are assumed to form a regenerative process we also present numerical examples

an inventory control model with stochastic review interval and special sale offer abstract periodic review inventory models are widely used in practice especially for inventory systems in which many different items are purchased from the same supplier however most of periodic review models have assumed a fixed length of the review periods in practice it is possible that the review periods are of a random stochastic length this paper presents an inventory control model in the case of random review intervals and special sale offer from the supplier the replenishment interval is assumed to obey from two different distributions namely exponential and uniform distributions also shortages are allowed in the term of partial backordering for this model its convexity condition is discussed and closed form solutions are proposed

note on an eoq model with a temporary sale price a flaw is revealed in the formulation of a fundamental temporary sale price model however its impact is only relatively significant when the amount of the discount is small

an eoq model for perishable product with special sale and shortage abstract in this paper for the first time an inventory control model to determine the optimal order and shortage quantities of a perishable item when the supplier offers a special sale is developed four possible cases based on decision that the purchaser might make about the first replenishment policy using regular economic order quantity model at reduced price or regular price if he did not take the special order and coincidence of special period length with positive or negative inventory level of the last regular period length during the special period are investigated moreover several useful theorems are suggested through which one can find closed form solution directly when there are integer operators involved in an objective function at the end in order to illustrate the proposed theorems and the solution method some numerical examples are solved and a sensitivity analysis is reported too

sensitivity of consumption to income and to government purchases some specification and estimation issues the paper derives a nonlinear error correction model ecm for consumption and shows that existing models that are based on quadratic utility combine permanent income and current income consumption and nest or could nest the hypothesis of substitutability between private consumption and government purchases are special cases of the ecm the importance of some econometric issues that have not received proper attention in the literature is demonstrated by estimating the models using us aggregate quarterly data 1953 1 1992 4 the evidence suggests that the ecm produces more reliable estimates than do the existing restrictive models

ordering and inventory policies for step changes in the unit item cost a discounted cash flow approach this paper considers the problem of determining the optimal ordering quantities of a purchased item where there are step changes in price either up or down other costs incurred include ordering costs associated with each replenishment and holding costs related to capital tied up in inventory and physical stock holding the net present value npv principle is applied explicit expressions for the development of the optimal order quantities over time are presented it is shown that three cases may be distinguished i when the price change is very small ii when an essential price increase occurs and iii when there is an essential price decrease although the optimal last order quantity before a price increase is similar in magnitude to what has been presented in other articles applying average cost approaches in certain respects this paper offers novel results contradictory to those suggested by other authors analysis shows that the average cost model solutions are first order approximations in the discount rate numerical evaluations of a range of price increases and times to the price increase suggest that with certain important caveats the average cost formulae are likely to be acceptable for most practical situations for the infinite horizon situation

economic replenishment strategies for announced price increases abstract the usual model for determining the optimal replenishment lot size for an announced price increase is the basic eoq model this analysis extends the logic to a composite lot sizing model that can be disaggregated into a family of hybrid models with additional operational flexibility the composite model permits broader diversity and the ability to decompose complexity it provides decision support resourcefulness with its resultant economies

managing inventory with multiple products lags in delivery resource constraints and lost sales a mathematical programming approach this paper develops an order up tos inventory model that is designed to handle multiple items resource constraints lags in delivery and lost sales without sacrificing computational simplicity mild conditions are shown to ensure that the expected average holding cost and the expected average shortage cost are separable convex functions of the order up to levels we develop nonparametric estimates of these costs and use them in conjunction with linear programming to produce what is termed the lp policy the lp policy has two major advantages over traditional methods first it can be computed in complex environments such as the one described above and second it does not require an explicit functional form of demand something that is difficult to specify accurately in practice in two numerical experiments designed so that optimal policies could be computed the lp policy fared well differing from the optimal profit by an average of 2 20 and 1 84 respectively these results compare quite favorably with the errors incurred in traditional methods when a correctly specified distribution uses estimated parameters our findings support the effectiveness of this mathematical programming technique for approximating complex real world inventory control problems

a survey of deterministic models for the eoq and epq with partial backordering models for the basic deterministic eoq or epq problem with partial backordering or backlogging make all the assumptions of the classic eoq or epq model with full backordering except that only a fraction of the demand during the stockout period is backordered in this survey we review deterministic models that have been developed over the past 40 years that address the basic models and extensions that add other considerations such as pricing perishable or deteriorating inventory time varying or stock dependent demand quantity discounts or multiple warehouses

an economic order quantity model with partial backordering and a special sale price abstract a constant unit purchase cost is one of the main assumptions in the classic economic order quantity model in practice suppliers sometimes offer special sale prices to stimulate sales or decrease inventories of certain items in this paper we develop an eoq model with a special sale price and partial backordering we prove the convexity of the cost reduction function if a special order is placed at the special sale price a solution method is proposed and numerical examples are presented

a note on the optimal eoq for announced price increases in the infinite horizon huang et al 2003 used the cesaro limit of a savings function to determine the optimal special order in an eoq model with single announced price increases over an infinite horizon in this note we point out that the savings function is not cesaro summable more importantly no limiting argument for the cost function d t qs as t is necessary at all given that this function is periodic for which it suffices to optimize the integral of the function over any given period

tension and trust in international business negotiations american executives negotiating with chinese executives the purpose of the study is to shed light on the antecedents and consequences of tension felt during international business negotiations a total of 176 american and chinese executives participated in simulated international business buyer seller negotiations the negotiations were videotaped and the participants completed questionnaires each participant was also asked to review his her videotaped negotiation rate the tension felt on a videotape review form and briefly describe the antecedents of the tension felt the data collected were then analyzed using first a structural equations approach and then a more exploratory content analysis both chinese and american executives felt tension during the negotiations for the chinese greater levels of tension led to an increased likelihood of agreement but also led to lower levels of interpersonal attraction and in turn lower trust for their american counterparts for the americans tension felt decreased marginally the likelihood of an agreement did not affect interpersonal attraction but did have a direct negative effect on trust a series of other cultural differences are also reported the measure of tension felt developed in the study appears to be useful methodologically theoretically and practically

computing the non stationary replenishment cycle inventory policy under stochastic supplier lead times in this paper we address the general multi period production inventory problem with non stationary stochastic demand and supplier lead time under service level constraints a replenishment cycle policy r n s n is modeled where r n is the n th replenishment cycle length and s n is the respective order up to level we propose a stochastic constraint programming approach for computing the optimal policy parameters in order to do so a dedicated global chance constraint and the respective filtering algorithm that enforce the required service level are presented our numerical examples show that a stochastic supplier lead time significantly affects the structure of the optimal policy with respect to the case in which the lead time is assumed to be deterministic or absent

optimal ordering for a probabilistic one time discount abstract we develop a model for a one time special purchasing opportunity where there is uncertainty with respect to the materialization of the discounted purchasing offer our model captures the phenomenon of an anticipated future event that may or may not lead to a discounted offer we analyze the model and show that the optimal solution results from a tradeoff between preparing for the special offer and staying with the regular ordering policy we quantify the tradeoff and find that the optimal solution is one of four intuitive policies we present numerical illustrations that provide additional insights on the relationship between the different ordering policies

optimizing inventory s contribution to profitability in a regulated utility the averch johnson effect the averch johnson effect is a well known economic phenomenon through which regulated utility companies prefer a capital resource input combination that differs from an efficient level through dynamic network data envelopment analysis ndea this paper first investigates the existence of this effect on a dynamic input that is inventory the analysis was performed for a group of public electric utilities from 2005 to 2014 the result implies that these firms procure a significant extra amount in inventory materials and supplies beyond their efficient levels in order to explore the connection of this effect to profit motives we construct an analytical model of the inventory policy controlling the extra buying of material and supplies that will be inventoried and added to the firm s rate base the model is based on maximizing the net present value of total profits in the deterministic case two results are observed i the firm could achieve a finite optimum by adding a finite amount of inventory above the normal base level which assumes no impact of inventory on the rate hearing and ii the firm could theoretically achieve infinite optimum under the unconstrained model the primary contribution of this paper is the special case of extending typical inventory replenishment models to including the impact on prices and in turn profits in a regulated supply chain

replenishment and stocking policies for inventory systems with random deal offerings this paper considers the replenishment and stocking decision for inventory systems in which price discounts referred to as deals are offered by the supplier or the market place at random points in time assuming that the demand is constant over time the times between deal offerings are exponentially distributed and that the order leadtimes are negligible we derive expressions for evaluating the operating characteristics of the model moreover we derive expressions for determining the optimal policy parameters for such systems and present results on the behavior of the optimal policy parameters our results are easy to implement intuitive and provide managerial insights and a better understanding on the effect of random deal offerings on replenishment and stocking decisions in addition we suggest a back of envelope heuristic solution for deriving the policy parameters

a deterministic order level inventory model for deteriorating items with two storage facilities abstract in this paper a deterministic inventory model is developed for a single deteriorating item which is stored in two different warehouses a rented warehouse is used to store the excess units over the fixed capacity w of the own warehouse the rented warehouse is assumed to charge higher unit holding cost than the own warehouse but to offer a better preserving facility resulting in a lower rate of deterioration for the goods than the own warehouse the optimal stock level for the beginning of the period is found and the model developed is shown to agree with the order level model for non deteriorating items with a single storage facility an illustration to show the applicability of the model is also presented

deterministic eoq with partial backordering and correlated demand caused by cross selling abstract there has been much work regarding the deterministic eoq with partial backordering the majority of these studies assume no correlation in sales so independent demands across items is applied in the models however it is generally recognized that cross selling effects between items often appear in real contexts thus incorporating such effects in the inventory model in the form of correlated demands makes it of more practical relevance in this paper the authors address a two item inventory system where the demand of a minor item is correlated to that of a major item because of cross selling we firstly present a two item eoq model with identical order cycles where the unmet demand of the major item can be partially backordered with lost sales whereas the demand of the minor item must be met without stockouts this model is further extended to fit a more practical case where the order cycle of the major item is an integer multiple of that of the minor item the optimal solutions of the two models as well as the inventory decision procedures are also developed comparative analysis on these two eoq models has been drawn in the computational study which presents some insights into the parameter effect on the optimal inventory policy

the deterministic eoq with partial backordering a new approach previous authors have shown that if demand that cannot be filled from stock is partially backordered then using the full backordering model or assuming that all stockouts will result in lost sales can lead to substantial increases in cost relative to using a model that specifically recognizes the percentage of the stockouts that will be backordered the models that these authors developed resulted in procedures or equations that are relatively difficult to use in this paper we take a different approach to modeling the deterministic eoq with partial backordering that results in equations that are more like the comparable equations for the basic eoq and its full backordering extension

raw material procurement with fluctuating prices abstract increasing global competition and cost pressure force enterprises and supply chains to discover undetected cost saving potentials in particular interfaces to the raw materials market are a promising field for improvement this paper presents a deterministic optimal control approach optimizing the procurement and inventory policy of an enterprise that is processing a raw material when the purchasing price holding cost and the demand rate fluctuate over time applying pontryagin s maximum principle the optimal policy turns out to be of a bang bang type involving impulse and just in time procurement numerical examples illustrate the solutions obtained and compare the optimal policy with simple replenishment strategies

an allocation and distribution model for perishable products this paper presents an allocation model for a perishable product distributed from a regional center to a given set of locations with random demands we consider the combined problem of allocating the available inventory at the center while deciding how these deliveries should be performed two types of delivery patterns are analyzed the first pattern assumes that all demand points receive individual deliveries the second pattern subsumes the frequently occurring case in which deliveries are combined in multistop routes traveled by a fleet of vehicles computational experience is reported

consumers are not ricardian evidence from nineteen countries i introduction in conventional macroeconomic analysis government debt affects the economy because households view it as net wealth the larger the government debt is the wealthier households feel and the more they consume in principle however households need not view government debt as net wealth david ricardo pointed out that they might conceivably treat the future taxes servicing the government debt as exactly offsetting it 1 robert barro 1974 has shown that maximizing households will actually do so if they accurately anticipate future taxes if they face perfect capital markets and if they have effectively infinite horizons ricardian equivalence is said to hold if households do treat future servicing taxes as an exact offset to the government debt many empirical papers on consumption have investigated whether ricardian equivalence is consistent with observation kochin 1974 barro 1978 tanner 1979 seater 1982 kormendi 1983 aschauer 1985 seater and mariano 1985 kormendi and meguire 1986 1990 leiderman and razin 1988 evans 1988 and evans and hasan 1993 have reported evidence consistent with ricardian equivalence by contrast blinder and deaton 1985 feldstein 1978 1982 boskin and kotlikoff 1985 modigliani and sterling 1986 1990 and feldstein and elmendorf 1990 have reported evidence inconsistent with ricardian equivalence unfortunately most of these studies do not estimate regression equations that derive from well specified theoretical models nesting both ricardian equivalence and an alternative theory in which budget deficits and current taxes are not equivalent consequently their results are often hard to interpret moreover these studies consider the data for only one country typically the united states as a result the tests that are performed may not have much power to distinguish an economy for which ricardian equivalence would be a good approximation from one for which it would be a bad approximation olivier blanchard 1985 has provided one of the few models in the literature that tractably nests ricardian equivalence and an alternative in which households view government debt as net wealth depending upon whether a crucial parameter is zero or positive households have infinite horizons internalize all future generations and exhibit ricardian behavior or have finite horizons are at least somewhat disconnected from future generations and exhibit non ricardian behavior that strengthens as the parameter becomes larger the model has testable implications that this paper examines using annual data for nineteen countries when the data for the countries are pooled the tests have sufficient power not only to reject ricardian equivalence in favor of blanchard s alternative but also to yield a precise estimate of the deviation from ricardian equivalence this estimated deviation is approximately what one would expect if capital and insurance markets were perfect and households did not have altruistic bequest motives the deviation is however also economically unimportant for many purposes the rest of the paper is organized as follows section ii lays out blanchard s model and derives the testable implications of ricardian equivalence section iii tests these implications section iv summarizes the findings of the paper and interprets them ii empirical implications of ricardian equivalence in the stochastic variant of blanchard s model formulated in this section the economy is inhabited by a constant population of households that have finite horizons and face perfect capital and insurance markets 2 each household has a finite horizon because it has a probability p of dying each period and being replaced by another household from which it is entirely disconnected with the population normalized to unity the number of households born 0 1 2 periods earlier is always p p 1 p p 1 p sup

one time only incentives and inventory policies abstract this paper presents a review of the literature available on inventory policies under incentives on a one time only basis it is quite a common industrial practice to offer special incentives to motivate the buyer to order in larger than regular order quantities such special deals are available for a limited time only the literature on inventory policies under conditions of incentives has been classified by the nature of incentives such as price discount and credit period a situation of announced price increase which is very similar to price discount is also reviewed the policy implications of various scenarios are highlighted and areas of future research are identified

government debt government spending and private sector behavior a current period tax reduction financed by issuing government debt shifts the timing of tax collection from the current period to the future if the future taxes implied by government debt are not fully perceived and discounted by the private sector there will be a net wealth effect that increases private sector consumption thus reducing capital accumulation and growth if on the other hand the implied future taxes are perceived and discounted by the private sector the current period tax reduction will be used to increase private saving to pay for the future taxes and government debt will be absorbed without any real effects on the economy the effects of government spending financed by current period taxation also depend upon private sector perceptions 2 if the benefits of government spending are ignored private sector consumption will decrease in accordance with the reduction in permanent disposable income to the extent that government spending is on consumption type goods that are perceived as substitutes for privately provided consumption goods there will be a relatively greater reduction in private sector consumption to the extent that government spending is on investment type goods yielding future goods and services that are perceived as substitutes for future privately provided consumption goods there will be a relatively smaller reduction in private sector consumption the standard approach to modeling private sector consumption saving behavior involves a rather asymmetric set of assumptions as to how the private sector perceives the various elements of government fiscal policy 3 current period taxes are assumed to be fully perceived but current period government spending is implicitly assumed to be completely ignored by the private sector in considering permanent personal disposable income the private sector is assumed to be forward looking in its assessment of income and taxation the stock of government debt is nevertheless included as part of the stock of private wealth the implicit assumption associate professor of economics graduate school of business university of chicago 1101 east 58th street chicago il 60637 i thank eugene fama levis kochin michael mussa paul evans and an anonymous referee for helpful comments i am particularly grateful to daniel benjamin for contributing many hours of discussion and laura lahaye who was a research assistant and valuable adviser on earlier drafts the theoretical debate on the burden of the debt has been long standing gerald o driscoll 1977 documents ricardo s nineteenth century position robert barro 1974 reopened the debate by introducing the fundamental issue of intergenerational transfers also discussed in merton miller and charles upton 1974 the empirical side of the debate was initiated by levis kochin s 1974 attempt to test for the effects of deficits on consumption and by martin feldstein s 1974 attempt to test for the effects of social security wealth on consumption other empirical contributions include jess yawitz and laurence meyer 1976 myself 1978 and j earnest tanner 1978 1979 with respect to the effects of government deficits and debt and barro 1978 michael darby 1979 and dean leimer and selig lesnoy 1982 with respect to social security wealth see also interesting recent papers by john seater 1982 who generates detailed tests of the effects of deficits and debt on consumption charles plosser 1982 who explores the effects of government spending and debt shocks on interest rates and feldstein 1982 who attempts tests similar to some in this paper see fn 29 2martin bailey s 1962 1971 development of the effects of government spending on private consumption and aggregate economic activity is the seminal contribution paul david and john scadding 1974 extend bailey s ideas and provide some supporting empirical evidence more recently willem buiter 1977 and myself 1978 developed models based on bailey s earlier work barro 1981 has an interesting paper on related issues see also david aschauer 1982 3the standard approach incorporates fiscal policy through the concept of personal disposable income and by including the stock of government debt as part of personal wealth see for example the empirical specification of albert ando and franco modigliani 1963 which has been the basis of most empirical consumption studies since and feldstein 1974 for one of the more influential papers based on the ando modigliani specification

are consumers ricardian when some are liquidity constrained evidence for the united states this paper formulates and estimates a revised specification of evans 1988 test for ricardian equivalence which incorporates the possible presence of liquidity constrained consumers if liquidity constrained consumers are significant in number tests using aggregate consumption data may tend to reject the ricardian equivalence hypothesis when the model allows for liquidity constraints a test which incorporated liquidity constrained consumers could not reject ricardian equivalence over the sample period 1946 91 while the proportion of aggregate consumption which is liquidity constrained is found to be significant it does not appear large enough to affect the test for ricardian equivalence

planning for shortages net present value analysis for a deteriorating item with partial backlogging abstract this paper develops inventory models to help answer strategic questions concerning whether planning for shortages offers financial benefits a production inventory system producing a deteriorating product in batches at a finite production rate with partial backordering is considered customers pay a deposit when placing a backorder backordered items receive a discount on the sales price as lost sales may lead to customers not returning the demand rate may depend on the fraction of lost sales we develop a cash flow based profit maximising net present value npv model without the inventory cost parameters commonly used in this context unit holding cost unit backorder cost unit deterioration cost and unit lost sales cost the model finds the optimal inventory policy just like npv models that discount the traditional parameters but has the advantage of not needing to estimate the value of the traditional parameters it is shown that in models based on discounting the traditional parameters the parameters are not exogenously determinable but are non trivial functions of non financial endogenous system parameters such as the production rate annual demand rate and backorder rate extensive numerical experiments illustrate how cash flow npv models provide insights into the value of planning for shortages and strategic choices about the design of the production inventory system it also provides insight into the classical problem of how to interpret unit backorder cost and unit lost sales cost the study indicates that these insights cannot be reliably obtained from npv models based on discounting unit backorder costs and unit lost sales costs

liquidity constraints and the ricardian equivalence theorem in fumio hayashi s 1987 model of consumption under imperfect capital markets the ricardian equivalence theorem holds this paper shows that hayashi s result depends on the creditor receiving a positive partial payment when the debtor chooses to default the specification of a positive partial payment to the creditor when the debtor defaults is inconsistent with evidence on personal bankruptcies under the more empirically plausible specification that the creditor may receive nothing if the debtor defaults the analysis shows the ricardian equivalence theorem does not hold copyright 1989 by ohio state university press

optimal ordering policies in response to a discount offer corrections abstract recently sarker and kindi 2006a optimal ordering policies in response to a discount offer international journal of production economics 100 2 195 211 presented an inventory model from the purchaser s perspective to determine the optimal ordering policies in response to a discount offer established by the supplier for five possible cases this study presents some practical extensions to the optimal ordering policies developed by sarker and kindi 2006a optimal ordering policies in response to a discount offer international journal of production economics 100 2 195 211

are consumers ricardian evidence for the united states this paper derives three empirical implications of a well specified model of consumer behavior a model that nests both ricardian equivalence and an alternative non ricardian theory ricardian equivalence is then tested against this alternative the tests reveal that ricardian equivalence cannot be rejected

three echelon supply chain coordination considering duopolistic retailers with perfect quality products abstract this paper explores channel coordination and profit division issues of a manufacturer distributer duopolistic retailers supply chain for a product where the manufacturer supplies lotsize of the product that contains a random portion of imperfect quality item in manufacturer stackelberg vertical game setting the duopolistic retailers three behaviours cournot collusion and stackelberg are discussed besides analyzing the effect of imperfect quality product on optimal decisions the paper depicts the hybrid contract mechanism so that all units quantity discount with franchise fee resolves channel conflict though unable to provide win win outcome for surplus profit division the paper proposes two sequential bargaining processes backward and forward where outcome of a nash bargaining is dependent on the previous it is found that for channel coordinated win win profit the manufacturer prefers collusion stackelberg and cournot while the retailer prefers the reverse and both prefer backward sequential bargaining but the distributers preference depends on the target profit that it sets during the bargaining process the proposed mechanisms are illustrated by a numerical example

optimal pricing and lot sizing under conditions of perishability and partial backordering we formulate a generalized model of dynamic pricing and lot sizing by a reseller who sells a perishable good we assume that when it is economic to backlog demand the reseller can plan for periods of shortage during which demand can be partially backordered when the good is highly perishable the reseller may need to backlog demand in order to market the good at a reasonable price we present a simple solution procedure for solving the optimization problem the procedure entails solving first a single nonlinear equation and then if required two nonlinear equations

inventory management with random supply and imperfect information a hidden markov model in most of the papers on inventory models operating in a random environment the state of the environment in each period is assumed to be fully observed with perfect information however this assumption is not realistic in most real life situations and we provide a remedy in this paper by assuming that the environment is only partially observed with imperfect information we accomplish this by analyzing two formulations of single item models with periodic review and random supply in a random environment in the first one supply is random due to random capacity of production and random availability of transportation we show that state dependent base stock policy is optimal if the capacity and all costs are observed while demand and availability are unobserved in the second model we consider a model with random availability only with fixed ordering cost we show that state dependent s s policy is optimal if the availability process is observable