an unintended consequence of book tax conformity a loss of earnings informativeness increasing the conformity between accounting earnings and taxable income has been proposed to improve financial reporting and curtail aggressive tax planning we find however that increasing conformity results in earnings that are less informative our inquiry exploits a unique sample of firms forced to change from the cash method to the accrual method for tax purposes thereby increasing their book tax conformity we find that these firms experienced a decrease in earnings informativeness compared to control firms unaffected by the change to our knowledge this is the first evidence of tax law changes affecting the informativeness of accounting earnings

production economics and process quality a taguchi perspective abstract although several studies have analyzed the interaction between the economics of production and process quality most of them view quality from a very traditional perspective reject when outside specified limits or else accept recent views on quality have shown that such a definition greatly underestimates the costs of poor quality and leads to sub optimal decisions the primary intent in this paper is to revisit this interaction of the economics of production with process quality from a non traditional yet more realistic taguchi quality cost perspective specifically we investigate the possibility of investing in a process to decrease its variance although such an investment reduces the proportion of defects and when large enough the taguchi s loss it also increases the cost of holding inventory our model determines the optimal levels of inventory and the production lot size that minimizes the sum of inventory and quality related costs

energy efficiency and productivity change of china s iron and steel industry accounting for undesirable outputs abstract this paper used data from 50 enterprises in china s iron and steel industry to evaluate their energy efficiency and productivity change the study first used a conventional data envelopment analysis model and the malmquist productivity index mpi to measure the energy efficiency and productivity change over the period 2001 2008 the results indicated inefficiency in many of the plants the average energy efficiency was only 61 1 the annual growth rate of productivity was 7 96 over this period and technical change was the main contributor to this growth the research then took undesirable outputs into consideration by using the malmquist luenberger productivity index mlpi to explore the productivity change from 2006 to 2008 omitting undesirable outputs would result in biased efficiency change and technical change this paper also claimed that environmental regulation has a potentially positive impact on technical change

the impact of multiple stocking points on system profitability in this paper we examine the impact of multiple stocking points on system profitability by examining the increased profit needed to offset cost increases due to cycle inventory safety stock and order placement we utilize the economic order quantity model to analytically evaluate this relationship a table based on the analytical result is presented at the end of the paper that quickly illustrates this relationship

optimal investment in setup reduction in manufacturing systems with wip inventories abstract a number of models have been proposed to predict optimal setup times or optimal investment in setup reduction in manufacturing cells these have been based on the economic order quantity eoq or economic production quantity epq model formulation and have a common limitation in that they neglect work in process wip inventories which can be substantial in manufacturing systems in this paper a new model is developed that predicts optimal production batch sizes and investments in setup reduction this model is based on queuing theory which permits it to estimate wip levels as a function of the decisions variables batch size and setup time optimal values for batch size and setup time are found analytically even though the total cost model was shown to be strictly non convex

optimal inventory policies for an economic order quantity model with decreasing cost functions in this paper three total cost minimization eoq based inventory problems are modeled and analyzed using geometric programming gp techniques through gp optimal solutions for these models are found and sensitivity analysis is performed to investigate the effects of percentage changes in the primal objective function coefficients the effects on the changes in the optimal order quantity and total cost when different parameters of the problems are changed is also investigated in addition a comparative analysis between the total cost minimization models and the basic eoq model is conducted by investigating the error in the optimal order quantity and total cost of these models several interesting economic implications and managerial insights can be observed

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

optimal inventory policies for profit maximizing eoq models under various cost functions in this paper we establish and analyze three eoq based inventory models under profit maximization via geometric programming gp techniques through gp we find optimal order quantity and price for each of these models considering production lot sizing as well as marketing pricing decisions we also investigate the effects on the changes in the optimal solutions when different parameters are changed in addition a comparative analysis between the profit maximization models is conducted by investigating the error in the optimal price order quantity and profit of these models several interesting economic implications and insights can be observed

managing real time demand fluctuation under a supplier retailer coordinated system abstract we have considered a supplier retailer system that operates under an agreed coordinated policy with an imperfect production process and a possibility of having demand fluctuation in this paper a dynamic planning process is proposed to deal with short term demand fluctuations to do this a mathematical model was first developed for a single fluctuation either for increasing or decreasing demand rate the model generates a revised plan after the occurrence of the fluctuation event we also propose a new and efficient heuristic to solve the developed model secondly multiple fluctuations have been considered for which a new occurrence may or may not affect the revised plan of earlier occurrences and we extend the heuristic so that is capable of dealing with multiple demand fluctuations on a real time basis we have generated a good number of random test problems and also solved the model using a genetic algorithm in order to compare the solutions with our heuristic the comparison confirmed the consistent performance of our developed heuristic and also its lower computational time numerical examples and sensitivity analysis have been presented to explain the usefulness of the developed model

parametric analysis of setup cost in the economic lot sizing model without speculative motives in this paper we consider the important special case of the economic lot sizing problem in which there are no speculative motives to hold inventory we analyze the effects of varying all setup costs by the same amount this is equivalent to studying the set of optimal production periods when the number of such periods changes we show that this optimal set changes in a very structured way this fact is interesting in itself and can be used to develop faster algorithms for such problems as the computation of the stability region and the determination of all efficient solutions of a lot sizing problem furthermore we generalize two related convexity results which have appeared in the literature

measuring sectoral productivity across time and across countries abstract this paper examines the problem of measuring the evolution of productivity changes over time and across the 14 countries included in the oecd s international sectoral data base of two sectors considered essential to the economic growth of any nation namely manufacturing and services the basic units of analysis are generalized malmquist productivity indices these in turn can be decomposed into several components associated to the various sources of productivity change included here are productivity fluctuations due to economies of scale being constant or variable to technical change and technical efficiency change the computational procedure is based upon the concept of distance function computed through the use of variations of data envelopment analysis

technical efficiency and productivity change of china s iron and steel industry abstract the recent economic reform of china s iron and steel industry has resulted in its rapid expansion to become the largest in the world however the resultant increase in the use of energy and other resources has resulted in severe environmental degradation to further increase output while reducing emissions and waste will require increased productivity in this paper the technical efficiency and malmquist productivity indexes of a sample of 88 enterprises producing 72 percent of the industry s output were determined for the period 1989 1997 with the aim of gaining some insights into the policy options likely to achieve this

investments in modern production technology and the cash flow oriented epq model in this study we analyze investments in setup and production processes in the context of the traditional inventory problem the comparison of the results of a cash flow and a cost oriented model suggests the use of the net present value as a decision criterion the analysis shows that an additional investment which reduces setup cost decreases the optimal capital investment necessary to reduce production cost and vice versa an investment which increases the production rate however may increase or decrease the capital expenditure of an investment in the setup process

from eoq towards zi zero inventory zi is a new and powerful concept to improve production efficiency underpinning zi is set up reduction and this paper examines what eventuates when set up costs are cut the folklore is that set up reduction lowers inventory and costs we obtain results contrary to that reducing set up costs need not reduce inventory for example likewise lowering set up costs need not necessarily lower total production and inventory costs furthermore most investments produce marginally decreasing returns set up cost reduction prompts the opposite it produces marginally increasing not decreasing returns a parametric algorithm that calculates the benefit of set up cost reduction is provided most presentations of zi have been descriptive with very few mathematical models of it yet untaken by modeling certain zi concepts mathematically we scrutinize their validity and sometimes invalidity

frontier production functions and technical efficiency measures the concept of technical efficiency is central to measuring the firm performance the measurement of technical efficiency has proved difficult and complex and the literature provides a range of methodologies this paper reviews the various methodologies for measuring technical efficiency and offers a comparison between established methods of measurements the discussion is literary with less mathematical jargons and equations the objective of this paper is not to be exhaustive but to be up to date and to provide a significant discussion on some of the core methods of measuring technical efficiency

university library benchmarking an international comparison using dea abstract this paper proposes a framework for assessing the technical efficiency of 118 university libraries from australia austria canada germany switzerland and the united states the flexible non parametric approach of data envelopment analysis has been chosen to analyse the performance differentials of university libraries we also investigate whether the institutional settings affect the degree of library efficiency the findings of the intercountry efficiency comparison revealed that almost one third of the university libraries are technically efficient using environment specific frontiers to distinguish differences in managerial efficiency from differences in environmental efficiency we found considerable differences in technical efficiency between european and non european university libraries however as regards the environmental setting the non european best practice frontier outperforms the european best practice frontier

corporate earnings facts and fiction investors cone dence in the quality and integrity of corporate e nancial reports has been seriously shaken of late the ever increasing procession of headlines about fraudulent earnings ine ated asset values and understated liabilities reported by erstwhile leading companies the likes of enron tyco worldcom xerox and a host of lesser household names all audited by major accounting e rms suggests systematic dee ciencies in the accounting standards and governance systems that generate e nancial information of public companies not to mention in the regulatory systems overseeing them both aggregate data and cross sectional research cone rm the anecdotal evidence that the correspondence to reality of reported earnings deteriorated throughout the 1990s for example the gap between aggregate earnings and taxable corporate income which abstracts according to internal revenue service rules from most estimates and provisions often used to manipulate earnings has been continuously widening throughout the 1990s desai 2002 also increasing during the 1990s was the gap between earnings and the corporate proe ts reported in the national income and product accounts which are based on e rms taxable income adjusted for current values of inventory and depreciation while part of the difference between earnings and taxable income is probably due to increasing corporate sophistication of tax management manipulation of earnings played a major role in the widening gap lev and nissim 2002a firm specie c data corroborate the increasing vulnerability of earnings to manipulation the number of earnings restatements by public companies often in the wake of admitted reporting improprieties has skyrocketed in the last three to four years wu 2002 also the frequency of e rms beating analysts forecasts of

an optimal investment and inventory policy the relation between the optimal production level and the optimal investment in a flexible manufacturing machine will be the subject of this paper the study concerns the production of n families of products on one production machine the investment level in a particular production machine is assumed to depend on both the intra and inter family set up times the optimal production level will be shown to depend on the optimal investment choice made and as such on both the intra and inter family set up times the results show the necessity of coordination between several departments as for instance the production planning department and financial department of an organization moreover it will be argued that circumstances exist in which mathematical models can be used in a more qualitative level of analysis

epq models with varying setup cost abstract in this paper the classical economic production quantity epq model is generalized by considering a relationship between the setup cost and the production run length the dependency between the setup cost and run length can be related to process deterioration and learning and forgetting effects two models are developed the first of which is for the case when shortages are not allowed and the other one permits shortages the cost functions associated with these models are proved to be convex and optimal solutions are determined results show that the relationship between setup cost and production run length has a significant impact on the optimal lot size and average total cost in the epq model numerical examples are presented to demonstrate the utility of the models

an economic production quantity model with flexibility and reliability considerations abstract the classical economic production quantity epq model assumes that items are produced by a perfectly reliable production process with a fixed set up cost while the reliability of the production process cannot be perfect without a price its set up cost can be reduced with investment in flexibility improvement an epq model with a flexible and imperfect production process is proposed in this paper this inventory optimization problem is then formulated as a geometric program gp and solved to obtain closed form optimal solutions after the theoretical treatment a numerical example is provided to illustrate how the gp theories are applied to solve a given problem finally some aspects of post optimality sensitivity analysis based on the gp approach are discussed

optimal inventory policies under decreasing cost functions via geometric programming abstract in this paper we establish and analyze two economic order quantity eoq based inventory models under total cost minimization and profit maximization via geometric programming gp techniques through gp optimal solutions for both models are found and managerial implications on the optimal policy are determined through bounding and sensitivity analysis we investigate the effects on the changes in the optimal order quantity and the demand per unit time according to varied parameters by studying optimality conditions in addition a comparative analysis between the total cost minimization model and the profit maximization model is conducted by investigating the error in the optimal order quantity of these two models several interesting economic implications and managerial insights can be observed

journey for green development transformation of china s metal industry a spatial econometric analysis abstract the metal industry mi in china is energy and emissions intensive this paper tries to provide guidance for the green development transformation of china s mi by investigating the green total factor productivity gtfp and its influencing factors using a global data envelopment analysis and a spatial tobit regression model the estimation results show that 1 from 2000 to 2015 gtfp of china s mi enjoyed a considerable improvement however the current value of gtfp of china s mi is still less than 0 5 indicating that gtfp of china s mi is far from efficient 2 the spatial correlation test shows that gtfps of china s provincial mis have positive spatial correlations most of the provinces scattered in high high and low low agglomerations 3 gtfp of china s mi is significantly positive related to the degree of marketization fiscal decentralization environmental regulation industrial scale is significantly negative related to resources endowment and product structure and has u shaped relationship with the level of economic development the above results suggest that china already has made remarkable achievements in promoting green development of its mi however there is much room for further improvement policy options for the green development transformation of china s mi include but are not limited to promoting market oriented and financial system reforms strengthening environmental supervision and optimizing industrial scale and product structure finally recommendations for the effective implementation of these policies are provided at the end of the study

can an emission trading scheme promote the withdrawal of outdated capacity in energy intensive sectors a case study on china s iron and steel industry abstract outdated capacity and substantial potential for energy conservation are the two main features of energy intensive sectors in developing countries such countries also seek to implement market based options to further control domestic carbon emissions as well as to promote the withdrawal of outdated capacity and upgrade production level this paper presents a quantitative assessment of the emission trading scheme ets for china s iron and steel industry the diverse array of normal and outdated capacities was modeled in a two country three good partial equilibrium model simulation results show that the abatement potential can be underestimated if the energy saving effects that result from emission abatement are not considered in the scenario analysis we demonstrated that the free allocation of allowances can cause a competitiveness distortion among domestic normal and outdated capacities given the government s intention to promote outdated capacity withdrawal and production level upgrading an output based allocation approach is strongly suggested for china s iron and steel sector

production inventory models for a damageable item with variable demands and inventory costs in an imperfect production process in this paper economic production quantity epq models for breakable or deteriorating item are developed with variable demands being dependent on time or on hand stock here rate of production and holding cost are time dependent unit production cost is a function of both production reliability indicator and production rate set up cost is also partially production rate dependent the production process produces some imperfect quantities which are instantly reworked at a cost to bring back those units to the perfect ones the production process ultimately depends on both time and reliability indicator the models are formulated as optimal control problems and the total profit functions with effect of inflation and time value of money are expressed as finite integrals over the finite planning horizon the problems are solved using euler lagrange function based on variational calculus and newton raphson method to determine the optimal production reliability indicator r and then corresponding production rates and total profits in some cases results of the models for deteriorating item are obtained as particular cases from those of breakable item models similarly results of simple epq models without damageability are deduced as particular cases numerical experiments are performed to illustrate the models both numerically and graphically

comovement information production and the business cycle abstract recent theoretical research suggests that information production is a positive externality of aggregate economic activity veldkamp 2005 both the quantity and quality of information increase during periods of economic expansion and decrease during periods of contraction based on this insight we hypothesize and confirm that time varying information production drives the comovement patterns observed in stock returns we examine stock return comovement in 36 countries from 1980 to 2007 and show that consistent with the theory comovement patterns are countercyclical that is when information production is high low comovement is low high we also find that the relation between comovement and the business cycle is stronger in countries that experience large intertemporal swings in information production finally we show that the relation between business cycle and comovement is stronger in poor countries countries with less developed financial markets and countries with weaker accounting and transparency standards these results suggest that financial development and transparency are conducive to a steady flow of financial information over the business cycle

approximation methods for the uncapacitated dynamic lot size problem we provide worst case error bounds for several approximation methods heuristics product aggregation and partitioning of the planning horizon for the uncapacitated dynamic lot size problem we propose two managerially oriented heuristics and show that they have a relative wont case error bound equal to two and develop similar analyses for methods known as the least cost per unit heuristic the part period balancing heuristic and an economic order quantity heuristic expressed in terms of a time supply of demand we also show how errors introduced by partitioning of the planning horizon in multi product multi facility problems are bounded by product set up costs and how errors introduced by product aggregation are bounded by set up costs holding costs and demands the latter results suggest methods for product aggregation that minimize the worst case error bounds

the association between financial accounting measures and real economic activity a multinational study abstract we investigate how cross country differences in financial accounting standards affect the relation between financial accounting earnings and real economic value relevant events that underlie those earnings based on previous research and economic theory we hypothesize that because of differences in legal systems and the demand for accounting information differences in legal protection for external shareholders and differences in the degree of tax conformity in our sample countries accounting earnings in the uk and the us will be more closely related to underlying economic activity than will accounting earnings in france and germany empirical results are generally consistent with our hypothesis

the economic order quantity model revisited an extended exergy accounting approach abstract the economic order quantity eoq model has been popular among academicians and practitioners for decades despite the many variants of the eoq that have appeared in the literature to fine tune it to reality it still has limitations a major one is that it does not take into account the hidden costs inherent in inventory systems some of these costs relate to sustainability issues including environmental social labor and economic effects this paper considers some of these costs referred to as the exergetic costs and estimates them using the extended exergy accounting eea approach extended exergy accounting assigns equivalent exergetic values to capital labor and environmental remediation costs of a system the analysis combines the classical exergy analysis with the sustainability factors which are the labor capital and environment the paper uses an exergetic model to determine the eoq inventory policies for three firms operating in the usa germany and china the results show that the eoq is different for the three firms because the equivalent exergy of capital labor and environment remediation costs is different in each country

lead time variability reduction in stochastic inventory models abstract this research is motivated by the realization that japanese manufacturers have devoted much time and effort to establish a long term partnership with their suppliers in order to reduce lead time uncertainty it is very common for a japanese manufacturer to advance money to finance its suppliers and help them meet the rigid delivery standards imposed however there have been very few mathematical analyses of the advantages of investing in such efforts the main objective of this paper is to provide an analytical model to quantify the tradeoffs associated with lower lead time uncertainty in particular we consider the option of investing in order to reduce the lead time variance in an inventory model with stochastic lead time the paper also considers the option of investing in both setup cost and lead time variability reduction numerical results are presented to demonstrate the use of the models sensitivity analysis is performed to indicate under what conditions investment is warranted

productivity changes of asian economies by taking into account software piracy for the past two decades the fast developing asia has emerged as one of the most important economic regions however its economic growth is accompanied with severe software piracy this paper analyzes productivity changes of 11 asian economies and 4 non asian industrialized economies by taking into account software piracy using the malmquist productivity index and its two components efficiency change and technical change over the period 1994 2002 the results indicate that when software piracy is included productivity growth in asian developing economies regresses while productivity growth in the four non asian industrialized economies improves interpretation and implications are provided jel l86 o34

investing in reduced setups in the eoq model this paper is motivated by the observation that the japanese have devoted much time and energy to decreasing setup costs in their manufacturing processes and that there has been little in the way of a formal framework available to use to think about such efforts the object of this paper is to begin to provide such a framework the framework developed identifies only one aspect of the advantages of reducing setups namely reduced inventory related operating costs the other advantages such as improved quality control flexibility and increased effective capacity are not accounted for in this paper nevertheless substantial reductions in setups may be warranted based solely on the benefits identified in this paper the approach taken here introduces an investment cost associated with changing the current setup level and adds a per unit time amortization of this cost to the other costs identified in the standard eoq model the general problem becomes that of minimizing the sum of a convex and a concave function in two special cases the minimization can be carried out explicitly in one of these cases numerous interpretations of the results are made including comparisons of japanese and american practices for example holding other parameters constant there is a critical sales level such that investment is made in reducing setups if and only if the sales rate is above that level when such investment is made the optimal lot size is independent of the sales rate the paper also addresses the joint selection of the setup cost and the sales rate selection of the sales rate is seen as incorporating explicit production and holding costs into the classical monopolist s pricing problem an explicit solution is obtained for the model postulated

bootstrapping the malmquist indexes for italian airports abstract this paper uses data envelopment analysis to assess the operational performance of 28 italian airports during the period of 2000 through 2006 recent developments in bootstrapping techniques are used to correct total factor productivity estimates for bias and to assess the uncertainty surrounding such estimates this study found that the italian airport industry experienced a significant technological regress with few airports achieving an increase in productivity led by improvements in efficiency moreover the paper shows that the form of ownership public majority vs private majority of an airport management company does not significantly affect performance in contrast this type of the concession agreement has positive and significant effects on airport productivity finally the paper highlights the existence of a productivity gap between airports located in the north central part of the country and those located in the south

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

dynamic version of the economic lot size model this article originally appeared in management science october 1958 volume 5 number 1 pp 89 96 published by the institute of management sciences a forward algorithm for a solution to the following dynamic version of the economic lot size model is given allowing the possibility of demands for a single item inventory holding charges and setup costs to vary over n periods we desire a minimum total cost inventory management scheme which satisfies known demand in every period disjoint planning horizons are shown to be possible which eliminate the necessity of having data for the full n periods

product balancing under conditions of quality inflation cost pressures and growth strategies abstract this paper analyzes an organization that has a well defined strategy providing a sustainable competitive advantage this advantage is expressed by at least one dimension of quality on which the product or service exhibits outstanding performance using decreasing and increasing exponential demand functions for price and quality respectively the optimal quality level is characterized when dollar sales volume under a cost based price floor and profit are maximized however as quality inflates the same quality performance is worth less tomorrow than today this paper shows that continuous and simultaneous improvement of operational efficiency and quality is a must and is independent from price setting policies the condition of optimal trade offs among quality dimensions is found for the case when the company competes on multiple quality dimensions finally the conditions are analyzed when the resources of quality are utilized in other market segments as well it is found that the corporate level quality or the utilization level of resources is lower higher than the highest least individual business unit product quality

factor and fuel substitution in china s iron steel industry evidence and policy implications climate change which is induced from energy consumption and co2 emissions has got people s attention hence many strategies and ways are being adopted to mitigate co2 emissions energy substitution is crucial to the promotion of energy conservation and co2 emissions reduction the purpose of this paper is to estimate both inter factor and inter fuel substitution in china s iron steel industry during the period 1985 2011 empirical results show several conclusions for china s iron steel industry 1 own price elasticity of energy is negative so increase in energy price will reduce energy input 2 energy and capital and energy and labor are substitutes and the substitution in energy capital is relatively stronger 3 though coal oil and electricity are also substitutes the substitution effect is not so obvious because of pricing distortions in china the driving forces of energy efficiency change are further discussed and the results show that technology progress is the key factor determining energy intensity therefore market oriented reforms in terms of energy prices improvement in energy substitution including inter factor and inter fuel substation and promotion of energy saving technologies are important means for ensuring future energy conservation and co2 emissions reduction practices in china s iron steel sector

stock prices asset portfolios and macroeconomic variables in ten european countries abstract this paper investigates the relationship between stock indices asset portfolios and macroeconomic variables in ten european countries it is shown that employment imports inflation and interest rates are inversely related to stock prices expectations about future real activity measures for money and the u s yield curve are positively related to stock prices a portfolio of european stock indices was constructed and it is shown that this portfolio is the variable that most strongly explains the variation in the stock prices the associations between stock prices and macroeconomic variables are shown to be strongest in germany the netherlands switzerland and the united kingdom there is a high degree of similarity between the effects in the first three of these countries in several instances the stock prices are related to historic value of economic variables indicating that predictive models can be constructed