stock rationing under service level constraints in a vertically integrated distribution system this paper addresses a rationing problem in a two level vertically integrated distribution system composed of one manufacturer and several retail points the motivating case developed in the vending machine sector and modeled as a newsvendor like problem is representative of many real settings where short term changes in demand can be substantial while capacity modification is not a viable option the paper provides an analytical discussion of the problem from two different standpoints a pure profit maximization perspective and a minimum service level perspective both subject to a product availability constraint that affects the service level the company can provide and the related expected profit by analyzing the lagrangean formulation of the problem we devise efficient computational procedures based on dichotomy search to find the optimal allotments to retailers maximizing the expected profit and ensuring a minimum service level then we extend the analysis to the evaluation of the highest service level that can be provided under a product availability constraint we identify conditions such that the proposed search procedures succeed in finding the optimal solutions as well as bounds for the search domains the proposed approach is legitimated under several demand distribution functions subject to a few commonly adopted restrictions that encompass many of the usually adopted continuous distributions finally the paper presents a three step decision making framework using the proposed procedures summarizing the decision paths the manufacturer might follow in order to optimize the allocation decision

a model of the financial firm with imperfect asset and deposit elasticities abstract the paper develops an intertemporal model to estimate the production technology of financial firms such as banks price taking is testable in each separate market for assets and liabilities and competitive price taking is a nested special case such tests are applied both to outputs and inputs empirical results for a sample of banks in new york and new jersey indicate that price taking applies only in markets for labor and time deposits in markets for loans demand deposits cash and materials the price taking hypothesis is not accepted

can mergers ensure the survival of credit unions in the third millennium abstract the survival of small financial institutions in the third millennium depends on their competitiveness against large bank rivals accordingly credit unions in australia and the united states have attempted to increase efficiency through mergers our paper uses the data envelopment analysis methodology to evaluate the post merger gains in technical and scale efficiency achieved by 31 australian credit union mergers in 1993 1994 and 1994 1995 relative to non merging credit unions when compared with the only us study of credit union mergers journal of banking finance 23 1999 367 386 our findings suggests that mergers are not associated with improvements in efficiency superior to those achieved by internal growth

scale and scope economies in the multi product banking firm abstract the multi product nature of the banking firm is examined utilizing the translog cost function this analysis indicates that contrary to conventional wisdom natural monopoly scale economies and product specific decreasing costs are not robust characterizations of the banking industry there is however evidence that the cost function is characterized by economies of scope the implications of these results are discussed and extensions of this approach suggested

resolving the deposit dilemma a new dea bank efficiency model abstract one of the weaknesses of current bank efficiency models is a disagreement as to the role of deposits in the bank production process some models view deposits as an input while others view them as an output such disparity of approaches results in inconsistent efficiency estimates in this study we propose an alternative data envelopment analysis dea bank efficiency model that treats deposits as an intermediate product thus emphasizing the dual role of deposits in the bank production process consequently the effect of the amount of deposits on bank efficiency depends on the efficiency at both stages of the bank production process the main advantage of our model is that it does not require a researcher to make a judgment call as to whether having more production approach or less intermediation approach deposits is better for bank efficiency our unified framework has the potential to produce more consistent efficiency estimates

the effects of environmental policy towards agriculture on trade some considerations abstract a growing awareness of environmental problems associated with agricultural production has led to the consideration and in many cases the introduction of more stringent environmental controls across industrialized countries in theory countries that introduce costly environmental regulations should experience a reduction in their international trade competitiveness in polluting commodities in contrast countries that fail to undertake an environmental protection programme presumably increase their export market share in the production of items that damage the environment this viewpoint investigates these potential agricultural trade effects and suggests that they are likely to be quite modest

economies of diversification in the banking industry abstract this paper defines a new measure economies of diversification to examine the cost effect of product line expansion this measure is a special case of expansion path subadditivity and contains economies of scope as a special case a nonparametric frontier technique which isolates the effects of inefficiency and scale is used to measure economies of diversification applied to a set of 468 u s depository institutions operating in 1984 we find slight diseconomies of diversification diseconomies of diversification and inefficiency due to the overutilization of resources are found to be more important determinants of bank costs than is the failure to operate at optimal scale

managing product variety with advance selling and capacity restrictions abstract in this research we analyze the impact of advance selling with price discount on a firms ability to maximize the expected profit the production environment of the firm is characterized by short selling cycle multiple products demand variability and capacity restrictions the advance orders are randomly distributed with the parameters dependent on the discount levels under advance selling the advance orders are used to update the demand forecast of selling season and are delivered at the start of the selling season the problem is modeled as a three stage stochastic non linear programming problem we derive the concavity of the problem under customers willingness to buy in advance our solution methodology comprises the variance reduction technique of antithetic variates that gives credible value of price discount levels for different sets of demand values we also provide sensitivity analysis of the problem parameters to derive insights into the behavior of the expected profit and the benefits due to advance selling under capacity restrictions

efficiency and credit rating in taiwan banking data envelopment analysis estimation in this article we use the data envelopment analysis to measure the efficiency of banks before and after credit rating is taken into consideration and we also employ the malmquist productivity index to measure the total factor productivity changes from 2001 to 2003 the results are as follows 1 there is a positive relationship between the efficiency scores and credit rating and thus the credit rating can be a representative to evaluate the performance and quality of a bank 2 we use the wilconxon two sample test of nonparametric statistic to test the influences of credit rating the empirical result shows that the credit rating is proven to influence the efficiency of banks 3 the efficiency scores improve in both investment grade above tw bbb and speculation grade under tw bbb when credit rating is taken into consideration the empirical results show that the efficiency scores of banks with a high credit rating improved relatively more when compared to banks with a lower credit rating

aggregate constrained inventory systems with independent multi product demand control practices and theoretical limitations in practice inventory managers are often confronted with a need to consider one or more aggregate constraints these aggregate constraints result from available workspace workforce maximum investment or target service level we consider independent multi item inventory problems with aggregate constraints and one of the following characteristics deterministic leadtime demand newsvendor basestock policy rq policy and ss policy we analyze some recent relevant references and investigate the considered versions of the problem the proposed model formulations and the algorithmic approaches finally we highlight the limitations from a practical viewpoint for these models and point out some possible direction for future improvements

financial deregulation and total factor productivity change an empirical study of turkish commercial banks abstract in january 1980 a new liberal economic policy was adopted in turkey to promote financial market development and increase the efficiency and productivity of the financial sector by fostering competition among banks as a result of this policy the turkish banking system witnessed a series of legal structural and institutional changes throughout the 1980s to enhance their competitive viability turkish banks responded by streamlining their operations and investing in new technology utilizing a dea type malmquist total factor productivity change index we examine productivity growth efficiency change and technical progress in turkish commercial banks during the deregulation of financial markets in turkey we found that all forms of turkish banks although in different magnitudes have recorded significant productivity gains driven mostly by efficiency increases rather than technical progress efficiency increases however were mostly owing to improved resource management practices rather than improved scales our results also indicate that private banks began to close their performance gap with public banks in the new environment

the comparative efficiency performance of small and large us commercial banks in the pre and post deregulation eras the purposes of this paper are twofold first to employ a flexible non parametric approach to contrast the productive efficiency of a sample of small and large banks in order to examine the relationship between size and productive performance in the banking industry second to investigate whether the relative efficiency performance of small and large banks has changed following the changes in the banking environment in the 1980s and to contrast the rate of technological change achieved by these two groups of banks over this time period the findings based on group specific frontiers suggest that in the pre deregulation environment small banks were more efficient than the large banks while in the deregulated environment small and large banks were equally efficient moreover the dispersion in the efficiency measures of the small banks is found to have increased substantially while that of the large banks changed little over the sample period

productive efficiency performance of minority and nonminority owned banks a nonparametric approach abstract this study examines the efficiency performance of the minority owned banks mobs as multiproduct firms relative to that of the nonminority banks nmobs using a highly flexible nonparametric approach since mobs and nmobs employ distinct technologies the efficiency indices for the two groups are derived relative to their respective group specific frontiers and are contrasted to shed light on the ownership efficiency relationship the mob sample is then disaggregated and the intra group efficiency differentials are investigated the findings support the hypothesis that abstracting the regional regulatory size and maturity characteristics of banks efficiency differentials between mobs and nmobs are statistically insignificant

joint production and pricing decisions for multiple products with cap and trade and carbon tax regulations abstract cap and trade and carbon tax regulations are the two main low carbon policies to curb carbon emissions this paper studies the joint production and pricing problem of a manufacturing firm with multiple products under cap and trade and carbon tax regulations and compares the effects of the two regulations on the total carbon emissions the firm s profit and social welfare the firm faces price sensitive demands and the demands for these products are independent firstly we find that the optimal number of products to be produced under cap and trade regulation carbon tax regulation is determined by the emission trading prices and the cap tax rate secondly we detect that the optimal cap tax rate is decreasing increasing or constant in the environmental damage coefficient finally we discover that the social welfare under carbon tax regulation is not less than that under cap and trade regulation although there is neither one regulation always inducing more profit and having advantages in curbing carbon emissions than the other one

principles for the provision of public goods from agriculture modeling moorland conservation in scotland this paper is concerned with policies for the supply of public environmental goods from the farm sector in particular we characterize the buying of these goods by the public from farmers using the provider gets principle this principle is well established in oecd countries as we demonstrate results from ecological economic modeling of the conservation of heather moorland in northern scotland using this principle are described this model enables us to identify spatially differentiated ecological targets and to calculate the minimum necessary payments needed to achieve these targets

trends in relationship lending and factors affecting relationship lending efficiency abstract this paper investigates the efficiency of relationship managers at the canadian imperial bank of commerce cibc one of canada s largest banks data envelopment analysis dea efficiency scores are analyzed using regression the results demonstrate that managers are less efficient when facing larger numbers of loans or smaller loans m berlin and l j mester on the profitability and cost of relationship lending working paper no 97 43 the wharton school university of pennsylvania 1997 show that credit smoothing is generally suboptimal a more complete explanation is obtained by taking a micro level focus other results indicate that banks may improve profitability by reserving relationship lending for loans of larger size tests of relationships between efficiency and nonperforming loans and of the skimping hypothesis are conducted

note note on optimal ordering quantity to realize a pre determined level of profit in this note we consider the one period inventory model in which it is required to determine the order quantity which maximizes the probability of realizing a predetermined level of profit r we give a condition for determining the optimal order quantity and provide explicit expressions for the optimal order quantity in three special cases

output and productivity in banking concepts in banking output and the empirical literature on bank productivity which employs output concepts are critically surveyed for output the national accounts production and intermediation approaches are compared as regards productivity both partial and total factor productivity measures and the dea and parametric approaches to the latter are assessed among the most striking results is the prevalence of technical inefficiency in banking but it is also suggested that measurement techniques have often outpaced the theory of what is to be measured notably in fields such as joint production risk and competition alternative approaches to address these issues are suggested

environmental costing for agriculture will it be standard fare in the farm bill of 2000 this paper starts by discussing and estimating the environmental costs of agricultural production the author uses a separate benefit transfer intended to expose methodological issues to construct each cost category of agricultures s external effects this is followed by a simple description of the framework for production decisions that account for environmental costs included are attribution of environmental externalities and measurement of environmental costs finally the author discusses research implications of environmental costing including tqm and environmental policy analyses environmental services and their unit values strategies for measuring environmental values and prognosis for agricultural adders 42 refs 1 fig 1 tab

organizational form and efficiency the coexistence of stock and mutual property liability insurers this article introduces a new approach cross frontier analysis for estimating the relative efficiency of alternative organizational forms in an industry the technique is illustrated by analyzing a sample of stock and mutual property liability insurers using nonparametric frontier efficiency methods cross frontier analysis measures the relative efficiency of each organizational form by computing the efficiency of each stock mutual firm relative to a reference set consisting of all mutual stock firms we test agency theoretic hypotheses about organizational form including the managerial discretion and expense preference hypotheses the results indicate that stocks and mutuals are operating on separate production and cost frontiers and thus represent distinct technologies consistent with the managerial discretion hypothesis the stock technology dominates the mutual technology for producing stock outputs and the mutual technology dominates the stock technology for producing mutual outputs however consistent with the expense preference hypothesis the stock cost frontier dominates the mutual cost frontier our findings thus suggest a richer interpretation of organizational form than provided by previous researchers

malmquist indices of productivity growth during the deregulation of norwegian banking 1980 89 productivity growth during the deregulation of the norwegian banking industry is studied within the framework of data envelopment analysis which explicitly allows for multiple outputs introducing malmquist indices for productivity growth total growth can be decomposed into frontier growth and change in each bank s distance to the frontier both the total growth index and its components can be consistently chained over time we find productivity regress at the average bank prior to the deregulation but rapid growth when deregulation took place deregulation also led to less dispersion of productivity levels within the industry

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

an examination of cost structure and production performance of commercial banks in singapore abstract this paper uses a parametric approach in the framework of a translog cost function and a non parametric approach in the framework of linear programming to examine production performance and cost structure of a sample of singaporean commercial banks the results of the parametric methodology suggest that the average cost curve of these banks is u shaped and there are economies of scale for small and medium size banks further analysis provides evidence of economies of scope for all banks regardless of their size the non parametric results indicate that the singaporean banks could have reduced cost by 43 had they all been overall efficient the sources of this cost inefficiency seem to be caused equally by allocative and technical inefficiencies

a parallel production frontiers approach for intertemporal efficiency analysis the case of taiwanese commercial banks abstract a comparison of the efficiency of a production unit at one period with those of other units at another period is challenging because the bases for calculating efficiency are usually different the malmquist productivity index mpi is an effective measure that can overcome this difficulty however the existing measures of this index have various weaknesses with regard to feasibility circularity decomposability and consistency this paper thus develops a model to construct parallel production frontiers for the units at different periods to measure the mpi this model is always feasible the calculated mpi has the property of circularity it can be decomposed into the product of efficiency change and technical change and the results are consistent an application of this model to taiwanese commercial banks for the period 2008 2013 confirms these merits the results also indicate that in general the mpis of these banks increased from 2008 to 2013 and this was attributed to improvements in technology since the efficiencies measured from the parallel model are comparable among different units and different periods they can be used for intertemporal analysis to identify the banks with unsatisfactory performance in different periods

intellectual capital and firm performance evidence from indian banking sector in the aftermath of the 2008 financial crisis the entire indian banking industry was paralysed and their performance was shattered by the unfolding of enormous cases of non performing assets npa

regional concentration and efficiency in mexican manufacturing abstract this paper explores the link between industrial location concentration and economic efficiency in mexican manufacturing using a linear programming approach the authors calculate indices of overall technical allocative and scale efficiency for mexican manufacturing industries by state to test whether in 1985 those regions with high levels of industrial concentration were suffering from the costs of congestion the evidence suggests that at least at the aggregate level there continued to be a positive relationship between industry concentration and efficiency in production there is also evidence that overall efficiency was related to scale efficiency although highly industrialized regions on the production frontier often operated at inefficient scales in particular the most concentrated regions the federal district the state of mexico jalisco and nuevo leon consistently display decreasing returns to scale indicating that the process of industrial concentration may be leading to diseconomies of scale finally an econometric analysis suggests that scale urbanization and agglomeration economies are positively related to overall and technical efficiency at the regional level while foreign ownership is negatively related agglomeration economies at the industry level were not significant the paper also makes a methodological contribution it is the first application of a distance function production methodology to measuring regional efficiency in a developing country it demonstrates how to conduct distance function efficiency analysis using the newly developed gams mathematical programming environment these tools should be of considerable interest to applied microeconomists

single period single product newsvendor model with random supply shock abstract in order to investigate the efficiency of policies made by the industrial administration office iao for short so as to keep market order the authors propose a shocked inventory model of one product with both genuine and counterfeit qualities the checking policies made by the iao are considered to be a random shock for the inventory model by examination of the qualities of the products which will expropriate the counterfeit products the paper makes two contributions first while discussing several conditions the authors provide a basic theory which is a kind of extension of the newsvendor problem and prove some properties of the optimal policies for the shocked inventory model with a fixed random checking rate second the authors give some recommendations as to how the iao can formulate its checking policies an example demonstrates the relationship between checking policies and optimal inventory policies

cost structures in multinational and domestic banking abstract prior research on international banking has proposed many reasons for the multinationalization of u s banks but provided little empirical support for its propositions using a pooled time series data set from 1987 to 1990 this study analyzes the ray and expansion path scale economies and expansion path subadditivity of u s based multinational banks mnbs both at the firm and the plant levels it also measures and analyzes inefficiencies for these banks inefficiencies are measured relative to a thick frontier cost function a similar analysis is conducted for domestic banks dbs for comparison purposes no support is found for the prior belief that similar cost structures exist for mnbs and dbs in general we find that mnbs are able to fully exploit economies of scale and face lesser diseconomies from joint production and lower inefficiencies than dbs

trends in efficiency in response to regulatory reforms the case of indian and pakistani commercial banks this paper attempts to estimate trends in the efficiency levels of indian and pakistani commercial banks between 1985 and 2003 a time period which encompasses two phases of significant change to the regulation of the financial sector in both countries our efficiency estimates show that during the initial years of the post reform period a reduction in efficiency is observed for banks in both countries however efficiency levels were found to have increased subsequently suggesting a period of initial adjustment throughout much of the 1990s followed by a subsequent correction in the latter part of the sample period

estimating input specific technical inefficiency the case of the tunisian banking industry abstract this paper presents an econometric model to estimate input specific technical efficiency iste in a panel data framework it extends the few existing models to estimate iste it can be applied to any flexible functional form and technical inefficiency is firm specific and time variant this model is applied to obtain estimates of technical inefficiency specific to factors of production in the tunisian banking industry it is shown that technical efficiency of labor and capital inputs are decreasing over time labor input is more inefficiently used than capital input and banks which are relatively more efficient in using capital input are less efficient in using labor input

technical efficiency and scale efficiency in the italian banking sector a non parametric approach measures of technical and scale efficiencies are derived in the italian banking industries by implementing non parametric data envelopment analysis on a cross section of 174 italian banks taken in 1991 the methodology of the parametric and non parametric approaches to measure efficiency are discussed the existence of both technical and allocative efficiency is established this result is robust to modifications in the specification of inputs and outputs suggested by the intermediation approach and by the asset approach in implementing both the intermediation and the asset approach the traditional specification of inputs is modified to allow an explicit role for financial capital in addition regression analysis is used on a bank specific measure of inefficiency to investigate determinants of banks efficiency efficiency is best explained by productive specialization size and to a lesser extent by location

efficiency analysis in banking firms an international comparison abstract the intensive process of financial european integration together with the profound transformation and deregulation that has taken place in the spanish banking system justifies the evaluation of its efficiency in comparison with that of other banking systems in this context the aim of this study is to analyze the productivity efficiency and differences in technology of several banking systems using a non parametric approach together with the malmquist index we compare the efficiency productivity and differences in technology of different european and us banking systems for the year 1992

the technical efficiency of large bank production abstract significant difficulties in commercial banking in the late 1980s raise questions about bank performance and efficiency with the use of data envelopment analysis dea we consider the relative technical efficiency of 201 large banks from 1984 to 1990 bank technical inefficiency averages just over 5 percent much lower than found in existing estimates larger and more profitable banks have higher levels of technical efficiency at the same time however larger banks are more likely to operate under decreasing returns to scale

optimal acquisition and remanufacturing policies for multi product remanufacturing systems abstract this paper studies an acquisition and remanufacturing problem in a market driven multi product remanufacturing system where the remanufacturer acquires multiple used products cores of highly variable quality under independently uncertain demand and carbon emissions regulation in order to balance between the environmental and economic benefit the problem is formulated as a nonlinear programming model in presence of the quality variability of cores and carbon tax scheme subject to budget and risk constraints since the average cost of the remanufactured products is independent of the remanufacturing quantity the model is then decomposed into two separated sub problems namely the remanufacturing problem and the acquisition problem in the remanufacturing problem the optimal remanufacturing policies including the optimal remanufacturing cost thresholds and the optimal remanufacturing rate are derived in the acquisition problem the optimal policies of core portfolio acquisition quantities and remanufacturing quantities can be derived the acquisition problem viewed as an extended multi product newsvendor problem mpnp is a convex optimization problem furthermore a two tier bisection method with polynomial computational complexity can be developed to obtain the optimal policies based on the karush kuhn tucker kkt conditions finally numerical experiments are provided to show the application of the model and the effect of the quality variability

multi item quick response system with budget constraint quick response mechanisms based on effective use of up to date demand information help retailers to reduce their inventory management costs we formulate a single period inventory model for multiple products with dependent multivariate normal demand distributions and a given overall procurement budget after placing orders based on an initial demand forecast new market information is gathered and demand forecast is updated using this more accurate second forecast the retailer decides the total stocking level for the selling season the second order is based on an improved demand forecast but it also involves a higher unit supply cost to determine the optimal ordering policy we use a computational procedure that entails solving capacitated multi item newsboy problems embedded within a dynamic programming model various numerical examples illustrate the effects of demand variability and financial constraint on the optimal policy it is found that existence of a budget constraint may lead to an increase in the initial order size it is also observed that as the budget available decreases the products with more predictable demand make up a larger share of the procurement expenditure

transaction costs communication and spatial coordination in payment for ecosystem services schemes agricultural producer participation and spatial coordination of land use decisions are key components for enhancing the effective delivery of ecosystem services from private land however inducing participation in payment for ecosystem services schemes for coordinating land management choices is challenging from a policy design perspective owing to transaction costs associated with participation this paper employs a laboratory experiment to investigate the impact of such costs on participation and land use in the context of an agglomeration bonus ab scheme the ab creates a coordination game with multiple nash equilibria related to alternative spatially coordinated land use patterns the experiment varies transaction costs between two levels high and low which affects the risks and payoffs of coordinating on the different equilibria additionally an option to communicate is implemented between neighbors arranged on a local network to facilitate spatial coordination results indicate a significant difference in participation and performance under high and low transaction costs with lower uptake and performance when transaction costs are high these effects are however impacted by transaction costs faced in the past communication improves both ab participation rates and performance with the effect being greater for participants facing high transaction costs

cost efficiency and financial and geographical characteristics of banking sectors in the mena countries abstractwe utilize the translog stochastic frontier model to estimate the cost efficiency levels for conventional and islamic cooperation council gcc and non gcc banks in the middle east and north african mena countries the estimated cost efficiency averages around 77 for those mena banks but with slight changes in this score for the individual countries the results also show that the banks in the gcc countries are the most efficient in the region and the efficiency scores for the conventional and islamic banks are similar finally the recent financial crisis seems to have a slight impact on the observed efficiency scores of those banks

scale economies in banking a restructuring and reassessment the issue of scale economies in banking has a rich history most earlier studies report modest operating cost scale economies for small institutions those with less than about 50 million of deposits in 1968 dollars but are unclear where these economies might end if at all unfortunately these studies are limited in four important respects first those that were well specified did not measure the total cost of banking operations but concentrated on estimating scale economies for individual banking functions e g demand deposits separately from commercial loans second an average cost curve that could take a u shape over the full range of banks was not fitted either because larger banks were not included or because of the functional form used cobb douglas consequently the optimum or minimum cost size of a bank or office could not be determined third the variables measuring the costs of branching were misspecified fourth the branch

measuring the efficiency of multiunit banking an activity analysis approach abstract we present an activity analysis model of multiunit banking multiunit banks include banks with several branches multibank holding companies with several affiliate banks and banks that result from the merger or consolidation of two or more banks in addition various efficiency measures are presented in an attempt to gauge the potential gains from multiunit banking

the technical efficiency of us banks abstract the paper uses a non parametric frontier approach to measure the technical efficiency of a sample of u s banks the results indicate that these banks could have produced the same level of output with only 70 of the inputs actually used in addition most of this inefficiency is due to pure technical inefficiency wasting inputs rather than scale inefficiency operating at non constant returns to scale finally regression analysis indicates that the technical efficiency of the banks is positively related to size negatively related to product diversity and not at all related to the extent to which branch banking is allowed

an efficient algorithm for capacitated assortment planning with stochastic demand and substitution abstract the ever increasing product variety in grocery retailing is in conflict with the limited shelf space managing the assortment and regular order quantity for perishable and non perishable products is therefore a core task for retailers retailers want to maximize profit by considering potential revenues purchase costs diminishing profits for products and opportunity costs for unfulfilled demand when determining assortment sizes and order volume to meet stochastic consumer demand we considered a newsvendor based decision model that jointly optimizes assortment size and the associated order volumes for listed items the model considers out of assortment ooa and out of stock oos substitution effects the model is a structural equivalent to the model described in kok and fisher 2007 and solved there via a heuristic procedure we develop an optimal solution procedure and a time efficient heuristic that solves the model the heuristic suggested is applicable for practically relevant large scale problem instances numerical tests reveal that the heuristic procedure produces close to optimal solutions and outperforms the kok and fisher heuristic with regard to both computational time and solution quality a simulation study with discrete demand justifies our approach with using continuous demand distributions the numerical analyses show that considering substitution effects in a decision based model has a significant impact on the total profit and solution structure further managerial insights are presented with regard to assortment heterogeneity when shelf size substitution and demand variability are varied

output allocative and technical efficiency of banks abstract in this paper we calculate output allocative and technical efficiency for a sample of small banks operating in 1982 we do so by estimating a shephard type output distance function as a deterministic frontier in general we find that the banks in our sample are output inefficient

effects of constrained supply and price contracts on agricultural cooperatives planning strategies depend in part on the supply flow structure of a supply chain in food supply chains many firms are constrained by raw material supply e g vegetables and milk this paper first examines the economic consequences of constrained supply in agricultural cooperatives secondly it deals with the effects of adding price contracts to the current cooperative contract this model combines an inventory policy approach and a monte carlo simulation to take into account price uncertainty we illustrate our results using the case of a dairy cooperative c 2008 elsevier b v all rights reserved

assessing productive efficiency of banks using integrated fuzzy dea and bootstrapping a case of mozambican banks performance analysis has become a vital part of the management practices in the banking industry there are numerous applications using dea models to estimate efficiency in banking and most of them assume that inputs and outputs are known with absolute precision here we propose new fuzzy dea level models to assess underlying uncertainty further bootstrap truncated regressions with fixed factors are used to measure the impact of each model on the efficiency scores and to identify the most relevant contextual variables on efficiency the proposed models have been demonstrated using an application in mozambican banks to handle the underlying uncertainty findings reveal that fuzziness is predominant over randomness in interpreting the results in addition fuzziness can be used by decision makers to identify missing variables to help in interpreting the results price of labor price of capital and market share were found to be the significant factors in measuring bank efficiency managerial implications are addressed

the capacitated newsboy problem with random yield the gardener problem abstract this publication is the third in a series of articles by abdel malek et al 2004 exact approximate and generic iterative models for the multi product newsboy with budget constraint international journal of production economics 91 189 198 and abdel malek and montanari 2005 an analysis of multi product newsboy problem with a budget constraint international journal of production economics 97 296 307 which appeared in ijpe addressing issues regarding the newsboy models in this paper models are developed to extend the existing ones to cover random yield scenarios we designate this type of models as the gardener problem the models are based on the application of lagrange multipliers leibniz s rule and newton s method to obtain the optimum solution for the considered random yield and probabilistic demand situations the developed methodologies are applicable to general probability distribution functions examples are given to show the applicability of the developed approach to different probability distributions for both the supply and the demand as well as for interdependent yield structures

exploring efficiency differences over time in the spanish banking industry abstract over the last 15 years the competitive conditions under which spanish banking firms operate have become much tighter deregulation has affected both banks and savings banks allowing them to expand geographically and to choose less regulation conditioned output mixes this paper analyzes how in these circumstances banking efficiency has been affected considering two specifications of output and analyzing the dynamics of the entire distribution not only mean and standard deviation results differ depending on the output definition but they show that in general efficiency scores exhibit dynamic patterns that only two moments of the distribution hardly capture in particular regardless of the output definition considered efficiency scores were more dispersed in 1985 and more concentrated in 1995 and there were substantial changes in firms efficiency relative positions as measured by transition probability matrices in addition the multi modality of the distributions has almost disappeared at the end of the period

technical scale and allocative efficiencies in u s banking an empirical investigation a nonparametric frontier approach is used to calculate the overall technical pure technical allocative and scale efficiencies for a sample of 322 independent banks the sample was drawn from the federal deposit insurance corporation tapes on the reports of condition and reports of income call reports for the year 1986 the results indicated a low level of overall efficiency the main source of inefficiency was technical in nature rather than allocative separate efficiency frontiers were constructed to test the effect of branching however the distributions of efficiency measures for branching and non branching banks were not found to be different

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

banking efficiency in the nordic countries abstract evidence of the relative competitiveness of the banking industries in three nordic countries is provided by applying data envelopment analysis of productivity on the national and the pooled data sets the analysis produces a detailed account of how well banks from different countries and different sizes may be prepared to meet the more intense competition of a common european banking market

dea ar profit ratios and sensitivity of 100 large u s banks abstract several important dea ar concepts were applied here to banking for the first time this application includes classification sensitivity uniqueness linked cones lcs and profit ratios notably large bank behavior seems to be explained better by profit ratios than by relative efficiency measures of dea efficiency ar efficiency and lc profit ratios were made for a bank panel of the u s s 100 largest banks in asset size from 1986 to 1991 high levels of inefficiency were found as in previous studies classification of the dea efficiency measures identified the inefficient dmus with some positive primal slacks sensitivity analysis of the dea efficiency measures showed that the extreme efficient classification was generally relatively insensitive to errors in the data the ars eliminated i 44 to 60 of the dea extreme efficient dmus and ii all of the banks with unprofitable actual profit ratios some statistical analyses highlight the superiority of the lc profit ratios relative to the ar efficiency measures

technical progress inefficiency and productivity change in u s banking 1984 1993 studies often find that on average u s commercial banks are quite inefficient and the authors find that banks became more technically inefficient between 1984 and 1993 from a new decomposition of the malmquist productivity index into changes in pure technical and scale efficiency as well as both pure technical changes and changes in scale of technology they find that much of the inefficiency increase can be attributed to the general failure of banks to adopt technological improvements made by a few banks that advanced the efficient frontier small banks experienced especially large decreases in both efficiency and productivity

the impact of financial liberalization on bank efficiency evidence from latin america and asia this article investigates the impact of financial liberalization on bank efficiency using data for a sample of over 4000 bank year observations from ten emerging economies for the period 1991 2000 we use data envelopment analysis dea to calculate bank efficiency at the individual bank level bank efficiency measures are then aggregated at the country level to investigate the relationship between financial liberalization and bank efficiency using a panel least square fixed effects model overall we find strong support for the positive impact of financial liberalization programmes on bank efficiency

x efficiency in australian banking an empirical investigation this paper empirically investigates the x eaciency technical and allocative in australian banks a non parametric method of data envelopment analysis dea has been used to arrive at the eaciency scores banks in this sample were found to have low levels of overall eaciency compared with the banks in the european countries and in the us the results indicate that as a source of overall ineaciency the technical component was more important than the allocative component thus the ineaciency in australian banks can be attributed to wasting of inputs technical ineaciency rather than choosing the incorrect input combinations allocative ineaciency domestic banks were found to be more eacient than foreign owned banks the study has important implications such as guiding the government policy regarding deregulation and mergers since the study pinpoints the sources of ineaciency it would also help banks with strategic planning 2001 elsevier science b v all rights reserved

multi product newsboy problem with limited capacity and outsourcing this paper considers a multi product newsboy system that produces multiple products for fulfilling independently uncertain demands which share the same production capacity to deal with possible shortage of limited capacity productions can be outsourced we consider two outsourcing strategies zero lead time outsourcing and nonzero lead time outsourcing the structural properties and solution procedures for the profit maximization models are developed numerical results are provided for obtaining some managerial insights

how should we incentivize private landowners to produce more biodiversity globally much biodiversity is found on private land acting to conserve such biodiversity thus requires the design of policies which influence the decision making of farmers and foresters in this paper we outline the economic characteristics of this problem before reviewing a number of policy options such as conservation auctions and conservation easements we then discuss a number of policy design problems such as the need for spatial coordination and the choice between paying for outcomes rather than actions before summarizing what the evidence and theory developed to date tell us about those aspects of biodiversity policy design which need careful attention from policy makers and environmental regulators

multi product budget constrained acquisition and pricing with uncertain demand and supplier quantity discounts abstract we consider the joint acquisition and pricing problem where the retailer sells multiple products with uncertain demands and the suppliers provide all unit quantity discounts the problem is to determine the optimal acquisition quantities and selling prices so as to maximize the retailer s expected profit subject to a budget constraint this is the first extension to consider supplier discounts in the constrained multi product newsvendor pricing problem we establish a mixed integer nonlinear programming minlp model to formulate the problem and develop a lagrangian based solution approach computational results for the test problems involving up to thousand products are reported which show that the proposed approach can obtain high quality solutions in a very short time

the effect of off farm work on the intensity of agricultural production changes in agricultural production methods have been associated with environmental pressure and a loss of natural habitats this paper explores the extent to which farmer participation in off farm work an increasing phenomenon in most developed countries changes the intensity of agricultural input use focusing in particular on fertilizer and crop protection product use a sample selection model that accounts for both unobserved heterogeneity between farms and the potential simultaneity between farm operations and hours worked off farm is estimated for 2 419 farms in england and wales the econometric evidence indicates that the input intensity of products which have well established links to environmental damage can increase as well as decrease the results suggest that that fertilizer intensity may decline as off farm labor increases while the use of crop protection per hectare increases as off farm work increases

economic cost scale efficiency and competitive viability in banking this paper addresses the issue of the competitive viability of banks of different scales and scopes of operation and the implications that this may have for the evolving structure of the banking and financial services industry unlike previous papers this paper is the first to include both production and opportunity costs in an empirical evaluation of bank efficiency no consistent evidence is reported to suggest that banking organizations can achieve further gains in either production or economic efficiency by expanding beyond 2 billion dollars of total assets thus it is likely that smaller less diversified banking organizations will remain competitively viable copyright 1996 by ohio state university press

efficiency and risk in taiwan banking sbm super dea estimation in this study we adopt the two data envelopment analysis dea methods including banker charnes cooper bcc and slacks based measure sbm super efficiency to investigate whether a bank s technical efficiency index s results incorporating account risk and not incorporating account risk differ significantly the information is obtained from 43 taiwanese banks for the period 1998 to 2002 we also employ the nonradial and slacks based malmquist total factor productivity tfp index to measure the impact of productivity change on the panel data our empirical results from the dea approach are summarized as follows 1 loan quality factors have an impact on a bank s efficiency in general the bank with a higher degree of problem loans drops down its efficiency by incorporating account risk however the bank with a lower degree of problem loans increases its efficiency by incorporating account risk 2 super efficiency provides a good framework for ranking efficient units 3 based on the nonradial an

the dominance of inefficiencies over scale and product mix economies in banking abstract this study measures and analyzes inefficiencies for all u s banks in 1984 inefficiencies are measured relative to a thick frontier cost function and are found to dominate measured scale and product mix economies most inefficiencies are operational in nature involving the overuse of physical inputs rather than financial involving overpayment of interest also technical inefficiencies proportionate overuse of all inputs dominate allocative inefficiencies improper mix of inputs these results suggest that competitive pressures in banking from deregulation will be focused primarily on banks that do not control costs rather than on those of a particular size or product mix

productivity growth in large us commercial banks the initial post deregulation experience abstract we explore productivity growth for a group of 201 large us commercial banks over the initial post deregulation period from 1984 to 1990 using data envelopment analysis dea we measure productivity growth using malmquist productivity indexes and isolate the contributions of technical change technical efficiency change and scale change to productivity growth we find overall productivity growth at the rate of about 4 5 per year on average but productivity declined by 7 61 between 1984 and 1985 and by 0 33 between 1988 and 1989 our second stage panel regressions reveal that larger asset size and specialization of product mix associate with higher productivity growth while higher equity to assets associates with lower productivity growth

technical and scale efficiency of japanese commerical banks a non parametric approach not only are the nature and extent and scale efficiency of japanese commerical banks studied but a relationship between both organizational status and size efficiency is also announced the efficiency measures are computed from a 1990 sample of cross sectional data for the estimation we employ the non parametric approach which has recently been gaining popularity for the studies of banking efficiency outside japan

scale economies cost efficiencies and technological change in federal reserve payments processing the payments system the means of conducting transactions in an economy hume s oil has undergone tremendous change over the centuries commodity money was replaced by fiat usually paper money reducing transportation and storage costs the invention of checks to supplement fiat money further reduced transportation and storage costs lessened the problem of theft and provided a record of transactions most recently the advent of electronic payment instructions has greatly reduced the time and handling costs associated with checks between the great evolutionary leaps forward that gave rise to new forms of payment instructions smaller degrees of gradual evolution occurred within each payment mechanism refining and improving them and reducing the costs associated with their use

the public accounting industry production function abstract a translog function is specified to represent the relation between revenue and human resource inputs in public accounting firms estimation of the model using a balanced panel of annual data for 64 large cpa firms for the period 1995 1999 indicates that increasing returns to scale prevail in the public accounting industry justifying recent merger and acquisition activities among accounting firms average marginal revenue product of partners increased monotonically from 1995 to 1998 decreased slightly in 1999 and was about nine times that of other professionals during 1995 1999 the public accounting industry exhibited continuing improvement in productivity over the 5 years

scale elasticity versus scale efficiency in banking in the early bank cost literature many of the studies found scale elasticities significantly different from unity as a result the authors suggested that changes in industry structure could produce cost savings through increased efficiency recent bank cost studies improved upon previous methodologies by utilizing flexible functional forms accounting for multiproduct production processes estimating scale measures at both the branch and firm level distinguishing between branch and unit bank technologies resulting from regulatory restrictions etc the typical finding from the recent studies is that relatively minor scale economies exist in banking since the scale elasticity measure differs little from a value of unity this reported finding is usually followed by a general statement that banks operate relatively efficiently with respect to the scale of production and that the potential cost gains from exploiting scale advantages via merger or growth activities appear to be relatively minor the implication from the conclusions drawn by the authors of numerous studies is that scale elasticity and scale efficiency are essentially synonymous the derivation of one automatically provides an accurate or approximate value for the other the purpose of this article is to bring attention to a common confusion in the literature between two relatively straightforward concepts scale elasticity and scale efficiency the bank production process is one of the most extensively researched aspects of bank behavior until recently however studies have not typically evaluated scale efficiency instead scale elasticity estimates have been used as a proxy for efficiency and elasticity measures close to 1 0 are taken to imply that scale inefficiency is trivial scale inefficiency is typically assumed to be linearly

the effect of organizational structure on efficiency evidence from the spanish insurance industry this paper provides new information on the effects of organizational structure on efficiency by analyzing spanish stock and mutual insurers over the period 1989 1997 we test the efficient structure hypothesis which predicts that the market will sort organizational forms into market segments where they have comparative advantages and the expense preference hypothesis which predicts that mutuals will be less efficient than stocks technical cost and revenue frontiers are estimated using data envelopment analysis the results indicate that stocks and mutuals are operating on separate production cost and revenue frontiers and thus represent distinct technologies in cost and revenue efficiency stocks of all sizes dominate mutuals in the production of stock output vectors and smaller mutuals dominate stocks in the production of mutual output vectors larger mutuals are neither dominated by nor dominant over stocks in the cost and revenue comparisons thus large mutuals appear to be vulnerable to competition from stock insurers in spain overall the results are consistent with the efficient structure hypothesis but are generally not consistent with the expense preference hypothesis

making the commons work conservation and cooperation in ireland commonage represents land held under common property that incorporates a system of local cooperative arrangements and rules to conserve and manage the irish uplands we analyze the institutional and economic factors that influence the behavior of commonage farmers under a common property regime using a recursive bivariate probit model results show that 1 cooperation has a positive and important impact on commonage conservation 2 agricultural policies by way of livestock premia increase the level of degradation while 3 farm financial support through agrienvironment measures positively affects commonage conservation and encourages cooperation between farmers

short run cost inefficiency of commercial banks a flexible stochastic frontier approach we adopt the intermediation approach and use a flexible stochastic frontier to examine the cost efficiency of united states commercial banks with total assets in excess of million we find an average overall inefficiency of just under 10 percent a level somewhat lower than found in previous work our analysis of intra industry variation concludes that inefficiency generally rises with bank size further banks that have branching networks either domestic or foreign have higher inefficiency on average but at the same time inefficiency falls as the number of offices in the branch network expands state level data on the ease of serviceing the market competition from savings institutions and the financial sophistication of depositors significantly affect bank inefficiency generally with the expected signs finally our findings suggest that regulatory changes that increase capital requirements may lead to increased bank efficiency in the short run copyright 1994 by ohio state university press

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

firm efficiency and the regulatory closure of s ls an empirical investigation this paper uses a two step methodology to examine the relationship between firm inefficiency and the regulatory closure of savings and loans s ls in the first step using multiproduct translog stochastic cost frontiers the authors estimate inefficiency scores separately for mutual and stock s ls operating in the southwest in 1988 they use the inefficiency scores in second step logit models to identify determinants of regulatory closure for both mutual and stock s ls the authors find a significant positive relationship between firm inefficiency and regulatory closure they also find a greater probability of closure for s ls in economically depressed states copyright 1993 by mit press

mergers and technical efficiency in spanish savings banks a stochastic distance function approach abstract the aim of this paper is to test the temporal variation of technical efficiency of spanish savings banks during the period 1985 1998 furthermore we test whether merged and non merged firms have different levels and temporal patterns of technical efficiency a stochastic output distance function r w shephard theory of cost and production functions princeton university press princeton nj is employed to accommodate multiple output technology the distance function provides the advantage that it does not need information about prices so it can accommodate the multi product nature of the financial sector only using the quantities as data an important point when the assumptions about perfectly competitive markets are unlikely to be met the temporal variation of efficiency is modeled extending the battese and coelli journal of productivity analysis 3 1992 153 169 approach in two ways relaxing the monotonicity of the temporal variation pattern of the efficiency term and allowing for different patterns of efficiency change between merged and non merged firms

evaluating the cost efficiency of the italian banking system what can be learned from the joint application of parametric and non parametric techniques abstract research on bank efficiency has developed in two separate streams econometric studies and data envelopment analysis a linear programming technique these two branches of literature have developed quickly but separately in this paper these two approaches have been tested on a common panel of 270 italian banks and this has suggested the following i econometric and linear programming results do not differ dramatically when based on the same data and conceptual framework ii when differences arise they can be explained by going back to the intrinsic features of the models moreover some findings on italian banks may be of interest also to the international reader i efficiency scores show a high variance ii the banking system is split in two between northern and southern banks iii there is a direct rather than inverse relationship between productive efficiency and asset quality iv the efficiency of italian banks did not increase over the period 1988 1992

x efficiency and technical efficiency efficiency measurement has become a very popular field in applied economics in recent years and with this interest there has been a large intellectual investment in refining the empirical methods available to researchers in the area in this paper we relate these developments to harvey leibenstein s original 1966 insight into the psychological ideas underlying the notion that economic agents may not achieve maximal efficiency in their productive decisions and behaviour of course it is always possible to argue that apparent inefficiency only arises from a failure of the observer to realise what it is that is being maximized however we evade this easy escape route into non falsifiable hypothesizing and instead take at face value the fact that too many empirical studies have come up with substantial measures of inefficiency for us to ignore its importance for normative economics

the optimal dynamic allocation of conservation funds under financial uncertainty abstract this paper analyses a situation where the survival of an endangered species depends on certain types of conservation measures being carried out regularly yet there is financial uncertainty in the future periodical availability of a budget to finance the conservation measures one option to insure against future budget uncertainty is to save money to maximise the long term survival of the endangered species it has to be decided in each period whether to spend the available money now or to allocate it to future use the paper provides an ecological economic model for this stochastic dynamic optimisation problem the findings include that the available money should be allocated as evenly as possible among periods which may require some precautionary saving in early periods to take uncertainty into account under certain conditions however increasing uncertainty may at least temporarily increase the optimal payment among other parameters the amount of precautionary actions depends on the magnitude of natural variation in the species population

product variety arising from hedging in the fashion supply chains consider a well defined fashion apparel category where the variants are distinguished by style and colour and are subject to two equally likely states of the world state1 when some variants become popular and others unpopular and state2 when the reverse takes place we analyse the optimal portfolio and variety arising from hedging against uncertainty triggered by the states by integrating the markowitz and the newsboy models while carefully considering demand correlations we show that due to the complex structure of the uncertainty building hedging portfolios with competing items is necessary for optimality we also show how mis specifying the distributions can lead to very bad trade offs between risk and expected profit caused by a lack of proper hedging

targeting green payments under a budget constraint this paper examines the impact of regulatory budget constraints on subsidy rates intended to reduce farm emissions this paper focuses on the impact that subsidy rates developed under a limited budget may be optimally differentiated to target in addition to marginal damages features such as abatement costs income transfer and producers participation in the policy the degree to which subsidy rates optimally target these other features depends on how the subsidy is implemented or on how benchmarks for pollution abatement are defined eight hypothetical farms were subjected to five budget levels under three policy scenarios 1 optimally set benchmarks 2 historical benchmarks and 3 uniform benchmarks setting subsidy rates equal to the imputed marginal benefits of abatement is not necessarily optimal under budget constraints and when the regulatory authority is restricted in setting the subsidy benchmark when the benchmark is restricted optimal subsidy rates target marginal costs and income transfer to producers in addition to marginal benefits the optimal subsidy rates in the context of a uniform benchmark were essentially uncorrelated with benefits given a budget large enough to optimally fund a large diverse group of producers

technical scale and allocative efficiencies of turkish banking industry this paper investigates input and output efficiency in the turkish banking industry to understand the impact of size international variables ownership control and governance on profit cost allocative technical pure technical and scale efficiency measures employing a non parametric approach along with a parametric approach we estimate the efficiency of turkish banks over the 1988 1996 period this period allows us to account for the changes in the macro economy and regulatory treatment of the turkish banking industry over time our results suggest that the heterogeneous characteristics of banks have significant impact on their efficiency moreover cost and profit efficiencies of the turkish banks have exacerbated over time results also indicate that the dominant source of inefficiency in turkish banking is due to technical inefficiency rather than allocative inefficiency which is mainly attributed to diseconomies in scale to the extent that they chose an inefficient level of production bank management is responsible for scale inefficient operations however increasing demand for banking services in the nineties fueled by the state s increasing demand for funds to finance chronic budget deficits and high growth policies and the oligopolistic nature of the turkish banking market do not justify scale adjustments our policy suggestions are that the government implement financial reform packages that foster competition in the banking market and that the industry devise incentive schemes to improve managerial efficiency

spatially uniform versus spatially heterogeneous compensation payments for biodiversity enhancing land use measures the importance of compensation payments for biodiversity enhancing land use measures has grown over the past decade particularly in connection with agri environmental policy given that both the costs and the benefits of biodiversity enhancing land use measures are subject to spatial variation the criterion of cost effectiveness calls for spatially heterogeneous compensation payments however when deciding whether to implement uniform or heterogeneous compensation payments the regulator has to compare the disadvantage of uniform payments in terms of cost effectiveness with the disadvantages of spatially heterogeneous payments to help resolve this issue this paper provides a simple ecological economic model that allows the reduced cost effectiveness associated with uniform payments for biodiversity enhancing land use measures to be assessed for different types of benefit and cost functions