improving supply chain performance and managing risk under weather related demand uncertainty we consider a manufacturer retailer supply chain for a seasonal product whose demand is weather sensitive the retailer orders from the manufacturer supplier prior to the selling season and then sells to the market we examine how a manufacturer can structure a weather linked rebate to improve his expected profit the proposed class of rebate contracts offers several advantages over many other contract structures including no required verification of leftover inventory and or markdown amounts and no adverse effect on sales effort by the retailer we provide a thorough analysis of the manufacturer s and retailer s decisions in this context we show that the weather linked rebate can take many different forms and this flexibility allows the supplier to design contracts that are pareto improving and or limit his risk in offering the contract and the retailer s risk in accepting it for weather rebates with certain characteristics the manufacturer can fully hedge his risks of offering a weather rebate by paying a risk premium we show how this can be accomplished we also show that the basic structural results extend to settings in which the two parties would like to limit their risk

optimal flexibility configurations in newsvendor networks going beyond chaining and pairing we study the classical problem of capacity and flexible technology selection with a newsvendor network model of resource portfolio investment the resources differ by their level of flexibility where level k flexibility refers to the ability to process k different product types we present an exact set theoretic methodology to analyze newsvendor networks with multiple products and parallel resources this simple approach is sufficiently powerful to prove that i flexibility exhibits decreasing returns and ii the optimal portfolio will invest in at most two adjacent levels of flexibility in symmetric systems and to characterize iii the optimal flexibility configuration for asymmetric systems as well the optimal flexibility configuration can serve as a theoretical performance benchmark for other configurations suggested in the literature for example although chaining is not optimal in our setting the gap is small and the inclusion of scale economies quickly favors chaining over pairing we also demonstrate how this methodology can be applied to other settings such as product substitution and queuing systems with parameter uncertainty

rethinking the brain drain abstract when productivity is fostered by both the individual s human capital and by the average level of human capital in the economy individuals underinvest in human capital a strictly positive probability of migration to a richer country by raising both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of nonmigrants in the country can enhance welfare and nudge the economy toward the social optimum under a well controlled restrictive migration policy the welfare of all workers is higher than in the absence of this policy

operational hedging strategies and competitive exposure to exchange rates this paper investigates the impact of operational flexibility on firms economic exposure to currency fluctuations in the presence of global competition we consider a global firm who sells as a monopolist in the domestic market and also sells to a foreign market facing competition from a local competitor of certain capacity we compare the effects of two operational strategies of the global firm namely matching currency footprints natural hedge and the capacity pooling strategy with allocation flexibility for a two stage stochastic model we derive the optimal capacity and selling decisions for the global firm and from the comparative statics analysis of our model we infer useful managerial insights 1 we find that operational flexibility enables the global firm to exploit the possible high exchange rate i e devalued home currency realizations for profit improvement and thus increases in the long run the firm s expected profit 2 furthermore operational flexibility allows for downside risk control as the exchange rate becomes more volatile since the resource pooling option cleverly exercised minimizes the impact of unfavorable currency realizations 3 the global firm s operational flexibility increases its competitor s downside risk but may also benefit the competitor s expected profit since a flexible global firm may decide not to compete when the exchange rate is not favorable in conclusion our paper substantiates that natural hedge is not effective from a profit maximization perspective we clearly illustrate the robust profit maximizing performance and reasonable downside risk control of operational hedging approaches which rely on the clever exercising of operational flexibility options such as resource pooling and allocation in handling competitive exposure to fluctuating exchange rates

customer and retailer rebates under risk aversion abstract in a supply chain setting we analyze a manufacturer s customer and retailer rebates which are sales incentives offered to the end buyers and retailers respectively the performance of both rebates is influenced by the retailer s objective and response to the promotion due to his intermediary position in the channel earlier studies investigating rebates in distribution channels have traditionally assumed that the retailer is risk neutral with the objective of maximizing expected profits in our paper we consider a risk averse retailer we formally model risk aversion by adopting the conditional value at risk cvar decision criterion using a stochastic and effective price dependent demand we analyze the manufacturer s rebate amount decisions and the retailer s joint inventory and pricing decisions in a game theoretical framework we provide several structural properties of the objective functions and show monotonicity of the retailer s decisions in the degree of risk aversion for the case of retailer rebates we characterize the unique equilibrium and for the case of customer rebates we prove the existence of an equilibrium using numerical examples we provide further insights on the impact of risk aversion for example given an exogenous wholesale price we observe a threshold value on the retailer s risk aversion parameter below above which the manufacturer is better off with retailer rebates customer rebates implying that the manufacturer s preferred rebate type can be different depending on whether the retailer is risk neutral or sufficiently risk averse

the uk regional distribution of foreign direct investment analysis and determinants hill s and munday m 1992 the uk regional distribution of foreign direct investment analysis and determinants reg studies 26 535 544 this paper analyses the regional distribution of foreign direct investment fdi within the uk following an examination of those regions that have been successful in winning new inward investment the paper goes on to consider hypotheses that can be used to explain relative regional success in attracting new fdi projects and jobs empirical testing of these hypotheses suggests that both financial incentives and access to markets are important determinants of the regional distribution of new fdi projects and jobs hill c et munday m 1992 la distribution regionale de l investissement direct etranger au royaume uni analyse et determinants reg studies 26 535 544 cet article cherche a analyser la distribution regionale de l investissement direct etranger au sein du royaume uni suite a une examination des regions qui ont reussi a attirer de nouvel investissement

ethical investment processes and outcomes there is a growing body of literature on ethical or socially responsible investment across a range of disciplines this paper highlights the key themes in the field and identifies some of the major theoretical and practical challenges facing both scholars and practitioners one of these challenges is understanding better the complexity of the relationship between such investment practices and corporate behaviour noting that ethical investment is seldom characterised by agreement about what it actully constitutes and that much of the extant research focuses on a narrow set of issues the paper argues that there are benefits associated with examining ethical investment as a process

volume flexibility and capacity investment under demand uncertainty the paper considers optimal capacity investment decisions under uncertainty taking a real options approach concerning the production decision we study a flexible and an inflexible scenario the flexible firm can costlessly adjust production over time with the capacity level as the upper bound while the inflexible firm fixes production at capacity level from the moment of investment onwards we find that the flexible firm invests in higher capacity than the inflexible firm where the capacity difference increases with uncertainty for the flexible firm the initial capacity utilization rate can be quite low especially when investment costs are concave and the economic environment is uncertain as to the timing of the investment there are two contrary effects first the flexible firm has an incentive to invest earlier because flexibility raises the project value second the flexible firm has an incentive to invest later because costs are larger due to the higher capacity level the latter effect dominates in highly uncertain economic environments our model being dynamic enables us to derive the at first sight counterintuitive result that an increase in capacity holding cost raises the capacity level the firm invests in

capacity investment under postponement strategies market competition and demand uncertainty we consider duopoly models where firms make decisions on capacity production and price under demand uncertainty capacity and price decisions are made respectively ex ante and ex post demand realizations the interplay between the timings of demand realization and production decision endows firms with different capabilities flexible firms can postpone production decisions until the actual demand curve is observed but inflexible firms cannot under general demand structures and cost functions we characterize the equilibrium for a symmetric duopoly and establish the strategic equivalence of price and quantity competitions when firms are flexible we investigate the stochastic order properties of capacity and profit and show that they both increase for a flexible firm when the market is more volatile we find that flexibility allows a firm to increase investment in capacity and earn a higher profit while benefiting customers by keeping the price in a narrower range strategic equivalence implies that

flexible capacity strategy with multiple market periods under demand uncertainty and investment constraint abstract we establish a flexible capacity strategy model with multiple market periods under demand uncertainty and investment constraints in the model a firm makes its capacity decision under a financial budget constraint at the beginning of the planning horizon which embraces n market periods in each market period the firm goes through three decision making stages the safety production stage the additional production stage and the optimal sales stage we formulate the problem and obtain the optimal capacity the optimal safety production the optimal additional production and the optimal sales of each market period under different situations we find that there are two thresholds for the unit capacity cost when the capacity cost is very low the optimal capacity is determined by its financial budget when the capacity cost is very high the firm keeps its optimal capacity at its safety production level and when the cost is in between of the two thresholds the optimal capacity is determined by the capacity cost the number of market periods and the unit cost of additional production further we explore the endogenous safety production level we verify the conditions under which the firm has different optimal safety production levels finally we prove that the firm can benefit from the investment only when the designed planning horizon is longer than a threshold moreover we also derive the formulae for the above three thresholds

long run competition in capacity short run competition in price and the cournot model in this article we investigate the nature of equilibrium in markets in which firms choose the scale of operation before they make pricing decisions we analyze a duopoly model in which firms choose their capacities before engaging in bertrand like price competition we demonstrate that the cournot outcome is unlikely to emerge in such markets and that the equilibrium tends to be more competitive than the cournot model would predict in addition our results indicate a tendency toward asymmetric firm sizes and price dispersion that results from the mixed strategies firms use in equilibrium

the impact of foreign direct investment on uk manufacturing is there a profit squeeze in domestic firms this paper examines the extent to which foreign direct investment fdi in selected uk manufacturing sectors has an impact on reported profits in domestic firms foreign manufacturing firms are characterized by relatively high labour productivity and low wage shares entry by foreign firms not only impacts on domestic market shares but also on domestic cost conditions as a result profitability in the indigenous sector may be reduced there are a number of policy implications of this analysis which are explored

optimal production strategy under demand fluctuations technology versus capacity abstract this paper provides a comparative analysis of five possible production strategies for two kinds of flexibility investment namely flexible technology and flexible capacity under demand fluctuations each strategy is underpinned by a set of operations decisions on technology level capacity amount production quantity and pricing by evaluating each strategy we show how market uncertainty production cost structure operations timing and investment costing environment affect a firm s strategic decisions the results show that there is no sequential effect of the two flexibility investments we also illustrate the different ways in which flexible technology and flexible capacity affect a firm s profit under demand fluctuations the results reveal that compared to no flexibility investment flexible technology investment earns the same or a higher profit for a firm whereas flexible capacity investment can be beneficial or harmful to a firm s profit moreover we prove that higher flexibility does not guarantee more profit depending on the situation the optimal strategy can be any one of the five possible strategies we also provide the optimality conditions for each strategy

price and order postponement in a decentralized newsvendor model with multiplicative and price dependent demand we analyze the effect of price and order postponement in a decentralized newsvendor model with multiplicative and price dependent demand wherein the manufacturer sets the wholesale price and possibly offers a buyback rate and the retailer determines the order quantity and retail price such postponement strategies can be used by the retailer by delaying his operational decisions order quantity and retail price until after demand uncertainty is observed we show how the equilibrium values of the contract parameters and profits are affected by i vertical competition ii type of contract wholesale price only or buyback iii demand distribution iv form of the expected demand function and v the timing of the retailer s operational decisions although in most cases postponement is quite beneficial for the channel members we show that for some model parameters due to vertical competition the expected value of perfect information about demand for price postponement and order postponement may be negative for the channel and even surprisingly for both members we also show that when a buyback option is offered neither order postponement nor price postponement has an effect on the equilibrium wholesale price profit allocation ratio between the manufacturer and the retailer and channel efficiency and that the equilibrium wholesale price expected retail price profit allocation ratio between the manufacturer and the retailer and channel efficiency in the model with buyback options under either order or price postponement further coincide with their counterparts in the corresponding deterministic model

foreign direct investment in the uk regions recent trends and policy issues 1994 foreign direct investment in the uk regions recent trends and policy issues regional studies vol 28 no 8 pp 843 848

resource flexibility with responsive pricing this article studies two types of flexibility used by firms to better respond to uncertain market conditions resource flexibility and responsive pricing we consider a situation in which a single flexible resource can be used to satisfy two distinct demand classes while the resource capacity must be decided based on uncertain demand functions the resource allocation as well as the pricing decision are made based on the realized demand functions we characterize the effects of two key drivers of flexibility demand variability and demand correlation assuming normally distributed demand curve intercepts demand variability creates opportunity costs and with fixed prices decreases the firm s profit we show that with the additional flexibility gained from responsive pricing the firm can maximize the benefits of favorable demand conditions and mitigate the effects of poor demand conditions ultimately profiting from variability positive demand correlation on the other hand remains undesirable under responsive pricing the optimal capacity of the flexible resource is always increasing in both demand variability and demand correlation this contrasts with the scenarios based on fixed prices highlighting the crucial difference that responsive pricing makes in the management of flexible resources we further quantify the value of flexibility for the firm and its customers by considering as a benchmark a firm relying on two dedicated resources the value of flexibility is most significant if the demand levels are highly variable and negatively correlated in such cases the firm benefits from demand variability due to responsive pricing while facing limited demand risk due to resource flexibility finally we endogenize the input price of the flexible resource by considering the pricing decision of the resource supplier

financial management in inventory problems risk averse vs risk neutral policies abstract in this work we discuss the effect of risk measure selection in the determination of inventory policies we consider an inventory system characterized by the loss function of luciano et al 2003 var as a risk measure for multi period static inventory models international journal of production economics 81 82 375 384 we derive the optimization problems faced by risk neutral quadratic utility mean absolute and cvar decision makers results show that while the global nature of the optimal policy is assured for risk coherent and risk neutral decision makers the convexity of the quadratic utility problem depends on the stochastic properties of demand we investigate the economic and stochastic determinants of the different policies this allows us to establish the conditions under which each type of decision maker is indifferent to imprecision in the distribution families finally we discuss the numerical impact of the choice of the risk measure by means of a multi item inventory the introduction of an approach based on savage scores allows us to offer a quantitative measurement of the similarity discrepancy of policies reflecting different risk attitudes

reducing the cost of demand uncertainty through accurate response to early sales traditionally fashion products have incurred high losses due to stockouts and inventory obsolence because long lead times coupled with a concentrated selling season force all or at least most production to be committed before demand information is available under a quick response system lead times are shortened sufficiently to allow a greater portion of production to be scheduled in response to initial demand we model and analyze the decisions required under quick response and give a method for estimating the demand probability distributions needed in our model we applied these procedures with a major fashion skiwear firm and found that cost relative to the current informal response system was reduced by enough to increase profits by 60 relative to the cost that would have been incurred if no response were used optimized response reduces cost by enough to roughly quadruple profits

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

newsvendor solutions via conditional value at risk minimization abstract in this paper we consider the minimization of the conditional value at risk cvar a most preferable risk measure in financial risk management in the context of the well known single period newsvendor problem which is originally formulated as the maximization of the expected profit or the minimization of the expected cost we show that downside risk measures including the cvar are tractable in the problem due to their convexity and consequently under mild assumptions on the probability distribution of products demand we provide analytical solutions or linear programming lp formulation of the minimization of the cvar measures defined with two different loss functions numerical examples are also exhibited clarifying the difference among the models analyzed in this paper and demonstrating the efficiency of the lp solutions

a multi item newsvendor problem with preseason production and capacitated reactive production abstract given items with short life cycles or seasonal demands one can potentially improve profits by producing during the selling season especially when its production capacity is substantial we develop a two stage multi item model incorporating reactive production that employs a firm s internal capacity production occurs in an uncapacitated preseason stage and a capacitated reactive stage demands occur in the reactive stage reactive capacities are pre allocated to each item in the preseason stage and cannot be changed during the reactive stage reactive production occurs during the selling season with full knowledge of demands the objective is expected profit maximization unsatisfied demand is lost the revenue salvage value and production and lost sales costs are proportional assuming no fixed costs we present a simple algorithm for computing optimal policies for a model with fixed costs for allocating preseason stage production and reactive stage capacity to product families we characterize optimal policies and develop optimal and heuristic algorithms

investment with a conscience examining the impact of pro social attitudes and perceived financial performance on socially responsible investment behavior this article addresses the growing industry of retail socially responsible investment sri profiled mutual funds very few previous studies have examined the final consumer of sri profiled mutual funds therefore the purpose of this study was to in an exploratory manner examine the impact of a number of pro social financial performance and socio demographic variables on sri behavior in order to explain why investors choose to invest different proportions of their investment portfolio in sri profiled funds an ordinal logistic regression analysis on 528 private investors revealed that two of the three pro social variables had a positive impact on how much the consumer invested in sri profiled funds moreover there was proof of a non altruistic motive for investing in sri as consumers who perceive that financial return of sri is equal or better than regular mutual funds invested a greater proportion of their portfolio in sri profiled mutual funds furthermore the results showed that women and better educated investors were more likely to invest a greater proportion of their investment portfolio in sri overall the findings indicate that both financial perceptions and pro social attitudes are connected to consumer investment in sri

integrated operational and financial hedging with capacity reshoring abstract we consider a multinational corporation that employs capacity reshoring production switching and financial hedging to manage supply demand mismatches and currency risk we optimize mean conditional value at risk cvar by decomposing operations and finance operational flexibility maximizes expected profit subject to a cvar constraint whereas financial hedging minimizes cvar subject to a minimum expected profit we report three main findings first operational flexibility and financial hedging can be complements operational flexibility enhances profitability and reduces downside risk while financial hedging minimizes downside risk and can affect the feasible set of capacity portfolios albeit indirectly by relaxing a cvar constraint second operational flexibility and financial hedging are substitutes in risk reduction though the latter has greater risk reduction effects in cvar when used alone third coordinating operations and finance is crucial for minimizing substitution effects efficient financial hedging depends on rigorous estimation of cash flow distribution as shaped by operational flexibility and a capacity portfolio s feasibility relies on financial hedging because of the cvar constraint

the risk averse and prudent newsboy the effects of risk and risk aversion in the single period inventory newsboy problem are examined comparative static effects of changes in the various price and cost parameters are determined and related to the newsboy s risk aversion the addition of a random background wealth and of an increase in the riskiness of newspaper demand are also examined although many of the comparative effects generally are ambiguous some fairly simple restrictions on preferences and or risk increases are shown to lead to qualitatively deterministic results

the existence of equilibrium in discontinuous economic games ii applications in part i of this study we established two existence theorems for mixed strategy equilibrium in games with discontinuous payoff functions see theorems 4 4 and 5 5 in dasgupta and maskin 1986 hereafter d m 1986 in this second part we use the second of these two theorems to prove the existence of mixed strategy equilibrium in some wellknown discontinuous economic games that fail to have pure strategy equilibria the models we analyse are the bertrand edgeworth example of price setting duopolists with capacity constraints see section 2 2 price competition among firms producing differentiated products hotelling 1929 and d aspremont gabszewicz and thisse 1979 see section 2 3 spatial competition eaton and lipsey 1975 and shaked 1975 see section 3 and models of market dependent information rothschild and stiglitz 1976 and wilson 1977 section 4 the paper concludes section 5 with a classification of these models

revenue sharing and vertical control in the video rental industry revenue sharing contracts in which retailers pay a royalty on sales to their suppliers are now widely used in the video rental industry we show that revenue sharing is valuable in vertically separated industries in which demand is either stochastic unpredictable or variable e g systematically declining downstream inventory is chosen before demand is realized and downstream firms engage in intrabrand competition unlike two part tariffs revenue sharing achieves the first best outcome by softening retail price competition without distorting retailers inventory decisions our theories are also consistent with trends in prices and availability following retailers adoption of revenue sharing contracts

speculative production and anticipative reservation of reactive capacity by a multi product newsvendor in this paper the optimal sourcing decisions of a multi product newsvendor prior to the selling season of the products are studied to satisfy the uncertain demands the newsvendor can either utilize speculative production or anticipatively reserve capacity during the selling season when demand has become known the newsvendor can utilize its reserved capacity and reactively satisfy demand uncovered by its speculative production for the case where capacity for speculative production may be limited but potential reservation of reactive capacity is unlimited two capacity reservation settings are analyzed and compared in the first one capacity for each product has to be reserved separately while in the second setting one joint capacity reservation for all products is permitted which can then be allocated to the different products optimally during the selling season for the case of separate individual reservations the optimal strategies are analytically derived and structural insights concerning their existence are presented as the model allowing for joint reservation can not be tackled analytically in general an approximation based on an lp formulation is used through a numerical example insights on the value of the increased flexibility induced by joint reservation the cost premium acceptable for joint reservation and the relative levels of capacity reservation in the two settings are given

inward investment in the uk and the single european market the impact of completing the single european market sem on the economies ofthe member states is predicted as a combination of economies of scale and greater competition cecchini1 988 in spatial terms this implies a reallocation of resources to exploit the comparative advantage of different regions and countries for the problem regions especially those on the periphery of europe the integration process could lead to a variety of adverse sectoral and regional consequences the effect of greater competition for example may reduce indigenous sectoral strengths and diversity and increase external control the emergence or strengthening of agglomeration tendencies in core regions may lead to a growing centralization of investment and decision making

modified critical fractile approach for a class of partial postponement problems abstract this paper studies a single period partial postponement problem which is motivated by an inventory planning problem encountered in reebok nfl replica jersey supply chain we consider a group of regular products each facing a random demand there are two stocking options one is to procure the regular products the other is to stock a common component which can be customized later to any one of the regular products after demand realization we obtain an insightful interpretation of the optimality conditions for this class of problems and use it to obtain rules of thumb that practitioners can incorporate into their inventory models to determine the stocking levels to minimize the supply chain cost instead of proposing a numerical procedure to obtain the optimal solution we propose an adaptation of the classical critical fractile approach for this class of partial postponement problem the closed form formula obtained are surprisingly effective our numerical results suggest that this simple approach to inventory planning often comes close to the performance of the optimal solution obtained from numerical method

the risk averse newsvendor problem with random capacity abstract we study the effect of capacity uncertainty on the inventory decisions of a risk averse newsvendor we consider two well known risk criteria namely value at risk var included as a constraint and conditional value at risk cvar for the risk neutral newsvendor we find that the optimal order quantity is not affected by the capacity uncertainty however this result does not hold for the risk averse newsvendor problem specifically we find that capacity uncertainty decreases the order quantity under the cvar criterion under the var constraint capacity uncertainty leads to an order decrease for low confidence levels but to an order increase for high confidence levels this implies that the risk criterion should be carefully selected as it has an important effect on inventory decisions this is shown for the newsvendor problem but is also likely to hold for other inventory control problems that future research can address

manufacturer s return policy in a two stage supply chain with two risk averse retailers and random demand abstract this paper studies the manufacturer s return policy and the retailers decisions in a supply chain consisting of one manufacturer and two risk averse retailers under a single period setting with price sensitive random demand we characterize each retailer s risk embedded objective via conditional value at risk and construct manufacturer stackelberg games with and without horizontal price competition between the retailers we explore through numerical studies the effects of the retailers aversion to risk and other parameters on the manufacturer s return policy and profit and the retailers decisions we further investigate the effect of distribution asymmetry by comparing the results with normal and lognormal demand

effects of higher order moments on the newsvendor problem abstract in this paper we propose a stochastic programming model for the well known single period newsvendor problem by adopting the conditional value at risk cvar as the risk metric in the objective function the demand uncertainty is modeled in terms of discrete scenarios that reflect the empirical distributions implied by market demand data our numerical results demonstrate that the higher order moments skewness and kurtosis of demand have obvious effects on the newsvendor problem and the stochastic programming framework provides a flexible and effective decision support tool for the newsvendor problem

bertrand edgeworth competition demand uncertainty and asymmetric outcomes abstract we analyze investment and pricing incentives in a symmetric bertrand edgeworth framework with uncertain demand firms choose production capacities before observing demand prices are chosen after demand is observed if the extent of demand variation exceeds a threshold level then a symmetric equilibrium in pure strategies for capacities does not exist a smaller firm has no incentive ex ante to expand its capacity because capacity expansion would reduce its expected revenue in the event that demand is lower than expected output prices are predicted to have positive variance when demand is low and zero variance when demand is high journal of economic literature classification numbers d43 l13

the determinants of inward investment a welsh analysis inward foreign direct investment is becoming increasingly important to the uk economy and the regions this paper examines the motivation behind inward investment into the uk generally before considering the success of wales in attracting relatively high levels of new inward investment during the eighties the paper then examines key factors which influence foreign direct investment into wales and the associated policy implications

a comparison of models describing the impact of moral decision making on investment decisions as moral decision making in financial markets incorporates moral considerations into investment decisions some rational decision theorists argue that moral considerations would introduce inefficiency to investment decisions however market demand for socially responsible investment is increasing suggesting that investment decisions are influenced by both financial and moral considerations several models can be applied to explain moral behavior we test the suitability of a multiple attribute utility theory maut b theory of planned behavior and c issue contingent model of ethical decision making in organizations in an experimental setting 141 participants traded company shares in a computerized asset market over 12 periods companies varied in morality i e treatment of employees and in profitability i e expected dividends per share participants bids and asks for shares were recorded results indicate that moral considerations influence investment decisions controlling for profit differences between the three models are discussed

investing in peace the motivational dynamics of diaspora investment in post conflict economies post conflict economies often prove daunting for foreign investors many of these nations are reaching out to diasporans emigrants and their descendants living abroad for much needed foreign investment capital little is known about why diasporans invest in their countries of origin recent scholarly inquiry regarding investment decision making has suggested that non pecuniary psychological concerns often motivate investment decisions we develop a conceptual model identifying three types of investment return expectations financial emotional and those related to social status that may drive diaspora investment interest we contend that the psychological realities and social status structure of the diaspora experience generate greater salience for non pecuniary investment motivations particularly when the origin country emerges from a period of conflict we outline an agenda for future research and discuss the implications of our model for policies seeking to promote peace utilizing diaspora investment

accurate response by postponement abstract accurate response and postponement are two strategies for a firm to deal with demand uncertainty and better match supply with demand under accurate response reactive capacity could be used for customized make to order mto production according to customer demands on the other hand using postponement a firm could perform the non postponed activities speculatively and use reactive capacity only to customize the final product thereby enhancing the profitability of accurate response surprisingly existing research in the areas of accurate response and postponement does not address this potential in this paper we aim to fill this gap by proposing a stylized model for accurate response by postponement specifically we analyze a situation where a manufacturer is faced with uncertain demand for a product during a short selling season the manufacturer has three supply options first it can manufacture and offer a standardized version of the product second it can use postponement by manufacturing a standard component speculatively and customizing it once demands are revealed at the beginning of the selling season third it can produce customized products in a pure make to order fashion during the selling season this situation is modeled as an extension of a newsvendor problem our main research question is then to analyze specifically under which conditions postponement is part of the optimal supply strategy and more generally what kinds of supply strategies will arise in different model settings

competitive capacity expansion under demand uncertainty abstract we analyze the capacity expansion behavior of firms in a duopoly faced with an uncertain new market the market demand may be high or low with a given probability mass function firms obtain private information about the market size and build their capacity before the market demand is known once the demand is revealed firms enter a capacity constrained price competition phase which determines their revenues two scenarios are considered first when firms choose their capacities simultaneously in the investment phase and second when they do so sequentially for each case we determine the unique symmetric nash equilibrium excess capacity can occur in equilibrium in the industry it is seen that preempting the competitor in the capacity expansion phase offers first mover benefits we argue that the sequential moves game is more prone to equilibrium excess capacity compared to the simultaneous case we show that preemption is a good strategy if the investing environment is either highly optimistic or highly pessimistic if the industry outlook is only moderately optimistic a capacity planner is still better off preempting his competitor however the industry may encounter overcapacity as a consequence

a postponement model for demand management in this paper we analyze demand postponement as a strategy to handle potential demand surges under demand postponement a fraction of the demands from the regular period are postponed and satisfied during a postponement period this permits capacity to be procured to satisfy the postponed demands a reimbursement per unit is paid to customers whose demands are postponed the basic idea is that by preempting stockouts through demand postponement we can reduce overall stockout costs we formulate and solve a two stage capacity planning problem under demand postponement we propose a power range class of distributions to capture the nature of demand surges we establish the scalability and conjugate properties of the power range distributions under demand postponement which leads to a tractable analysis of the problem we analytically solve the problem of determining the optimal regular and postponement period capacities and the demand splitting rule to minimize the supplier s expected cost we show that a the value of postponement may be significant depending on cost and demand parameters b a postponement strategy may lead to reduced investment in initial capacity and c it may be optimal to do no demand postponement over a range of demands even after observing a higher demand signal we then relax several model assumptions and provide results for these extensions we conclude with managerial insights

the strategic perils of delayed differentiation the value of delayed differentiation also known as postponement for a monopolist has been extensively studied in the operations literature we analyze the case of imperfectly competitive markets with demand uncertainty wherein the choice of supply chain configuration i e early or delayed differentiation is endogenous to the competing firms we characterize firms choices in equilibrium and analyze the effects of these choices on quantities sold profits consumer surplus and welfare we demonstrate that purely strategic considerations not previously identified in the literature play a pivotal role in determining the value of delayed differentiation in the face of either entry threats or competition these strategic effects can significantly diminish the value of delayed differentiation in fact under plausible conditions these effects dominate the traditional risk pooling benefits associated with delayed differentiation in which case early differentiation is the dominant strategy for firms even under cost parity with delayed differentiation we extend the main model to study the effects of alternate market structures asymmetric markets and inventory holdback our results in particular that for a broad range of parameter values early differentiation is a dominant strategy even under cost parity with delayed differentiation are robust to these relaxations

demand uncertainty and price maintenance markdowns as destructive competition this paper offers a new theory of destructive competition the authors compare minimum resale price maintenance to retail market clearing in a model with a monopolistic manufacturer selling to competitive retailers in both the resale price maintenance and flexible price games retailers must order inventories before the realization of demand uncertainty the authors find that manufacturer profits and equilibrium inventories are higher under resale price maintenance than under market clearing surprisingly consumer surplus can also be higher in which case unfettered retail competition can legitimately be called destructive copyright 1997 by american economic association

turning water into wine exploring the role of dynamic capabilities in early stage capitalization processes technology based ventures face considerable challenges when attempting to raise early stage capital during the early stages of development to create an operational business they need access to financial capital but external investors prefer to see an operational business before investing capital this study extends arguments grounded in dynamic managerial capabilities theory to examine the extent to which various trade offs among the quality of a venture s management team radicalness of the firm s technological resources and demand uncertainty in focal markets impact the ability of ventures to resolve these capitalization challenges we find that higher levels of demand uncertainty and more radical innovations do not appear to enhance the impact of strong management teams on the raising of early stage capital however lower levels of uncertainty do appear to strengthen the effects of strong management teams implications of these findings for dynamic capabilities theory and early stage capitalization processes are discussed

the existence of equilibrium in discontinuous economic games i theory the article presents information about the existence of equilibrium in discontinuous economic games in this paper and its sequel presents study the existence of nash equilibrium in games where agents payoff functions are discontinuous the enquiry is motivated by a number of recent studies that have uncovered serious existence problems in seemingly innocuous economic games in the sequel to this paper authors have explained the utility function in the economic games referred to earlier are neither continuous nor quasi concave however they demonstrate that the payoff functions in mildly modified versions of these constructs exhibit two weaker forms of continuity which together with the requirement of quasi concavity suffice for the existence of an equilibrium from this one may conclude that at least in the modified versions of these models discontinuities in the payoff functions are not the real source of the problem rather it is the failure of the payoff functions to the quasi concave which is responsible for the non existence of equilibrium these observations bear on the existence of nash equilibrium in pure strategies

capacity investment under uncertainty the effect of volume flexibility abstract real option theory is a central tool in today s investment theory as it integrates uncertainty and managerial flexibility in the analysis and valuation of investment projects this paper studies the optimal time and size of investment for a monopolistic firm under demand uncertainty and volume flexibility in our modeling framework demand is random and the firm first decides the optimal time and size of the production process after entry the firm adjusts continuously production volume to match the observed demand volume flexibility comes at a cost which depends on both the current output and the established capacity we study two different models of volume flexibility downside volume flexibility allows the firms to produce any quantity below the installed capacity upside volume flexibility allows to expand production above the firm s capacity size in both cases the option to temporary suspend production is not given a priori but it is part of the firm s optimal choice with this feature the model provides conclusions that contrast some of the most recent theoretical findings on the same subject we find that an increase of the degree of downside volume flexibility makes the firm willing to invest earlier in a larger plant we also show that downside volume flexibility reduces the utilization rates especially in highly uncertain markets upside volume flexibility has the joint effect of reducing the size of the investment and the investment threshold at which the firm installs capacity the utilization rates are significantly higher compared to the case of downside volume flexibility only and there is an increasing relationship between increased upside flexibility and utilization rates

coping with risk management and fill rate in the loss averse newsvendor model abstract in this paper we introduce the cvar conditional value at risk measure to hedge against the risks for the loss averse newsvendor we derive the optimal order quantities for the loss averse newsvendor to maximize the cvar objective of utility with and without the shortage cost respectively it is shown that when shortage cost is not considered an increase in the degree of loss aversion leads to a decrease in the fill rate therefore the newsvendor should strike a balance between the two conflicting targets in selecting the optimal order quantity when the shortage cost is taken into account and sufficiently large it is proved that an increase in the degree of loss aversion leads to an increase in the fill rate to manage both of the two targets the newsvendor should order more items in this case our sensitivity analysis further verifies that high risk implies high return and low risk comes with low return based on the analysis some management insights for the risk management of the loss averse newsvendor are presented

optimal decisions for the loss averse newsvendor problem under cvar abstract most of the existing literature about the newsvendor problem mainly focused on choosing an optimal order quantity to maximize the expected profit of a risk neutral newsvendor however some studies pointed out that in practice managers decisions as to order quantities always deviate from the profit maximization order quantity which is referred to as decision bias in the newsvendor problem then many studies introduced other preferences rather than risk neutrality of the newsvendor to explain such a decision bias this paper thus introduces loss aversion to the research of the newsvendor decision bias we propose a new definition to the loss averse newsvendor problem legacy loss which is defined either as the loss for excess order or the shortage penalty for lost sales when sales time is due the optimal decisions of a loss averse newsvendor are obtained through the following three ways i minimizing the expected legacy loss ii minimizing cvar of legacy loss by combining the cvar measure in risk management iii minimizing the combination of expected legacy loss and cvar of legacy loss and are compared with other existing results besides we present some properties of the optimal decisions as well as relations among them some numerical examples are given to illustrate the obtained results

strategic technology choice and capacity investment under demand uncertainty this paper studies the impact of competition on a firm s choice of technology product flexible or product dedicated and capacity investment decisions specifically we model two firms competing with each other in two markets characterized by price dependent and uncertain demand the firms make three decisions in the following sequence choice of technology technology game capacity investment capacity game and production quantities production game the technology and capacity games occur while the demand curve is still uncertain and the production game is postponed until after the demand curve is revealed we develop best response functions for each firm in the technology game and compare how a monopolist and a duopolist respond to a given flexibility premium we show that the firms may respond to competition by adopting a technology which is the same as or different from what the competitor adopts we conclude that contrary to popular belief flexibility is not always the best response to competition flexible and dedicated technologies may coexist in equilibrium we demonstrate that as the difference between the two market sizes increases a duopolist is willing to pay less for flexible technology whereas the decision of a monopolist is not affected further we find that a firm that invests in flexibility benefits from a low correlation between demands for two products but the extent of this benefit differs depending on the competitor s technology choice our results indicate that higher demand substitution may or may not promote the adoption of flexibility under competition whereas it always facilitates the adoption of flexibility without competition finally we show that contrary to intuition as the competitor s cost of capacity increases the premium a flexible firm is willing to pay for flexibility decreases

dedicated vs product flexible production technology strategic capacity investment choice this paper studies the optimal investment strategies of an incumbent and a potential entrant that can both choose between a product flexible and dedicated technology in a two product market characterized by uncertain demand the product flexible production technology has certain advantages especially when the economic environment is uncertain on the other hand the dedicated production technology allows a firm to commit to production quantities this gives strategic advantages which can outweigh the value of flexibility it turns out that both firms prefer for some scenarios the dedicated production technology however we find that in a game with sequential technology choices both firms investing dedicated will not be an equilibrium especially when the economic environment is more uncertain the incumbent overinvests in product flexible capacity to force the entrant to choose the dedicated technology then the incumbent is the only firm with the product flexible production technology which results in a high payoff

diaspora interest in homeland investment this paper examines four diaspora communities resident in the united states that were targeted by their homelands as foreign investors during the 1990s the homelands comprise armenia cuba iran and palestine we pose the question what are the determinants of interest in homeland investment and can they be generalized across the four communities the paper explores concepts of ethnic advantage altruism homeland orientation and perceptions of business impediments as well as investigating the role of demographic factors regarding investment interest

the location of early overseas multinationals in britain 1900 1939 patterns and determinants scott p 1998 the location of early overseas multinationals in britain 1900 1939 patterns and determinants reg studies 32 489 501 this paper examines the location patterns of early overseas multinationals in britain over the period 1900 1939 together with the factors influencing their location the london conurbation is shown to have attracted the majority of early multinationals with significant long term consequences for british regional development the key attractions of london were its strong market links industrial estate facilities and particularly road transport infrastructure cheaper labour in britain s provincial regions did not generally prove a significant attraction to foreign firms due to their heavy reliance on female and juvenile labour and the ample supply of such labour in greater london scott p 1998 la localisation des premieres multinationales etrangeres situees en grande bretagne de 1900 a 1939 distributions et determinants reg studies 32 489 501 cet article che

optimal capacity for substitutable products under operational postponement abstract we consider a monopolist producing two substitutable products with one flexible shared capacity the demand of each product is a linear function of the prices of both products and is subject to an additive shock we study the impact of two key drivers namely the degree of substitution between the products and the level of operational postponement on the optimal capacity and the resulting expected profit we show that the relationship between the optimal capacity and the degree of product substitution is not impacted by the different postponement strategies the firm can utilize or by the different settings forced clearance versus holdback considered in the previous literature on the other hand how capacity is affected by postponement critically depends on how closely substitutable the products are in particular we show that the well known result that operational postponement and capacity are strategic complements in a single product setting van mieghem and dada 1999 no longer holds in our setting because the two substitutable products are now linked through consumer driven substitution which the firm can influence through pricing in particular capacity and operational postponement in the form of quantity postponement can be either strategic substitutes or strategic complements and this depends on both the firm s cost structure and the degree of substitution between the products we also study the impact of forced clearance on the firm s expected profit and find that clearance deteriorates the firm s earnings more when the products it offers are highly differentiated

developing countries and mnes extending and enriching the research agenda foreign direct investment fdi through multinational enterprises mnes has emerged in the last decade as the principal source of foreign capital for developing countries meyer this issue underlines the need for international business ib scholars to understand the impact of these investments on host developing countries he offers a useful assessment of the literature and proposes a rich set of questions for further research however his research agenda can be extended and enriched in two ways first ib scholars must study as they always have causation in the opposite direction namely the impact of developing country context on mne behavior and the co evolution of these two variables over time in doing so they must incorporate into their models contemporary issues such as the continued inadequacy of rules for fdi in infrastructure sectors or the clever means by which mnes are rewriting the global rules under which they operate in developing countries e g on intellectual property rights second ib scholars must pay more attention to topics that are not mainstream within the field but are of great importance to developing countries examples include the behavior and performance of a new generation of home grown mnes the role of diaspora in homeland fdi in countries like china and india and the implications of global outsourcing of services

global facility network design in the presence of competition abstract we study the facility network design problem for a global firm that is a monopolist seller in its domestic market but faces local competition in its foreign market the global firm produces in the face of demand and exchange rate uncertainty but can postpone localization and distribution of the output until after uncertainties are resolved the competitor in the foreign market however enjoys the flexibility of postponing all production activities until after uncertainties are resolved the two firms engage in an ex post cournot competition in the foreign market we consider three potential network configurations for the global firm under a linear demand function we provide the necessary and sufficient condition that one of the three networks is the global firm s optimal choice and explore how the presence of foreign competition affects the sensitivity of the global firm s design to various cost parameters and market uncertainties

a risk averse competitive newsvendor problem under the cvar criterion abstract we study a risk averse newsvendor problem with quantity competition and price competition under the conditional value at risk cvar criterion we characterize the optimal quantity and pricing decisions under both quantity and price competition for quantity competition we consider two demand splitting rules namely proportional demand allocation and demand reallocation although competition always leads to overstocking interestingly it does not necessarily lead to a profit loss in certain competitive environments such as demand reallocation by avoiding reducing overstocking that results from competition under the risk neutral criterion for price competition we consider both additive and multiplicative demand we find that the order quantity sale price and the expected profit decrease in the degree of risk aversion further both high price sensitivity and competition intensity force decision makers to lower their prices however high price sensitivity always reduces the order quantity while competition can have the opposite effect

competition through capacity investment under asymmetric existing capacities and costs this paper discusses the way that different operational characteristics including existing capacity scale economies and production policy have an important influence on the capacity outcomes when firms compete in the market place we formulate a game theoretical model where each firm has an existing capacity and faces both fixed and variable costs in purchasing additional capacity specifically the firms simultaneously or sequentially make their expansion decisions and then simultaneously decide their production decisions with these outputs being capacity constrained we also compare our results with cases where production has to match capacity by characterizing the firms capacity and production choices in equilibrium our analysis shows that the operational factors play a crucial role in determining what happens the modeling and analysis in the paper gives insight into the way that the ability to use less production capacity than has been built will undermine the commitment value of existing capacity if a commitment to full production is not possible sinking operational costs can enable a firm to keep some preemptive advantage we also show that the existence of fixed costs can introduce cases where there are either no pure strategy equilibrium or multiple equilibria the managerial implications of our analysis are noted in the discussion our central contribution in this paper is the innovative integration of the strategic analysis of capacity expansion and well known s s policy in operations and supply chain theory

asymmetry and ambiguity in newsvendor models a basic assumption of the classical newsvendor model is that the probability distribution of the random demand is known but in most realistic settings only partial distribution information is available or reliably estimated the distributionally robust newsvendor model is often used in this case where the worst case expected profit is maximized over the set of distributions satisfying the known information which is usually the mean and covariance of demands however covariance does not capture information on asymmetry of the demand distribution in this paper we introduce a measure of distribution asymmetry using second order partitioned statistics semivariance is a special case with a single partition of the univariate demand with mean variance and semivariance information we show that a three point distribution achieves the worst case expected profit and derive a closed form expression for the distributionally robust order quantity for multivariate demand the distributionally robust problem

a note on probability distributions with increasing generalized failure rates distributions with an increasing generalized failure rate igfr have useful applications in pricing and supply chain contracting problems we provide alternative characterizations of the igfr property that lead to simplify verifying whether the igfr condition holds we also relate the limit of the generalized failure rate and the moments of a distribution

capacity investment timing by start ups and established firms in new markets we analyze the competitive capacity investment timing decisions of both established firms and start ups entering new markets which have a high degree of demand uncertainty firms may invest in capacity early when uncertainty is high or late when uncertainty has been resolved possibly at different costs established firms choose an investment timing and capacity level to maximize expected profits whereas start ups make those choices to maximize the probability of survival when a start up competes against an established firm we find that when demand uncertainty is high and costs do not decline too severely over time the start up takes a leadership role and invests first in capacity whereas the established firm follows by contrast when two established firms compete in an otherwise identical game both firms invest late we conclude that the threat of firm failure significantly impacts the dynamics of competition involving start ups this paper was accepted by yossi aviv operations management

a risk tolerance analysis for a joint price differentiation and inventory decisions problem with demand leakage effect abstract price differentiation is a commonly used practice in revenue management rm to improve a firm s profitability however most studies in the literature have considered a risk neutral firm to demonstrate the benefits of price differentiation the main contribution of this paper is in considering several important objectives while determining the optimal product prices and order production quantities for a risk adjusted firm with demand leakage effects in the presence of a price dependent stochastic demand the objectives considered include the maximization of a firm s expected profit and maximizing the probability of exceeding the risk adjusted expected revenue closed form expressions for optimal product prices and production quantities are derived for several of these objectives a numerical study is also presented to calibrate the impact of a firm s risk tolerance and other factors such as demand leakage market demand variability on the firm s profitability and its optimal decision

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

new product introduction and capacity investment by incumbents effects of size on strategy we analyze a duopoly where capacity constrained firms offer an established product and have the option to offer an additional new and differentiated product we show that the firm with the smaller capacity on the established market has a higher incentive to innovate and reaches a larger market share on the market for the new product an increase in capacity of the larger firm can prevent its competitor from innovating whereas an increase in capacity of the smaller firm cannot prevent innovation of its larger competitor in equilibrium the firm with smaller capacity on the established market might outperform the larger firm with respect to total payoffs

price versus production postponement capacity and competition this article presents a comparative analysis of possible postponement strategies in a two stage decision model where firms make three decisions capacity investment production inventory quantity and price typically investments are made while the demand curve is uncertain the strategies differ in the timing of the operational decisions relative to the realization of uncertainty we show how competition uncertainty and the timing of operational decisions influence the strategic investment decision of the firm and its value in contrast to production postponement price postponement makes the investment and production inventory decisions relatively insensitive to uncertainty this suggests that managers can make optimal capacity decisions by deterministic reasoning if they have some price flexibility under price postponement additional postponement of production has relatively small incremental value therefore it may be worthwhile to consider flexible ex post pricing before production postponement reengineering while more postponement increases firm value it is counterintuitive that this also makes the optimal capacity decision more sensitive to uncertainty we highlight the different impact of more timely information which leads to higher investment and inventories and of reduced demand uncertainty which decreases investment and inventories our analysis suggests appropriateness conditions for simple make to stock and make to order strategies we also present technical sufficiency and uniqueness conditions under price postponement these results extend to oligopolistic and perfect competition for which pure equilibria are derived interestingly the relative value of operational postponement techniques seems to increase as the industry becomes more competitive

a risk averse newsvendor model under marketing dependency and price dependency abstract in this paper we analyze a single period inventory model where a risk averse newsvendor makes a joint decision on ordering pricing and marketing under the cvar risk measure criterion the newsvendor can exert marketing effort to enhance market demand we assume that the newsvendor s marketing effort affects the scale of the demand distribution and hence to model the marketing dependent demand as a multiplicative form we characterize sufficient conditions that guarantee existence and uniqueness of the optimal solutions under some mild assumptions on demand distribution expected demand function and marketing effort cost which are widely used in the related literature we show that the optimal order quantity increases in the newsvendor s marketing effort but the optimal price remains unchanged whether the demand is marketing dependent or not additionally we explore impact of exogenous parameters such as unit order cost salvage value and the newsvendor s risk aversion coefficient on the optimal decision variables and find that the optimal marketing effort always keeps the same changing direction with the optimal marketing independent order quantity as the exogenous parameters change this suggests that impact of the parameters on the optimal order quantity gets strengthened in the case of marketing dependent demand

risk pooling through physical probabilistic selling abstract this paper investigates the impacts of a new type of probabilistic selling p s where the retailer orders specific products and package some as a discounted physical probabilistic product ppp rather than merely a virtual choice we call this p s strategy as physical probabilistic selling p p s the price gap between the specific products and the probabilistic product results in demand reshape i e some customers who originally buy specific products will switch to buying the probabilistic product which decreases aggregate demand uncertainty however the price discount decreases the profit margin considering this trade off we develop a three product newsvendor model to address the question of how to set the price for the ppp and make inventory allocation decisions we prove that there are two effects under p p s namely the risk pooling effect due to demand reshape and the risk diversification effect due to inventory flexibility with demand uncertainty p p s can improve the retailer s profit at lower inventory levels with proper demand reshape induced by the optimal price discount p p s is more profitable with smaller product differentiation higher customer price sensitivity higher demand uncertainty and lower package cost with supply uncertainty we demonstrate through numerical studies that p p s is a viable strategy to combat asymmetrical supply risk that yields higher profits and service levels

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

an analysis of the factors determining the geographical distribution of japanese manufacturing investment in the uk 1984 91 the purpose of this paper is to discover which factors have been important in determining the geographical distribution of japanese manufacturing establishments in the uk during 1984 91 a multivariate statistical analysis is undertaken based on the poisson model to investigate the inter county variation in the number of establishments locating in each uk county during two separate time periods 1984 88 and 1989 91 in addition to examining the influence of variables such as labour costs labour availability and industry mix on the locational choice of japanese firms the statistical analysis attempts to capture the influence of regional policy multivariate regression analysis reveals that the geographical distribution of japanese owned investment in the uk is only statistically associated with a small number of variables the main explanatory variable in the model is whether an area had assisted area status other key explanatory variables are those reflecting an area s industry mix

risk analysis with contractual default does covenant breach matter abstract mergers and acquisitions m a private equity and leveraged buyouts securitization and project finance are characterized by the presence of contractual clauses covenants these covenants trigger the technical default of the borrower even in the absence of insolvency therefore borrowers may default on loans even when they have sufficient available cash to repay outstanding debt this condition is not captured by the net present value npv distribution obtained through a standard monte carlo simulation in this paper we present a methodology for including the consequences of covenant breach in a monte carlo simulation extending traditional risk analysis in investment planning we introduce a conceptual framework for modeling technical and material breaches from the standpoint of both lenders and shareholders we apply this framework to a real case study concerning the project financing of a 64 million euro biomass power plant the simulation is carried out on the actual model developed by the financial advisor of the project and made available to the authors results show that both technical and material breaches have a statistically significant impact on the net present value distribution and this impact is more relevant when leverage and cost of debt increase

technology investment under flexible capacity strategy with demand uncertainty abstract this paper investigates technology investment under flexible capacity strategy with demand uncertainty technology investment enables a firm to reduce its total production cost while flexible capacity strategy aims to reduce a firm s production waste by postponing production until demand is known adopting a general technology investment cost we examine how technology investment cost structure affects a firm s technology investment decisions we derive the conditions under which the firm will benefit from technology investment we show that the firm can increase its expected profit through technology investment only when the unit technology investment cost that varies inversely with the basic technology level is below a threshold however even though the technology investment cost is zero the benefit from the increase in technology level is limited furthermore we analytically determine the optimal technology levels and establish their relationships under different technology investment cost structures our findings will help firms evaluate various technology investment options and choose the most proper one