the joint economic lot sizing problem review and extensions with the growing focus on supply chain management firms realize that inventories across the entire supply chain can be more efficiently managed through greater cooperation and better coordination this paper presents a comprehensive and up to date review of the joint economic lot sizing problem jelp and also provides some extensions of this important problem in particular a detailed mathematical description of and a unified framework for the main jelp models are given additionally a comparative empirical study of the main policies proposed for jelp is conducted the focus of this study is on assessing the deviation of these policies from the optimal solution studying the performance of different models provides additional insights that will help in justifying their use in more complex supply chain models that involve more stages or other practical considerations of interest

limited rationality and strategic interaction the impact of the strategic environment on nominal inertia much evidence suggests that people are heterogeneous with regard to their abilities to make rational forward looking decisions this raises the question as to when the rational types are decisive for aggregate outcomes and when the boundedly rational types shape aggregate results we examine this question in the context of a long standing and important economic problem the adjustment of nominal prices after an anticipated monetary shock our experiments suggest that two types of bounded rationality money illusion and anchoring are important behavioral forces behind nominal inertia however depending on the strategic environment bounded rationality has vastly different effects on aggregate price adjustment if agents actions are strategic substitutes adjustment to the new equilibrium is extremely quick whereas under strategic complementarity adjustment is both very slow and associated with relatively large real effects this adjustment difference is driven by price expectations which are very flexible and forward looking under substitutability but adaptive and sticky under complementarity moreover subjects expectations are also considerably more rational under substitutability

replenishment decisions under an all units discount schedule and stepwise freight costs in this study we analyze the replenishment decisions under a general replenishment cost structure that includes stepwise freight costs and all units quantity discounts we first formulate a general model that accounts for a larger class of problems and prove several useful properties of the expected profit function we later utilize these properties to develop a computational solution approach to find the optimal order quantity as an application of the general results we study the replenishment decisions in the single period i e the newsboy problem considering several scenarios that model the cost considerations either for the buyer or for both the buyer and the vendor

a generalized quantity discount pricing model to increase supplier s profits in this paper the joint problem of ordering and offering price discount by a supplier to his sole major buyer is analyzed the objective is to induce the buyer to alter his order schedule and size so that the supplier can benefit from lower set up ordering and inventory holding costs we generalize the quantity discount pricing model of monahan monahan j p 1984 a quantity discount pricing model to increase vendor profits management sci 30 6 720 726 to 1 explicitly incorporate constraints imposed on the amount of discount that can be offered and 2 relax the implicit assumption of a lot for lot or order for order policy adopted by the supplier an algorithm is developed to solve the supplier s joint ordering and price discount problem

does money illusion matter reply the data in fehr and tyran ft 2001 and luba petersen and abel winn pw 2013 show that money illusion plays an important role in nominal price adjustment after a fully anticipated negative monetary shock money illusion affects subjects expectations and causes pronounced nominal inertia after a negative shock but much less inertia after a positive shock thus pw provide a misleading interpretation both of our and their own data

aggregate consequences of limited contract enforceability we study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts because of enforceability problems contracts are constrained efficient we show that limited enforceability amplifies the impact of technological innovations on aggregate output this implies that economies with lower enforceability of contracts are characterized by greater macroeconomic volatility a key assumption for the amplification result is that defaulting entrepreneurs are not excluded from the market

a note on integrated single vendor single buyer model with stochastic demand and variable lead time abstract ben daya and hariga 2004 integrated single vendor single buyer model with stochastic demand and variable lead time international journal of production economics 92 75 80 recently proposed the paper about integrated single vendor single buyer model with stochastic demand and variable lead time the lead time is proportional to the lot size produced by the vendor in addition to a fixed delay due to the transportation setup and nonproductive time the end customers accept backorders when the shortage occurs at the buyer side an order to the vendor is placed each time the inventory level reaches the reorder point in this note a modified model is proposed under a different assumption that there are two different reorder points and service levels

what causes rockets and feathers an experimental investigation prices usually adjust much faster when costs increase than when costs decrease in spite of the many empirical studies confirming this rockets and feathers phenomenon for different industries the mechanism driving it is not well understood we use simple experimental markets with and without search frictions and either privately or publicly observed cost shocks to study how sensitive the rockets and feathers phenomenon is to changes in search costs and information conditions in contrast to standard theoretical predictions we observe price dispersion and spontaneous asymmetric price adjustments in all treatments neither search costs nor private information on cost shocks are indispensable for prices to adjust asymmetrically in the short term the initial asymmetry quickly disappears if the direction of the cost shocks are publicly known while it persists in both treatments with private information

a classification of literature on determining the lot size under quantity discounts abstract determining a lot size in the presence of either all units or incremental discounts has represented one of major interests of materials managers it is a common practice that the suppliers offer quantity discount to entice the buyers to purchase more and to achieve economies of scale for transportation and processing costs this paper will classify the literature on lot sizing determination under several types of discount schemes and discuss some of the significant literature in this area over two decades also some future research areas have been identified

optimal capital structure and bankruptcy choice dynamic bargaining versus liquidation abstract we model a firm s optimal capital structure decision in a framework in which it may later choose to enter either chapter 11 reorganization or chapter 7 liquidation creditors anticipate equityholders ex post reorganization incentives and price them into the ex ante credit spreads using a realistic dynamic bargaining model of reorganization we show that the off equilibrium threat of costly renegotiation can lead to lower leverage even with liquidation in equilibrium if reorganization is less efficient than liquidation the added option of reorganization can actually make equityholders worse off ex ante even when they liquidate on the equilibrium path

integrated single vendor single buyer model with stochastic demand and variable lead time abstract in this paper we consider the single vendor single buyer integrated production inventory problem we relax the assumption of deterministic demand and assume that the lead time is varying lineraly with the lot size the lead time is composed of a lot size dependent run time and constant delay times such as moving waiting and setup times a solution procedure is suggested for solving the proposed model and numerical examples are used to illustrate the benefit of integration a sensitivity analysis is also performed to explore the effect of key parameters on lot size reorder point and expected total cost

analysis and applications of replenishment problems under stepwise transportation costs and generalized wholesale prices abstract in this study we analyze the replenishment decision of a buyer with the objective of maximizing total expected profits the buyer faces stepwise freight costs in inbound transportation and a hybrid wholesale price schedule given by a combination of all units discounts with economies and diseconomies of scale this general cost structure enables the model and the proposed solution to be also used for the supplier selection of a buyer under the single sourcing assumption we show that the buyer s replenishment problem reduces to finding and comparing the solutions of the following two subproblems i a replenishment problem involving wholesale prices given by an all units discount schedule with economies of scale and a lower bound on the replenishment quantity and ii a replenishment problem involving wholesale prices given by an all units discount schedule with diseconomies of scale and an upper bound on the replenishment quantity we propose solution methods for these two subproblems each of which stands alone as practical problems and utilize these methods to optimally solve the buyer s replenishment problem

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

coordinating a three level supply chain with learning based continuous improvement abstract learning curve theory has been widely used as a managerial tool to describe and model product and process improvement this paper investigates a three level supply chain supplier manufacturer retailer where the manufacturing operations undergo a learning based continuous improvement process improvements in the manufacturer s operation are characterized by enhanced capacity utilization reductions in set ups times and improved product quality through the elimination of rework as a result of these continuous improvements the manufacturer can justify a production policy that is based on more frequent smaller lot size production for this production policy to be practical and not sub optimal to the supply chain the manufacturer must integrate its lot sizing models with the replenishment policies of its upstream raw material suppliers and the demand requirements of its downstream customers retailers mathematical models that achieve chain wide lot sizing integration are developed and solution procedures for the models are illustrated by numerical examples the results demonstrate that learning based improvements in set up time and rework allow retailers to order in progressively smaller lot sizes as the manufacturer offers larger discounts and profits and that the entire supply chain benefits from implementing learning based continuous quality improvements the results also demonstrate that forgetting effects lead to increases in supply chain costs

an approach for developing an optimal discount pricing policy this paper addresses the problem of why and how a seller should develop a discount pricing structure even if such a pricing structure does not alter ultimate demand the situation modeled is most appropriate where the seller s product does not represent a major component of the buyer s final product where the demand for the product is derived or where the price is only one of many factors considered in making a purchase decision a model of buyer reaction to any given pricing scheme is developed to show that there exists a unified pricing policy which motivates the buyer to increase its ordering quantity per order thereby reducing the joint buyer and seller ordering and holding costs as a result the seller is able to reduce its costs while leaving the buyer no worse off and often better off the model is extended to handle variable ordering and shipping costs and situations where the seller faces numerous groups of buyers each having different ordering policies finally a case study is presented explicitly showing how the proposed pricing policy can be applied to the situation of a large seller selling to a number of different buyer groups

solving the feldstein horioka puzzle with financial frictions unlike the prediction of a frictionless open economy model long term average savings and investment rates are highly correlated across countries a puzzle first identified by feldstein and horioka 1980 we quantitatively investigate the impact of two types of financial frictions on this correlation one is limited enforcement w here contracts are enforced by the threat of default penalties the other is limited spanning where the only asset available is noncontingent bonds we find that the calibrated model with both frictions produces a savings investment correlation and a volume of capital flows close to the data to solve the puzzle the limited enforcement friction needs low default penalties under which capital flows are much lower than those in the data and the limited spanning friction needs to exogenously restrict capital flows to the observed level when combined the two frictions interact to endogenously restrict capital flows and thereby solve the feldstein horioka puzzle

the single vendor single buyer integrated production inventory model with a generalised policy abstract this note considers a more general type of policy for the single vendor single buyer integrated production inventory model than has hitherto been presented based on successive shipments to the buyer within a single production batch increasing by a fixed factor

on improving the single vendor single buyer integrated production inventory model with a generalized policy abstract in this note a simple procedure is suggested for modifying shipment size as obtained on applying the procedure given by hill european journal of operational research 97 1997 493 499

a dynamic model for the single vendor multi buyer problem abstract we consider a problem of a dynamic production distribution situation for a single product we examine the situation where a vendor produces a product in a batch production environment and supplies it to multiple buyers under deterministic conditions stationarity of buyers demands does not imply stationarity of the demand at the vendor which follows a periodic sequence we consider buyers and the vendor demands as periodic sequences in this case some turnpike policies relative to the class of periodic dynamic parameter problems are recommended some remarks on the existence of planning and forecast horizons are also given

an integrated inventory model for a single vendor and multiple buyers with ordering cost reduction abstract forming strategic alliances and utilizing modern information technologies have been the two most important ways for firms to gain such competitive advantages as lower logistics costs and secure customers loyalty in this paper we consider an integrated inventory system where a single vendor purchases and processes raw materials in order to deliver finished items to multiple buyers the vendor and all buyers are willing to invest in reducing the ordering cost e g establishing an electronic data interchange based inventory control system in order to decrease their joint total cost the amount of investment determines the planned ordering cost and hence affects their replenishment decisions one major managerial implication from this ordering cost reduction is that the efforts to streamline and speedup transactions via the application of information technologies may result in a higher degree of coordination and automation among allied trading parties an analytical model is developed to derive the optimal investment amount and replenishment decisions for both vendor and buyers the exponential ordering cost function is then applied to our general model and a numerical analysis is performed to provide interesting insights of the model numerical results show that the vendor and all the buyers can benefit directly from substantial cost savings by this ordering cost reduction investment

integrated vendor buyer cooperative models with stochastic demand in controllable lead time abstract this article presents the single vendor single buyer integrated production inventory models we relax the assumption that lead time demand x is deterministic and assume that it is stochastic also we assume that shortage during the lead time is permitted and lead time can be reduced at an added cost two models are considered here in the first model the demand of lead time follows a normal distribution and in the second model it is distribution free for both cases we develop effective iterative procedures for finding the optimal policy and numerical examples are used to illustrate the benefits of integration

optimal security design and dynamic capital structure in a continuous time agency model we derive the optimal dynamic contract in a continuous time principal agent setting and implement it with a capital structure credit line long term debt and equity over which the agent controls the payout policy while the project s volatility and liquidation cost have little impact on the firm s total debt capacity they increase the use of credit versus debt leverage is nonstationary and declines with past profitability the firm may hold a compensating cash balance while borrowing at a higher rate through the credit line surprisingly the usual conflicts between debt and equity asset substitution strategic default need not arise in this paper we consider a dynamic contracting environment in which a riskneutral agent or entrepreneur with limited resources manages an investment activity while the investment is profitable it is also risky and in the short run it can generate arbitrarily large operating losses the agent will need outside financial support to cover such losses and continue the project the difficulty is that while the probability distribution of the cash flows is publicly known the agent may distort these cash flows by taking a hidden action that leads to a private benefit specifically the agent may i conceal and divert cash flows for his own consumption and or ii stop providing costly effort which would reduce the mean of the cash flows therefore from the perspective of the principal or investors that fund the project there is the concern that a low cash flow realization may be a result of the agent s actions rather than the project s fundamentals to provide the agent with appropriate incentives investors control the agent s wage and may also withdraw their financial support for the project and force its early termination we seek to characterize an optimal contract in this framework and relate it to the firm s choice of capital structure we develop a method to solve for the optimal contract given the incentive constraints in a continuous time setting and study the properties of the credit line debt and equity that implement the contract as in the discrete time model of demarzo and fishman 2003 the continuous time setting offers several peter m demarzo is from stanford university and yuliy sannikov is from u c berkeley we

an integrated vendor buyer inventory model with quality improvement and lead time reduction abstract the success of the japanese in the employment of just in time jit production has received a great deal of attention in the past two decades the underlying goal of jit is to eliminate wastes which can be achieved through various efforts such as shortening lead time and improving quality recently yang and pan 2004 just in time purchasing an integrated inventory model involving deterministic variable lead time and quality improvement investment international journal of production research 42 5 853 863 have studied the effects of lead time reduction and quality improvement investment on an integrated inventory model the objective of this study is to extend yang and pan s 2004 model by allowing for shortages and using the reorder point as a decision variable that is this article develops an integrated inventory model which jointly determines the optimal order quantity reorder point process quality lead time and the frequency of deliveries simultaneously analytical results that characterize the exact optimal policy for the problem described above are devised to develop efficient and optimal computational procedures furthermore a numerical example is given to illustrate the results

does money illusion matter comment abstract this paper experimentally investigates whether money illusion generates substantial nominal inertia building on the design of fehr and tyran 2001 we find no evidence that agents choose high nominal payoffs over high real payoffs however participants do select prices associated with high nominal payoffs within a set of maximum real payoffs as a heuristic to simplify their decision task the cognitive challenge of this task explains the majority of the magnitude of nominal inertia money illusion exerts only a second order effect the duration of nominal inertia depends primarily on participants best response functions not the prevalence of money illusion jel c91 d21 d83 e31 e41 e52 l11

collateral taxes and leverage we quantify the importance of collateral versus taxes for firms capital structures we estimate a dynamic model in which a taxable firm seeks financing for investment and a dynamic contracting environment motivates endogenous collateral constraints optimal leverage stays a safe distance from the constraint balancing the tax benefit of debt with the cost of lost financial flexibility we estimate this flexibility cost to be 7 2 of firm assets a percentage that is comparable to the tax benefit models with different tax rates fit the data equally well and leverage responds to the tax rate only when taxes are low

taxes and leverage at multinational corporations abstract empirical research has struggled to show that variation in corporate capital structure arises from variation in estimated corporate income tax rates we argue that in previous studies both the tax rates applied to multinational corporations and the taxable income earned have been mismeasured using the bureau of economic analysis annual survey sample combined with each firm s income and country specific tax rate we find that firms do have higher leverage ratios and lower interest coverage ratios when they operate in countries with higher tax rates as theory would suggest the trade off theory of capital structure continues to have empirical support

how accurate is the integrated vendor buyer continuous model abstract the classic single item deterministic demand integrated vendor buyer model is revisited the decision problem may also be viewed as that of one centralized firm dealing with a two level eoq like supply chain with finite production rates it is sought to optimize the production lot size and the integral number of its shipments in equal batches from the vendor to the buyer while the problem calls for discrete optimization techniques we introduced a continuous model where one can take derivatives with respect to both variables in this short paper we establish a 98 5 lower bound on the accuracy of this continuous model

vendor selection with price breaks abstract we study the problem of vendor selection where a buyer must choose order quantities to place with vendors in a multiple sourcing network the selection process is influenced by the price delivery and quality objectives of the buyer as well as by the production or rationing constraints of the vendors vendors are assumed to offer price breaks which depend on the sizes of the order quantities each proce break schedule is characterized by two attributes it represents either quantity discounts or surcharges and is either cumulative all units or noncumulative incremental we present linear and mixed binary integer programming models that provide unifying frameworks for models of vendor performance measures from the purchasing literature and models of price breaks from the operations research literature we argue that our models offer viable approaches to vendor selection with price breaks because of the availability of commercial software packages for personal computers that provide flexible and efficient computational tools for solving the models this implies that vendor selection with price breaks can be performed at the fingertips of purchasing managers

coordinated supply chain management abstract historically the three fundamental stages of the supply chain procurement production and distribution have been managed independently buffered by large inventories increasing competitive pressures and market globalization are forcing firms to develop supply chains that can quickly respond to customer needs to remain competitive these firms must reduce operating costs while continuously improving customer service with recent advances in communications and information technology as well as a rapidly growing array of logistics options firms have an opportunity to reduce operating costs by coordinating the planning of these stages in this paper we review the literature addressing coordinated planning between two or more stages of the supply chain placing particular emphasis on models that would lend themselves to a total supply chain model finally we suggest directions for future research

large risks limited liability and dynamic moral hazard we study a continuous time principal agent model in which a risk neutral agent with limited liability must exert unobservable effort to reduce the likelihood of large but relatively infrequent losses firm size can be decreased at no cost or increased subject to adjustment costs in the optimal contract investment takes place only if a long enough period of time elapses with no losses occurring then if good performance continues the agent is paid as soon as a loss occurs payments to the agent are suspended and so is investment if further losses occur accumulated bad performance leads to downsizing we derive explicit formulae for the dynamics of firm size and its asymptotic growth rate and we provide conditions under which firm size eventually goes to zero or grows without bounds

financing investment spikes in the years surrounding world war i abstract in the period surrounding world war i us firms sharply increased investment in fixed assets and working capital to accommodate large increases in demand associated with the war concurrently the us adopted an excess profits tax which created a tax bias in favor of equity financing despite this tax bias firms in need of external funds largely issued debt not equity to finance investment spikes when the excess profits tax was in effect further we find these firms systematically reduced debt after the war whereas other firms did not the results support models that link the dynamics of firms financing decisions with the dynamics of their investment opportunities and are inconsistent with models that emphasize taxes as a primary determinant of financing decisions

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

an integrated production inventory model with imperfect production processes and weibull distribution deterioration under inflation abstract this study develops an integrated production and inventory model from the perspectives of both the manufacturer and the retailer the model assumes a varying rate of deterioration partial backordering inflation imperfect production processes and multiple deliveries the elapsed time until the production process shift is assumed to be arbitrarily distributed the discounted cash flow and classical optimization technique are used to derive the optimal solution a numerical example including the sensitivity analysis is given to validate the results of the production inventory model the integrated decision results in lower optimal joint cost compared with an independent decision by the manufacturer and the retailer

the optimal and heuristic solutions of a distribution network abstract competitive environment of global networking and customization call for cost reduction in arborescent tree like inventory system one of the keys to cost reduction is the integration of the supply chain much practical research has been done in the area of integrating the inventory system in recent years integration involves the joint decision making among the producer the distributors and the retailers in the supply chain by revising goyal s model an optimal solution is derived in this paper a heuristic solution model is also developed for a producer distributors retailers inventory system using the principle of strategic partnership numerical results indicate the heuristic solution is a good estimation of the optimal solution

note on a quantity discount pricing model to increase vendor profits monahan monahan james p 1984 a quantity discount pricing model to increase vendor profits management sci 30 june 720 726 develops a model for establishing an optimal quantity discount schedule from a vendor s viewpoint in this note we show that this model is limited to the case where the vendor buys from another supplier incorporating vendor s inventory carrying costs we develop a generalized version of monahan s model and demonstrate its equivalence with the joint economic lot size approach suggested by banerjee banerjee avijit 1986 a joint economic lot size model for purchaser and vendor decision sci 17 summer 292 311

joint economic lot size in distribution system with multiple shipment policy abstract this paper presents a new methodology to obtain the joint economic lot size in the case where multiple buyers are demanding one type of item from a single vendor the shipment policy is found and a new model is proposed to minimize the joint total relevant cost jtrc for both vendor and buyer s considering the two buyer and more than two buyer cases exact and approximate optimum solutions were obtained the benefits of the new model were illustrated in term of two different ratios production rate to demand rate and transportation cost to holding cost a sensitivity analysis was conducted to test the robustness of the new model

quality improvement and setup reduction in the joint economic lot size model abstract the co maker concept has become accepted practice in many successful global business organizations this fact has resulted in a class of inventory models known as joint economic lot size jels models heretofore such models assumed perfect quality production on the part of the vendor this paper relaxes this assumption and proposes a quality adjusted jels model in addition classical optimization methods are used to derive models for the cases of setup cost reduction quality improvement and simultaneous setup cost reduction and quality improvement for the quality adjusted jels numerical results are presented for each of these models comparisons are made to the basic quality adjusted model results indicate that all three policies exhibit significantly reduced total cost however the simultaneous model results in the lowest cost overall and the smallest lot size this suggests a synergistic impact of continuous improvement programs that focus on both setup and quality improvement of the vendor s production process sensitivity analysis indicates that the simultaneous model is robust and representative of practice

the joint economic lot size problem a review abstract this article reviews lot size models which focus on coordinated inventory replenishment decisions between buyer and vendor and their impact on the performance of the supply chain these so called joint economic lot size jels models determine order production and shipment quantities from the perspective of the supply chain with the objective of minimizing total system costs this paper first describes the problem studied introduces the methodology of the review and presents a descriptive analysis of the selected papers subsequently papers are categorized and analyzed with respect to their contribution to the coordination of different echelons in the supply chain finally the review highlights gaps in the existing literature and suggests interesting areas for future research

optimal lending contracts and firm dynamics we develop a general model of lending in the presence of endogenous borrowing constraints borrowing constraints arise because borrowers face limited liability and debt repayment cannot be perfectly enforced in the model the dynamics of debt are closely linked with the dynamics of borrowing constraints in fact borrowing constraints must satisfy a dynamic consistency requirement the value of outstanding debt restricts current access to short term capital but is itself determined by future access to credit this dynamic consistency is not guaranteed in models of exogenous borrowing constraints where the ability to raise short term capital is limited by some prespecified function of debt we characterize the optimal default free contract which minimizes borrowing constraints at all histories and derive implications for firm growth survival leverage and debt maturity the model is qualitatively consistent with stylized facts on the growth and survival of firms comparative statics with respect to technology and default constraints are derived borrowing constraints are an important determinant of firm growth and survival 1 such constraints may arise in connection to the financing of investment opportunities faced by firms or temporary liquidity needs such as those required to survive a recession this paper develops a theory of endogenous borrowing constraints and studies its implications for firm dynamics in our model debt is constrained by the firm s limited liability and option to default a lending contract specifies an initial loan size future financing and a repayment schedule the choice of these variables in turn determines future growth the firm s future borrowing capacity and its ability and willingness to repay hence borrowing constraints and firm dynamics are jointly determined we study this dynamic design problem our model builds on thomas and worral s 1994 model of foreign direct investment at time zero a risk neutral borrower firm or entrepreneur has a project which requires a fixed initial set up cost every period the project yields revenues that increase with the amount of 1 there is considerable evidence suggesting that financing constraints are important determinants of firm dynamics gertler and gilchrist 1994 argue that liquidity constraints may explain why small manufacturing firms respond more to a tightening of monetary policy than do larger manufacturing firms perez quiros and timmermann 2000 show that in recessions smaller firms are more sensitive to the worsening of credit market conditions as measured by higher interest rates and default premia evans and jovanovic 1989 show that the liquidity constraints are essential in the decision to become an entrepreneur fazzari hubbard and petersen 1988 among others view financial constraints as an explanation for the dynamic behaviour of aggregate investment and cabral and mata 1996 are able to fit reasonably well the size distribution of portuguese manufacturing firms by estimating a simple model of financing constraints for surveys see hubbard 1998 and stein 2003

as certain as debt and taxes estimating the tax sensitivity of leverage from state tax changes abstract using staggered corporate income tax changes across u s states we show that taxes have a first order effect on capital structure firms increase leverage by around 40 basis points for every percentage point tax increase consistent with dynamic tradeoff theory the effect is asymmetric leverage does not respond to tax cuts this is true even within firm tax increases that are later reversed nonetheless lead to permanent leverage increases the treatment effects are heterogeneous and confirm the tax channel tax sensitivity is greater among profitable and investment grade firms which respectively have a greater marginal tax benefit and lower marginal cost of issuing debt

optimizing the economic lot size of a three stage supply chain with backordering derived without derivatives abstract multi stage supply chain management integration provides a key to successful international business operations this is because the integrated approach improves the global system performance and cost efficiency the integrated production inventory models using differential calculus to solve the multi variable problems are prevalent in operational research this paper extends the integrated vendor buyer inventory problem by yang and wee yang p c wee h m 2002 the economic lot size of the integrated vendor buyer system derived without derivatives optimal control applications and methods 23 163 169 to solve the multi variable problems in the supply chain and simplifies the solution procedure using a simple algebraic method as a result the solution procedure may be easily understood and applied so as to derive the optimal solution

incorporating quantity discounts to the eoq model with transportation costs abstract this article extends a previous economic order quantity eoq model with two modes of transportation namely truckload tl and less than truckload ltl carriers by introducing all units and incremental quantity discount structures into the analysis exact algorithms are developed for each quantity discount structure to compute optimal policies for single stage models over an infinite planning horizon

a cooperative inventory policy with deteriorating items for a two echelon model a cooperative inventory policy between supplier and buyer is proposed unlike other studies we consider the case of deteriorating items and permit the completed back order in the problem we solve the problem without the condition of equal replenishments periods during a specified planning horizon and present a procedure to find the optimal solution a case is presented to demonstrate the application of the proposed approach the sensitivity analysis for a cooperation policy between supplier and buyer also are explored

note on a necessary and sufficient conditions for the existence of the optimal solution of a single vendor single buyer integrated production inventory model with process unreliability consideration abstract chung 2008 discussed the necessary and sufficient conditions for the existence of the optimal solution of an integrated production inventory model developed by huang 2004 which allowed a vendor and a buyer to minimize their expected integrated total cost function with an imperfect production process the objective of chung 2008 was to improve the solution procedure presented in huang 2004 in this study we identify three errors irrelevant conditions and inappropriate examples used in chung 2008 we provide a reformulation of the model and the correct necessary and sufficient conditions for optimality

on repeated moral hazard with discounting in this paper we analyze optimal contracts in an infinitely repeated agency model in which both the principal and agent discount the future we show that there is a stationary representation of the optimal contract when the agent s conditional discounted expected utility is used as a state variable this representation reduces the multi period problem to a static variational problem which can be analyzed using standard variational techniques this reduction is used to obtain several properties of the contract

why are ceos rarely fired evidence from structural estimation i evaluate the forced ceo turnover rate and quantify effects on shareholder value by estimating a dynamic model the model features learning about ceo ability and costly turnover to fit the observed forced turnover rate the model needs the average board of directors to behave as if replacing the ceo costs shareholders at least 200 million this cost mainly reflects ceo entrenchment rather than a real cost to shareholders the model predicts that shareholder value would rise 3 if we eliminated this perceived turnover cost all else equal the model also helps explain the relation between ceo firings tenure and profitability

idiosyncratic shocks and the role of nonconvexities in plant and aggregate investment dynamics we examine a model of lumpy investment wherein establishments face persistent shocks to common and plant specific productivity and nonconvex adjustment costs lead them to pursue generalized s s investment rules we allow persistent heterogeneity in both capital and total factor productivity alongside low level investments exempt from adjustment costs to develop the first model consistent with available evidence on establishment level investment rates reassessing the implications of lumpy investment for aggregate dynamics in this setting we find that they remain substantial when factor supply considerations are ignored but are quantitatively irrelevant in general equilibrium the substantial implications of general equilibrium extend beyond the dynamics of aggregate series while the presence of idiosyncratic shocks makes the time averaged distribution of plant level investment rates largely invariant to market clearing movements in real wages and interest rates we show that the dynamics of plants investments differ sharply in their presence thus model based estimations of capital adjustment costs involving panel data may be quite sensitive to the assumption about equilibrium our analysis also offers new insights about how nonconvex adjustment costs influence investment at the plant when establishments face large and weakly persistent idiosyncratic productivity shocks consistent with existing estimates we find that nonconvex costs do not cause lumpy investments but act to eliminate them

production and shipment lot sizing in a vendor buyer supply chain with transportation cost abstract previous research on the joint vendor buyer problem focused on the production shipment schedule in terms of the number and size of batches transferred between the two parties it is a fact that transportation cost is a major part of the total operational cost however in most joint vendor buyer models the transportation cost is only considered implicitly as a part of fixed setup or ordering cost and thus is assumed to be independent of the size of the shipment as such the effect of the transportation cost is not adequately reflected in final planning decisions there is a need for models involving transportation cost explicitly for better decision making in this study we analyze the vendor buyer lot sizing problem under equal size shipment policy we introduce the complete solution of the problem in an explicit and extended manner that has not existed in the literature we incorporate transportation cost explicitly into the model and develop optimal solution procedures for solving the integrated models all unit discount transportation cost structures with and without over declaration have been considered numerical examples are presented for illustrative purpose

a necessary and sufficient condition for the existence of the optimal solution of a single vendor single buyer integrated production inventory model with process unreliability consideration abstract in general an inventory problem consists of two parts 1 the modeling and 2 the solution procedure the accuracy of the solution procedure can help and simplify the implementation of the inventory model huang 2004 an optimal policy for a single vendor single buyer integrated production inventory problem with process unreliability consideration international journal of production economics 91 91 98 discusses a model to determine an optimal policy for a single vendor single buyer integrated production inventory problem with process unreliability consideration the objective is to minimize the total joint annual costs incurred by the vendor and the buyer however huang s solution procedure seems easy to cause misunderstandings so the main purpose of this paper will give the necessary and sufficient condition for the existence of the optimal solution to complement and improve the solution procedure of huang s inventory model

channel coordination and quantity discounts this paper presents a model for analyzing the impact of joint decision policies on channel coordination in a system consisting of a supplier and a group of homogeneous buyers the joint decision policy characterized by the unit selling price and the order quantity is coordinated through quantity discounts and franchise fees both the annual demand rate and the operating cost including the purchase ordering and inventory holding costs depend on the joint decision policy employed this paper contributes by integrating work addressing quantity discounts on inventory and ordering policies and work focusing on the control mechanism provided by quantity discounts in channel coordination it is shown that the optimal all unit quantity discount policy is equivalent to the optimal incremental quantity discount policy in achieving channel coordination furthermore it is shown that quantity discounts alone are not sufficient to guarantee joint profit maximization the analyses of the general models are illustrated by specific analytical results obtained for a given demand function