Analytical redefinition of DOL and managerial investment decisions

2014 ◽  
Vol 40 (7) ◽  
pp. 734-754 ◽  
Author(s):  
Yoram Kroll ◽  
David Yechiam Aharon
Keyword(s):  
Large Scale ◽  
Investment Decision ◽  
Production Level ◽  
Fixed Cost ◽  
Theoretical Formulation ◽  
Optimal Production ◽  
Demand Shocks ◽  
Content Type ◽  
Operating Leverage ◽  
The Impact

Purpose – The purpose of this paper is to develop alternative analytical measures for the degree of operating leverage (DOL) that reflect the impact of uncertain demand shocks in the product's market on optimal production levels, sales and profits of the firm. Design/methodology/approach – The elasticity measures are constructed according to a theoretical formulation of optimal production level that corresponds to demand shocks for given predetermined levels of fixed cost. Findings – The paper suggests two main findings. First, the analytical marginal DOL is at least twice the traditional DOL depending on the structure of the shock, the production function and demand's elasticity. The traditional DOL is equal to the measure only when large-scale negative demand prompts the firm to abandon production. Second, the paper also provides an analytical measure of DOL in terms of elasticity of profit to sales rather than to production level. Both theoretically and empirically elasticity of profit to sales can be better measured and better reflects risk. Research limitations/implications – This paper should be extended to encompass multiple shocks on demand and supply while investigating the empirical multi variants distribution of the shocks. Practical implications – The model can be used by managers who are well informed about the fixed and variable costs of their firm. The model determines the mean profit- risk trade off which is an important factor in all investment decision problems. Originality/value – Surprisingly and according to the best knowledge, this paper is the first attempt in the literature for alternative analytical DOLs’ formulations that is coherent with basic economic theories of optimal production level under risk.

The Value of Green Energy: Optimal Investment in Mutually Exclusive Projects and Operating Leverage

2019 ◽  
Vol 33 (7) ◽  
pp. 3307-3347 ◽  
Author(s):  
Jerome Detemple ◽  
Yerkin Kitapbayev
Keyword(s):  
Investment Decision ◽  
Optimal Investment ◽  
Green Energy ◽  
Variable Cost ◽  
Fixed Cost ◽  
Growth Options ◽  
Alternative Technologies ◽  
Cost Structures ◽  
Operating Leverage ◽  
The Impact

Abstract We study investments in exclusive projects with different cost structures. Our analysis incorporates the possibility of producing a stochastic revenue stream from two alternative technologies with a stochastic variable cost and a fixed cost, respectively, and accounts for project managers’ endogenous operating decisions. The optimal investment decision is characterized by two possibly nonmonotone boundaries. We examine the effect of operating leverage on managerial policies, investment decisions, and values and carry out an application to power generation projects. We assess the impact of knowledge acquisition, that is, investments in growth options. (JEL G13, Q40, Q42, L94)

scholarly journals Potentiating Effect of Mandelate and Lactate on Chemically Induced Germination in Members of Bacillus cereus Sensu Lato

2017 ◽  
Vol 83 (24) ◽  
Author(s):  
Alistair H. Bishop
Keyword(s):  
Bacillus Cereus ◽  
Large Scale ◽  
Germination Rate ◽  
Dependent Manner ◽  
Clostridium Sporogenes ◽  
Specific Chemical ◽  
Content Type ◽  
Ph Range ◽  
Significant Discovery ◽  
The Impact

ABSTRACT Endospores of the genus Bacillus can be triggered to germinate by a limited number of chemicals. Mandelate had powerful additive effects on the levels and rates of germination produced in non-heat-shocked spores of Bacillus anthracis strain Sterne, Bacillus cereus, and Bacillus thuringiensis when combined with l-alanine and inosine. Mandelate had no germinant effect on its own but was active with these germinants in a dose-dependent manner at concentrations higher than 0.5 mM. The maximum rate and extent of germination were produced in B. anthracis by 100 mM l-alanine with 10 mM inosine; this was equaled by just 25% of these germinants when supplemented with 10 mM mandelate. Half the maximal germination rate was produced by 40% of the optimum germinant concentrations or 15% of them when supplemented with 0.8 mM mandelate. Germination rates in B. thuringiensis were highest around neutrality, but the potentiating effect of mandelate was maintained over a wider pH range than was germination with l-alanine and inosine alone. For all species, lactate also promoted germination in the presence of l-alanine and inosine; this was further increased by mandelate. Ammonium ions also enhanced l-alanine- and inosine-induced germination but only when mandelate was present. In spite of the structural similarities, mandelate did not compete with phenylalanine as a germinant. Mandelate appeared to bind to spores while enhancing germination. There was no effect when mandelate was used in conjunction with nonnutrient germinants. No effect was produced with spores of Bacillus subtilis, Clostridium sporogenes, or C. difficile. IMPORTANCE The number of chemicals that can induce germination in the species related to Bacillus cereus has been defined for many years, and they conform to specific chemical types. Although not a germinant itself, mandelate has a structure that is different from these germination-active compounds, and its addition to this list represents a significant discovery in the fundamental biology of spore germination. This novel activity may also have important applied relevance given the impact of spores of B. cereus in foodborne disease and B. anthracis as a threat agent. The destruction of spores of B. anthracis, for example, particularly over large outdoor areas, poses significant scientific and logistical problems. The addition of mandelate and lactate to the established mixtures of l-alanine and inosine would decrease the amount of the established germinants required and increase the speed and level of germination achieved. The large-scale application of “germinate to decontaminate” strategy may thus become more practicable.

Buyer-assisted lean intervention in supplier firms: a supplier development approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Imranul Hoque
Keyword(s):  
Financial Incentives ◽  
Large Scale ◽  
Qualitative Data ◽  
Research Approach ◽  
Capability Development ◽  
Content Type ◽  
Production Capability ◽  
Lean Tools ◽  
The Right ◽  
The Impact

PurposeThis study aims to investigate how buyer-assisted lean intervention in garment supplier factories affects garment suppliers' productivity and production capability development.Design/methodology/approachEmploying a qualitative research approach and a lean intervention design, a multiple case study method was adopted for this study. Quantitative data on productivity performance and qualitative data on production capability development were collected from a Danish buyer and their four corresponding garment suppliers. Collected data were analysed using standard lean measurement tools and qualitative data analysis techniques.FindingsThis study demonstrates that buyer-assisted lean intervention is a useful strategy for garment suppliers to enhance their productivity and production capability. However, suppliers need to select the right lean tools, ensure seriousness and commitment to lean initiatives, substantial involvement of top management and workers, arrange formal and informal training, provide performance-based financial/non-financial incentives and nurture a learning culture to facilitate suppliers' production capability development.Research limitations/implicationsThis study implemented few lean tools in a single sewing line in four supplier factories for a short intervention duration. Thus, there is a scope for future studies to investigate the impact of the lean intervention on a large scale.Practical implicationsThe findings of this study might bring new insights to the management of buyer and supplier firms concerning how buyers could involve in suppliers' lean intervention initiatives and what suppliers need to ensure to develop production capability.Originality/valueFor the first time, this study engaged a buyer in suppliers' lean intervention initiatives to improve productivity and production capability in the garment industry of a developing country.

Trust, efficacy and ethicacy when testing prisoners for COVID-19

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Steve Lambert ◽  
Dean Wilkinson
Keyword(s):  
Large Scale ◽  
Current System ◽  
Epidemiological Studies ◽  
Careful Consideration ◽  
Power Relationships ◽  
England And Wales ◽  
Content Type ◽  
Large Scale Testing ◽  
The Uk ◽  
The Impact

Purpose The outbreak of the severe acute respiratory syndrome coronavirus 2 virus and subsequent COVID-19 illness has had a major impact on all levels of society internationally. The extent of the impact of COVID-19 on prison staff and prisoners in England and Wales is unknown. Testing for COVID-19 both asymptomatic and symptomatic, as well as for antibodies, to date, has been minimal. The purpose of this paper is to explore the widespread testing of COVID-19 in prisons poses philosophical and ethical questions around trust, efficacy and ethicacy. Design/methodology/approach This paper is both descriptive, providing an overview of the widespread testing of COVID-19 in prisoners in England and Wales, and conceptual in that it discusses and argues the issues associated with large-scale testing. This paper provides a discussion, using comparative studies, of the issues associated with large-scale testing of prisoners across the prison estate in England and Wales (120 prisons). The issues identified in this paper are contextualised through the lens of COVID-19, but they are equally transferrable to epidemiological studies of any pandemic. Given the prevalence of COVID-19 globally and the lack of information about its spread in prisons, at the time of writing this paper, there is a programme of asymptomatic testing of prisoners. However, there remains a paucity of data on the spread of COVID-19 in prisons because of the progress with the ongoing testing programme. Findings The authors argue that the widespread testing of prisoners requires careful consideration of the details regarding who is included in testing, how consent is gained and how tests are administered. This paper outlines and argues the importance of considering the complex nuance of power relationships within the prison system, among prisoner officers, medical staff and prisoners and the detrimental consequences. Practical implications The widespread testing of COVID-19 presents ethical and practical challenges. Careful planning is required when considering the ethics of who should be included in COVID-19 testing, how consent will be gained, who and how tests will be administered and very practical challenges around the recording and assigning of COVID-19 test kits inside the prison. The current system for the general population requires scanning of barcodes and registration using a mobile number; these facilities are not permitted inside a prison. Originality/value This paper looks at the issues associated with mass testing of prisoners for COVID-19. According to the authors’ knowledge, there has not been any research that looks at the issues of testing either in the UK or internationally. The literature available details countries’ responses to the pandemic rather and scientific papers on the development of vaccines. Therefore, this paper is an original review of some of the practicalities that need to be addressed to ensure that testing can be as successful as possible.

Does salience matter in investment decision?

Kybernetes ◽  
2019 ◽  
Vol 48 (8) ◽  
pp. 1894-1912
Author(s):  
Samra Chaudary
Keyword(s):  
Investment Decision ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Individual Investors ◽  
Short Term ◽  
Content Type ◽  
Multigroup Analysis ◽  
Money Managers ◽  
The Impact

Purpose The paper takes a behavioral approach by making use of the prospect theory to unveil the impact of salience on short-term and long-term investment decisions. This paper aims to investigate the group differences for two types of investors’ groups, i.e. individual investors and professional investors. Design/methodology/approach The study uses partial least square-based structural equation modeling technique, measurement invariance test and multigroup analysis test on a unique data set of 277 active equity traders which included professional money managers and individual investors. Findings Results showed that salience has a significant positive impact on both short-term and long-term investment decisions. The impact was almost 1.5 times higher for long-term investment decision as compared to short-term decision. Furthermore, multigroup analysis revealed that the two groups (individual investors and professional investors) were statistically significantly different from each other. Research limitations/implications The study has implications for financial regulators, money managers and individual investors as it was found that individual investors suffer more with salience heuristic and may end up with sub-optimal portfolios due to inefficient diversification. Thus, investors should be cautious in fully relying on salience and avoid such bias to improve investment returns. Practical implications The study concludes with a discussion of policy and regulatory implications on how to minimize salience bias to achieve optimum and diversified portfolios. Originality/value The study has significantly contributed to the growing body of applied behavioral research in the discipline of finance.

scholarly journals Measuring and assessing the impact of using volunteers in UK libraries: issues and methods

2014 ◽  
Vol 15 (3) ◽  
pp. 112-121 ◽  
Author(s):  
Judith Broady-Preston
Keyword(s):  
Systematic Review ◽  
Large Scale ◽  
Third Sector ◽  
Professional Staff ◽  
Research Centre ◽  
Content Type ◽  
Qualitative Approaches ◽  
Starting Point ◽  
Third Sector Organisations ◽  
The Impact

Purpose – The purpose of this paper is to examine a range of issues and methods in relation to measuring the impact of volunteer labour on the design and delivery of all types of library services. With the increasing use of volunteers to deliver library and information services in all sectors, managers need to assess their effectiveness and evaluate the impact of their use in relation to operational service design and delivery, and on the development of the profession and professional practice as a whole. Presented here is an initial scoping study, outlining a range of issues, methods and challenges for more detailed future investigation. Design/methodology/approach – A number of methodological challenges and perspectives are identifiable. Contemporary libraries exhibit increasing similarities with Third Sector organisations, namely a complex stakeholder community, and increasing use of volunteers to supplement or replace services delivered by professional staff. Therefore, a starting point for the research is a systematic review and analysis of the methodologies developed by the Third Sector Research Centre, and those studies in the ESRC contemporary Developing Impact Evaluation strand. As a rich picture is required, both quantitative and qualitative approaches are necessary, with the overall study adopting a mixed methods approach. Findings – This paper reports the findings of the preliminary documentary analysis, literature review and scoping aspects of a large-scale study. Originality/value – Research undertaken to date (June 2014) has failed to identify any published systematic review and examination of these issues.

scholarly journals Cap rates and risk: a spatial analysis of commercial real estate

2018 ◽  
Vol 35 (1) ◽  
pp. 25-43
Author(s):  
Florian Unbehaun ◽  
Franz Fuerst
Keyword(s):  
Real Estate ◽  
Risk Perceptions ◽  
Large Scale ◽  
Risk Premia ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Data Series ◽  
Large Set ◽  
Content Type ◽  
The Impact

Purpose This study aims to assess the impact of location on capitalization rates and risk premia. Design/methodology/approach Using a transaction-based data series for the five largest office markets in Germany from 2005 to 2015, regression analysis is performed to account for a large set of asset-level drivers such as location, age and size and time-varying macro-level drivers. Findings Location is found to be a key determinant of cap rates and risk premia. CBD locations are found to attract lower cap rates and lower risk premia in three of the five largest markets in Germany. Interestingly, this effect is not found in the non-CBD locations of these markets, suggesting that the lower perceived risk associated with these large markets is restricted to a relatively small area within these markets that are reputed to be safe investments. Research limitations/implications The findings imply that investors view properties in peripheral urban locations as imperfect substitutes for CBD properties. Further analysis also shows that these risk premia are not uniformly applied across real estate asset types. The CBD risk effect is particularly pronounced for office and retail assets, apparently considered “prime” investments within the central locations. Originality/value This is one of the first empirical studies of the risk implications of peripheral commercial real estate locations. It is also one of the first large-scale cap rate analyses of the German commercial real estate market. The results demonstrate that risk perceptions of investors have a distinct spatial dimension.

Supplier development under cooperative and non-cooperative investment structures

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abhishek Srivastava ◽  
Parimal Kumar ◽  
Arqum Mateen
Keyword(s):  
Investment Decision ◽  
Spillover Effect ◽  
Investment Decisions ◽  
The Other ◽  
Supplier Development ◽  
Content Type ◽  
Cooperative Development ◽  
Investment Structure ◽  
Cooperative Investment ◽  
The Impact

PurposeThis study analyzes supplier development investment decisions under a triadic setting (two buyers and a common supplier). In a triadic setting, the supplier development investment decision of one buyer can have a spillover effect of the benefits on other buyer. Therefore, it is utmost important for the investing buyer to understand the impact of benefit spillover on other competing buyers'. Therefore, one of the purposes of this study to analyze the supplier development investment decision of buyers under two scenarios. First, under cooperative development structure where both buyers jointly invest in supplier and share equal benefits. Second, non-cooperative investment structure where both buyers individually invest in supplier development and share unequal benefits.Design/methodology/approachIn order to assess the impact of supplier development investment decisions on the profitability of buyers and the common supplier, the authors used game-theoretic approach. The authors design a Stackelberg leader-follower game where the supplier acts as Stackelberg leader and buyers follow the supplier's pricing decision to maximize their profit level. Additionally, both buyers decide either to cooperate or non-cooperate while investing in supplier development.FindingsThe results show that the cooperative investment is always an optimal strategy for buyers and supplier. Interestingly, the efficient buyer's share of investment level is lower under non-cooperative investment structure and he is better-off due to its capability of taking advantage from the other buyer's investment. However, the inefficient buyer, on the other hand, is worse-off under non-cooperative investment. Furthermore, comparative analysis between the two shows that initially, the buyer who extracts more profit because of the other buyers' development investment tends to prefer the non-cooperative development investment set up. However, after a certain point, the same buyer is better-off under cooperative development investment through cooperation, and sharing equal benefit of the supplier's development, as the supplier in turn, starts charging a higher wholesale price under non-cooperative investment case.Originality/valueTo the best of authors’ knowledge, extant literature on supplier development has mostly focused on. One supplier-one buyer; thus, the learning spillover effect has almost been unexplored. In real-life, different buyers often purchase from the shared supplier. Therefore, it is important to analyze the spillover of supplier development benefits due to investment of one buyer on other buyer and deriving the condition under which buyers would be incentivized to invest jointly or individually.

The impact of relative CEO compensation on not-for-profit contributions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stacey Kaden ◽  
Gary Peters ◽  
Juan Manuel Sanchez ◽  
Gary M. Fleischman
Keyword(s):  
Large Scale ◽  
Ceo Compensation ◽  
Drop Out ◽  
Content Type ◽  
For Profit ◽  
Not For Profit ◽  
Survivorship Bias ◽  
Excess Cash ◽  
The Impact ◽  
A Current

PurposeThe authors extend research suggesting that external funders reduce their contributions to not-for-profit (NFP) organizations in response to media-reported CEO compensation levels.Design/methodology/approachEmploying a maximum archival sample of 44,807 observations from US Form 990s, the authors comprehensively assess the extent that high relative NFP CEO compensation is associated with decreases in future contributions.FindingsThe authors find that donors and grantors react negatively to high relative CEO compensation but do not react adversely to high absolute executive compensation. Contributors seem to take issue with CEO compensation when they perceive it absorbs a relatively large portion of the organizations’ total expenses, which may hinder the NFP’s mission. Additional findings suggest that excess cash held by the NFP significantly exacerbates the negative baseline relationship between future contributions and high relative CEO compensation. Finally, both individual donors and professional grantors are sensitive to cash NFP CEO compensation levels, but grantors are more sensitive to CEO noncash compensation.Research limitations/implicationsThe authors’ data are focused on larger NFP organizations, so this limits the generalizability of the study. Furthermore, survivorship bias potentially influences their time-series investigations because a current year large-scale decrease in funding due to high relative CEO compensation may cause some NFP firms to drop out of the sample the following year due to significant funding reductions.Originality/valueThe study makes three noteworthy contributions to the literature. First, the study documents that the negative association between high relative CEO compensation levels and future donor and grantor contributions is much more widespread than previous literature suggested. Second, the authors document that high relative CEO compensation levels that trigger reductions in future contributions are significantly exacerbated by excess cash held by the NFP. Finally, the authors find that more sophisticated grantors are more sensitive to noncash CEO compensation levels as compared with donors.

The impact of technological innovation upon servitization

2019 ◽  
Vol 30 (7) ◽  
pp. 1097-1114 ◽  
Author(s):  
Bang-Ning Hwang ◽  
Mu-Yen Hsu
Keyword(s):  
Service Delivery ◽  
Technological Innovation ◽  
Large Scale ◽  
Manufacturing Firms ◽  
Multivariate Logistic Regression Model ◽  
Technological Innovations ◽  
Manufacturing Firm ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose For most manufacturing firms, technological innovations are usually the key strategies to gain their competitive advantages. However, competing strategically through service provision is becoming an important strategy for most industries. A growing demand for packaged product and service delivery is blurring the traditional boundaries between manufacturing and service firms. This trend is called “servitization.” Prior research had different perspectives on the relationship between technological innovations and servitization. Some argued that as servitization exerts the innovative convergence of products and services, the possession of appropriate readiness and absorption capacity through technological innovations for a manufacturing firm is critical to the success of servitization. In contrast, some argued that the knowledge gained from developing technological innovations cannot be applied to the creation of services due to the fundamental difference between technology and service. These contradicting arguments motivated the authors to study the relationship between technological innovations and servitization a step further. The paper aims to discuss these issues. Design/methodology/approach To address the research gap, the authors conducted an empirical study based on the large-scale samples from the second Taiwan Community Innovation Survey (Taiwan CIS). A multivariate logistic regression model was applied in the research. Findings The authors found that different types of technological innovations, namely product innovation and process innovation, have different impacts on servitization. The innovativeness level of the technological innovation moderates the relationship between technological innovation and servitization. Based on the above findings, this research specifically explains the causes of the contradictory results of the prior research. Originality/value The values of this research are twofold. Its academic contribution rests on bridging the literature of innovation and servitization, and on providing a model to clarify the relationships among technological innovation type, level of innovativeness and servitization. Its practical contribution lies in its establishment of a guideline that illuminates manufacturing firms reinforcing service delivery through their existing technological innovation trajectory.

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