scholarly journals Kelly Criterion for Optimal Credit Allocation

2021 ◽  
Vol 14 (9) ◽  
pp. 434
Author(s):  
Son Tran ◽  
Peter Verhoeven
Keyword(s):  
Performance Measurement ◽  
Performance Measures ◽  
Critical Issue ◽  
Probability Of Default ◽  
Credit Allocation ◽  
Kelly Criterion ◽  
Allocation System ◽  
Processing Information ◽  
Allocation Decisions ◽  
Dichotomous Classification

The purpose of this study is to address the critical issue of optimal credit allocation. Predicting a borrower’s probability of default is a key requirement of any credit allocation system but turning it into labeled classes leads to problems in performance measurement. In this paper the connection between the probability of default and optimal credit allocation is established through a conceptual construct called the Kelly criterion. Conflicting performance measures in dichotomous classification are replaced with coherent criteria for judging the performance of credit allocation decisions. Extensive testing on peer-to-peer lending data shows that the Kelly strategy enables consistent outperformance and efficiency in processing information relative to alternative credit allocation approaches.

Performance measurement for supply chain management and quality management integration

2019 ◽  
Vol 27 (7) ◽  
pp. 2130-2147 ◽  
Author(s):  
Marcio C. Machado ◽  
Renato Telles ◽  
Paulo Sampaio ◽  
Maciel M. Queiroz ◽  
Ana Cristina Fernandes
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Quality Management ◽  
Performance Measurement ◽  
Performance Measures ◽  
Chain Management ◽  
Content Type ◽  
Theoretical Perspectives ◽  
Overall Performance ◽  
Key Aspects

Purpose The purpose of this paper is to present a conceptual framework for performance measurement (PM) for the integration of supply chain management (SCM) and quality management (QM). Design/methodology/approach A systematic literature review on SCM and QM was conducted to develop key performance measures related to six areas of integration between QM and SCM: leadership; continuous improvement and innovation; sustainability performance; stakeholders; information system; and management and strategic planning. Findings Supported by the literature concerning to supply chain quality management (SCQM) integration, a set of nine propositions about performance measures, that contribute to the integration of SCQM, were developed. Originality/value This study contributes to QM practices within a supply chain environment from an integrated perspective. Additionally, the propositions have significant implications from both managerial and theoretical perspectives. This study also extends the concept of supply chain quality integration by focusing on key aspects of PM that may help to improve the overall performance of the supply chain.

Systematic Approach to Measuring ILI Tool Performance

2014 ◽  
Author(s):  
Sean Keane ◽  
Karmun Cheng ◽  
Kaitlyn Korol
Keyword(s):  
Performance Measurement ◽  
Performance Measures ◽  
New Technologies ◽  
Efficient Reduction ◽  
Tool Performance ◽  
Typical Performance ◽  
Substantial Investment ◽  
Integrity Management ◽  
Insight Into

In-line inspection (ILI) tools play an important role within integrity management and substantial investment is made to continuously advance performance of the existing technologies and, where necessary, to develop new technologies. Performance measurement is typically focused for the purpose of understanding the measured performance in relation to the ILI vendor specification and for the determination of residual uncertainty regarding pipeline integrity. These performance measures may not provide the necessary insight into what type of investment into a technology is necessary to further reduce residual uncertainty regarding pipeline integrity, and beyond that, what investment, as an operator, results in an effective and efficient reduction in uncertainty. The paper proposes a reliability based approach for investigating uncertainty associated with ultrasonic crack ILI technology for the purpose of identifying efficient investment into the technology that results in an effective and measurable improvement. Typical performance measures and novel performance measurement methods are presented and reviewed with respect to what information they can provide to assist in investment decisions. Finally, general observations are made regarding Enbridge’s experience using ultrasonic crack ILI technology and areas currently being investigated.

A Stochastic Approach to Risk Management and Decision Making in Defined Benefit Pension Schemes

2003 ◽  
Vol 9 (3) ◽  
pp. 493-586 ◽  
Author(s):  
S. Haberman ◽  
C. Day ◽  
D. Fogarty ◽  
M. Z. Khorasanee ◽  
M. McWhirter ◽  
...  
Keyword(s):  
Decision Making ◽  
Performance Measures ◽  
Asset Allocation ◽  
Stochastic Approach ◽  
Free Variable ◽  
Defined Benefit ◽  
Contribution Rate ◽  
And Performance ◽  
Allocation Decisions ◽  
Made In

ABSTRACTThe trustees and sponsors of defined benefit schemes rely on the advice of the Scheme Actuary to make important decisions concerning the funding of the scheme, the investment of its assets, and the use of surplus assets to improve benefits. These decisions have to be made in the face of considerable uncertainty about financial and demographic factors that will affect the future experience of the scheme and its success in meeting various objectives.The traditional actuarial valuation combined with actuarial judgement has played an important role in guiding decision making; but we argue that stochastic methods can add value in certain crucial areas, in particular the financial risk management of defined benefit schemes. Rather than dealing with risk by incorporating margins in the valuation basis, a stochastic approach allows the actuary to evaluate specific and quantifiable risk and performance measures for alternative funding and investment strategies.This paper recommends a framework that, when combined with a suitable stochastic model, measures the risks inherent in contribution rate and asset allocation decisions, allowing better decisions to be made. In doing this, we suggest and apply various risk and performance measures that may be thought appropriate, although our intention is to illustrate their use rather than prescribe them as objective standards. The framework provides the means to explore the trade-offs involved in possible contribution and asset allocation decisions, and points to decision strategies expected to give improved outcomes for the same level of risk. A feature of the approach that marks it out from current asset/liability techniques is that it examines the funding and investment decisions together. It does not derive a contribution rate in the traditional way, but leaves this as free variable, in the same way that the investment decision is taken to be a free variable. Another distinctive feature of our framework is that it is based on projection rather than on valuation, involving stochastic simulation of the experience of the scheme over a time horizon reflecting the concerns of the trustees and the sponsoring employer.The paper provides a case study (based on a model final salary pension scheme) showing the advantages of the framework, and goes on to explain how the results may practically be communicated to trustees and scheme sponsors.

Performance Measurement in Surgery

2016 ◽  
Author(s):  
Justin B. Dimick
Keyword(s):  
Gastric Bypass ◽  
Performance Measurement ◽  
Outcome Measures ◽  
Performance Measures ◽  
Laparoscopic Gastric Bypass ◽  
Quality Measures ◽  
Technical Skill ◽  
Process Of Care ◽  
Surgical Quality ◽  
Health Care Structure

With growing recognition that the quality of surgical care varies widely, good measures of performance are in high demand. An ever-broadening array of performance measures is being developed to meet these different needs; however, considerable uncertainty remains about which measures are most useful for measuring surgical quality. Current measures encompass different elements of health care structure, process of care, and patient outcomes. This review covers overview of surgical quality measures, categories of quality measures, structural measures of quality, process of care measures, direct outcome measures, matching the measure to the purpose, improving existing performance measures, and the future of performance measurement. Figures show relative ability of historical (2005-2006) measures of hospital volume and risk-adjusted mortality to predict subsequent (2007-2008) risk-adjusted mortality in US Medicare patients,  risk-adjusted mortality and morbidity for colon resection at individual hospitals before and after adjustment for reliability, variation in surgeon technical skill for 20 bariatric surgeons performing laparoscopic gastric bypass in the Michigan Bariatric Surgery Collaborative (MBSC), and relationship of surgeon technical skill and risk-adjusted complications and resource use after laparoscopic gastric bypass in the MBSC. The table lists primary strengths and limitations of structure, process, and outcome measures.   This review contains 4 highly rendered figures, 1 table, and 34 references

Tailoring the Weights on Objective versus Subjective Performance Measures between Top Management and Middle Managers: Evidence from Performance-Based Equity Incentive Plans

2019 ◽  
Vol 32 (3) ◽  
pp. 49-70
Author(s):  
Clara Xiaoling Chen ◽  
Yongjing Gao ◽  
Yue Wang ◽  
Shuang Xue
Keyword(s):  
Performance Measurement ◽  
Performance Measures ◽  
Price Competition ◽  
Middle Managers ◽  
Cost Benefit ◽  
Top Management ◽  
Public Firms ◽  
Organizational Stability ◽  
Incentive Plans ◽  
Equity Incentive

ABSTRACT This study examines the determinants of performance measurement tailoring between top management and middle managers in compensation contracts. Theoretically, while tailoring potentially enhances the informativeness of performance measures for top management and middle managers respectively, it may reduce the incentives for the two parties to coordinate with each other. We expect a firm's decision to tailor performance measurement between top management and middle managers to be driven by this cost-benefit trade-off. Using hand-collected data from performance-based equity incentive plans from Chinese public firms, we find evidence consistent with the predictions derived from our theoretical framework. Specifically, we find that the likelihood that a firm tailors the weights on objective versus subjective performance measures between top and middle managers increases with competition intensity, non-price competition, environmental uncertainty, and CEO power, and decreases with organizational stability and growth opportunity. Furthermore, we find that suboptimal tailoring decisions are associated with higher management turnover.

The Fifth Perspective

2010 ◽  
pp. 2378-2388
Author(s):  
Preeti Goyal ◽  
Bhimaraya A. Metri
Keyword(s):  
Performance Measurement ◽  
Performance Measures ◽  
Balanced Scorecard ◽  
Business Process Outsourcing ◽  
Organizational Boundaries ◽  
Strategic Objectives ◽  
The Balanced Scorecard ◽  
Measurement Framework ◽  
External Relationships ◽  
New Perspective

Today, alliances, collaborations, and networks are synonymous with strategy. Business process outsourcing (BPO) is one such type of alliance. With increasing reliance on outsourcing, the organizational boundaries are blurring. The implications for the client organization can be tremendous, as it now relies on an outside organization to fulfill its operational objectives. Currently, there is no single framework that can effectively measure performance for BPO arrangements. In its present form, the balanced scorecard (BSC) only addresses the performance measurement needs of a single enterprise and any perspective on any external relationships is completely missing. The traditional BSC does not suffice as a performance measurement framework for BPO. While both the client and the vendor can use a BSC for their respective organizations, the strategic objectives of the organizations may not be met. In this article the authors propose a new perspective as an extension to the BSC, namely, the goals alignment perspective. Goals alignment of the two organizations will enable creation of performance measures that will help participating organizations to achieve their respective goals.

Performance Measures for Multimodal Transportation Systems

1996 ◽  
Vol 1518 (1) ◽  
pp. 85-93 ◽  
Author(s):  
Richard H. Pratt ◽  
Timothy J. Lomax
Keyword(s):  
Land Use ◽  
Performance Measurement ◽  
Travel Time ◽  
Performance Measures ◽  
System Performance ◽  
Transportation Systems ◽  
Regional Networks ◽  
Multimodal Transportation ◽  
Decision Context ◽  
Multimodal Systems

Transportation systems analyses have been evolving as the decision context for improvement projects and programs has changed. The increased emphasis on the movement of persons and goods, and a recognition of the importance of system performance measures that address the needs and interests of the audiences for mobility information, will result in a very different set of procedures for evaluating transportation and land use infrastructure and policies. Some of the key underlying concerns of performance measurement for multimodal systems are presented. Definitions are included for congestion, mobility, and accessibility that are used to guide the development of performance measures. Travel time–based measures are seen as the most readily understandable quantities, and examples are used to show how mobility can be measured for locations, corridors, transit analyses, and regional networks.

A Balanced Scorecard Approach to Monitoring and Evaluating E-Partnerships

2011 ◽  
pp. 205-227
Author(s):  
Fang Zhao
Keyword(s):  
Performance Measurement ◽  
Performance Measures ◽  
Balanced Scorecard ◽  
Performance Metrics ◽  
Business Partnerships ◽  
Complementary Resources ◽  
Performance Measurement Systems ◽  
Future Direction ◽  
Traditional Performance

The ongoing success of e-partnership requires the constant monitoring and measuring of its progress and outcomes. Many companies rushed into e-partnerships in order to exploit complementary resources that they lacked but knew little about how to make their partnerships work and how to effectively monitor and measure its performance. Even today, many partnerships are left to drift without a system in place to assess the quality of partnerships. So, how can the productivity and health of a partnership be monitored and measured? The biggest challenge relating to performance measurement for e-partnerships is that e-partners are often independent business firms and legal entities with different stakeholders and different business objectives and goals. In the supplychain, for example, one firm can rarely control the entire supply chain’s performance. However, performance measures that can be extended across firm boundaries and processes are needed to measure inter-organizational e-partnerships. The uncertainty and intangibility of e-business and information technology add more complexity and challenges to the measurement of e-partnership performance. Looking at the current literature, it is not hard to find that the development and implementation of performance measurement systems for inter-firm collaboration is still in its infancy. Overall, traditional performance measures do not focus on key inter-firm activities to monitor extended enterprise performance. This chapter reviews and discusses various concepts, models and issues of performance measurement. On the basis of that, the chapter proposes, by taking a balanced scorecard approach, a new set of performance metrics for managers to assess the process and outcome of e-partnerships in a comprehensive manner. The chapter will also help e-partners to benchmark against best practices and determine future direction and priorities in their e-business partnerships.

The Application of Fuzzy Performance Modelling Procedures in Extended Enterprise Performance Measurement

2011 ◽  
pp. 170-201
Author(s):  
Jian Zhou ◽  
Paul Folan ◽  
Harinder Jagdev ◽  
Jim Browne
Keyword(s):  
Performance Measurement ◽  
Performance Measures ◽  
Value Chain ◽  
Performance Measurement System ◽  
Innovative Development ◽  
Enterprise Networks ◽  
Extended Enterprise ◽  
Performance Modelling ◽  
Measurement Framework ◽  
Modern Business

The concept of performance, as it is measured and evaluated, is undergoing a transformation in modern business organisations, so that partnering companies who form enterprise networks that work together across the value chain, can apply evolving performance measurement structures that more accurately capture value chain realities. In this chapter an Extended Enterprise (EE) performance measurement system that can theoretically present models, measures and data from all aspects of the participating companies’ functions in an EE is presented; together with the innovative development of a fuzzy-based performance modelling method, which acts as a supplement to the original procedural measurement framework, enabling the development of a system of performance measurement that is of greater relevance to both intra-organisational and inter-organisational levels, and which goes beyond current efforts to achieve greater reliability in the selection and implementation of performance measures.

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