Low-risk investment strategy: sector bets or stock bets?

PurposeThe portfolio of low-risk stocks outperforms the portfolio of high-risk stocks and market portfolios on a risk-adjusted basis. This phenomenon is called the low-risk effect. There are several economic and behavioral explanations for the existence and persistence of such an effect. However, it is still unclear whether specific sector orientation drives the low-risk effect. The study seeks to answer the following important questions in Indian equity markets: (a) Whether sector bets or stock bets mainly drive the low-risk effect? (b) Is it a mere proxy for the well-known value effect? (c) Does the low-risk effect prevail in long-only portfolios?Design/methodology/approachThe study is based on all the listed stocks on the National Stock Exchange (NSE) of India from December 1994 to September 2018. It classifies them into 11 Global Industry Classification Standard (GICS) sectors to construct stock-level and sector-level BAB (Betting Against Beta) and long-only low-risk portfolios. It follows the study of Asness et al. (2014) to construct various BAB portfolios. It applies Fama–French (FF) three-factor and Fama–French–Carhart (FFC) four-factor asset pricing models in addition to Capital Asset Pricing Model (CAPM) to examine the strength of BAB, sector-level BAB, stock-level BAB and long-only low-beta portfolios.FindingsBoth sector- and stock-level bets contribute to the return of the low-risk investing strategy, but the stock-level effect is dominant. Only betting on safe sectors or industries will not earn economically significant alpha. The low-risk effect is unique and not a value effect in disguise. Both long-short and long-only portfolios within sectors and industry groups deliver positive excess returns. Consumer staples, financial, materials and healthcare sectors mainly contribute to the returns of the low-risk effect in India. This study offers empirical evidence against the Samuelson (1998) micro-efficient market given the strong performance of the stock-level low-risk effect.Practical implicationsThe superior performance of the low-risk investment strategies at both stock and sector levels offers investors an opportunity to strategically invest in stocks from the right sectors and earn high risk-adjusted returns with lower drawdowns over an entire market cycle. Besides, it paves the way for stock exchanges and index manufacturers to launch sector-specific low-volatility indices for relevant sectors. Passive funds can launch index funds and exchange-traded funds by tracking these indices. Active fund managers can espouse sector-specific low-risk investment strategies based on the results of this and similar other studies.Originality/valueThe study is the first of its kind. It offers insights into the portfolio characteristics and performance of the long-short and the long-only variant of low-risk portfolios within sectors and industry groups. It decomposes the low-risk effect into sector-level and stock-level effects.

AVAILABILITY OF ESSENTIAL MEDICINES IN PUBLIC HEALTH FACILITIES OF JIMMA ZONE, SOUTHWEST ETHIOPIA

Background: Availability is the relationship between the type and quantity of product or services needed and the type and quantity of product or services provided. Availability of essential medicines at facility level is an important factor to address patients' satisfaction and increase their health seeking behavior. The objective of this study is to determine the availability and associated factors of essential medicines in public health facilities of Jimma zone, South West Ethiopia. Methods: Facility-based cross-sectional study design was employed. Based on WHO recommendation, thirty health facilities were selected from five districts and six health facilities were chosen from each district of the zone. Availability of 29 key essential medicines that were selected from 2014 Ethiopian national essential medicine list were checked in stores and dispensaries as well as the store keepers, head of health facilities and dispensaries were selected for interview. The data were checked for completeness, edited, and coded then entered and analyzed using excels 2016 and SPSS version 23. Descriptive statistics were computed and tables, graphs and numerical summary presented results. Result: Average availability of selected core essential medicines (n=29) was 78.6% in surveyed health facilities. With regard to stock level, 8% of the surveyed medicines were in critical level, 55.2% were in safe level and 36.8% were in over stock level. Six hundred six patients were participated in the study with a response rate of 97%. Among total respondents, 77.7% left the facility with all of their prescribed medicines while 22.3% received only part of their prescribed medicines. Conclusion: The availability of essential medicines was fairly high in surveyed health facilities during the study period. In this study, many patients seeking treatment in public health facilities failed to obtain significant proportion of prescribed medicines. Peer Review History: Received: 4 November 2021; Revised: 10 December; Accepted: 22 December, Available online: 15 January 2022 Academic Editor: Dr. A.A. Mgbahurike, University of Port Harcourt, Nigeria, [email protected] UJPR follows the most transparent and toughest ‘Advanced OPEN peer review’ system. The identity of the authors and, reviewers will be known to each other. This transparent process will help to eradicate any possible malicious/purposeful interference by any person (publishing staff, reviewer, editor, author, etc) during peer review. As a result of this unique system, all reviewers will get their due recognition and respect, once their names are published in the papers. We expect that, by publishing peer review reports with published papers, will be helpful to many authors for drafting their article according to the specifications. Auhors will remove any error of their article and they will improve their article(s) according to the previous reports displayed with published article(s). The main purpose of it is ‘to improve the quality of a candidate manuscript’. Our reviewers check the ‘strength and weakness of a manuscript honestly’. There will increase in the perfection, and transparency. Received file: Reviewer's Comments: Average Peer review marks at initial stage: 5.0/10 Average Peer review marks at publication stage: 7.0/10 Reviewers: Dr. A.A. Mgbahurike, University of Port Harcourt, Nigeria, [email protected] Dr. George Zhu, Tehran University of Medical Sciences, Tehran, Iran, [email protected] Similar Articles: ACCESS TO MEDICINES STRATEGIES OF THE NATIONAL CANCER CONTROL PROGRAMME IN CAMEROON THE EFFICIENCY OF INEFFICIENCY: MEDICINE DISTRIBUTION IN SUDAN

Optimal pre-sale policy for deteriorating items

<p style='text-indent:20px;'>Pre-sale policy is a frequently-used sales approach for deteriorating products, e.g, fruits, vegetables, seafood, etc. In this paper, we consider an EOQ inventory model under pre-sale policy for deteriorating products, in which the demand of pre-sale period depends on price and pre-sale horizon, and the demand of spot-sale period depends on the price and stock level. Optimal pricing decisions and economic order quantity are also provided. We compare pre-sale model with a benchmark inventory model in which all the products are sold in spot-sale period. Theoretical results are derived to show the existence and uniqueness of the optimal solution. Numerical experiments are carried out to to illustrate the theoretical results. And sensitivity analysis is conducted to identify conditions under which the pre-sale policy is better off than the spot-sale only policy.</p>

Inventory models with stock - and price-dependent demand for deteriotating items based on limited space

This paper deals with the problem of determining the optimal selling price and order quantity simultaneously under EOQ model for deteriorating items. It is assumed that the demand rate depends not only on the on-display stock level but also the selling price per unit, as well as the amount of shelf/display space is limited. We formulate two types of mathematical models to manifest the extended EOQ models for maximizing profits and derive the algorithms to find the optimal solution. Numerical examples are presented to illustrate the models developed and sensitivity analysis is reported.

Practices of anti-malaria pharmaceuticals inventory control system and associated challenges in public health facilities of Oromiya special zone, Amhara region, Ethiopia

Background Anti-malaria pharmaceuticals inventory control system helps to maintain an appropriate stock level using logistics management information system records and reports. Antimalaria pharmaceuticals are highly influenced by seasonality and demand variation. Thus, to compensate the seasonality, resupply quantities should be adjusted by multiplying the historical consumption with the Look-ahead seasonality indexes (LSI) to minimize stock-outs during the peak transmission season and overstocks (possible expiries) during off-peak seasons The purpose of this study was to assess anti-malaria pharmaceuticals inventory control practice and associated challenges in public health facilities of the Oromiya special zone, Amhara region, Ethiopia. Methodology Facility-based cross-sectional study design employing both quantitative and qualitative methods, explanatory sequential mixed method, of data collection and analysis was used in all public health facilities in the Oromia special zone from September 1 to September 30, 2019. The study was conducted in 27 health centers and 2 hospitals, the dispensing units managing anti-malaria pharmaceuticals and data was collected using observation checklists The quantitative data were analyzed by Statistical package for social sciences using linear regression. Purposive sampling was used to select key informants and 12 in-depth interviews were conducted by the principal investigator. Thematic analysis was performed using Nvivo 11 plus and interpretation by narrative strategies. Results The quantitative finding in this study revealed that none of the health facilities surveyed calculated months of stock and multiplied the historical consumption with look ahead seasonal indices (LSI) to forecast the upcoming year consumptions.. Average months of stock of anti-malaria pharmaceuticals were 5.32 months with the annual wastage rate of 11.32%. The point and periodic availability of anti-malaria pharmaceuticals was 72.38 and 77.03% respectively. The number of stocks out days within the previous 6 months was 41.34 days. The study also reported bin card usage (β = − 3.5, p = 0.04) and availability of daily dispensing register (β = − 2.7, p = 0.005) had statistically significant effect on anti-malaria pharmaceuticals inventory control practice. The perceived challenges attributed to the poor anti-malaria pharmaceuticals inventory control practice were lack of integrated pharmaceutical logistics system training, management support, inadequate and near expiry supply from pharmaceuticals supply agency, job dissatisfaction, and staff turnover. Conclusion Inventory control practices for anti-malaria pharmaceuticals was poor as indicated by maximum stock level and none of the health facilities calculated months of stock and the previous consumption was not multiplied by look ahead seasonal indices to compensate the seasonal and demand variation. Efforts should be under-taken by concerned bodies to improve inventory control practice; such as training and regular follow up have to be provided to the health professionals managing anti-malaria pharmaceuticals.

A Fuzzy Production Inventory Model for Deteriorating Items with Shortages

In this paper we have developed a supply chain production inventory model for deteriorating items with shortage under Fuzzy environment. The formulae for the optimal average system cost, stock level, backlog level and production cycle time are derived when the deterioration rate is very small. In reality it is seen that we cannot define all parameters precisely due to imprecision or uncertainty in the environment. So, we have defined the inventory parameter deterioration rate as triangular fuzzy numbers. The signed distance method and graded mean integration method have been used for defuzzification. Numerical examples are taken to illustrate the procedure of finding the optimal total inventory cost, stock level and backlog level. Sensitivity analysis is carried out to demonstrate the effects of changing parameter values on the optimal solution of the system.

MATHEMATICAL DESCRIPTION OF THE DISTRIBUTION LOGISTICS PROCESSES OF CONSIGNMENT SELLER DIETARY SUPPLEMENT MANUFACTURING COMPANIES

Consignment sales are a special case of supply chains, as the products are never the property of the seller, so the distribution logistics network and the logic of the structure of the products are radically different from those of normal supply chains. Another problem is that the products have a shelf life. The inventory mechanism (qmin; qmax) is most often used for the commissioned stocks of companies producing food supplements and when checking the central inventory, i.e. replenishment to the maximum stock level when a certain stock level is reached. There are several factors to consider when filling up commission stocks and reviewing them by period. With the mathematical correlations of these factors, it is possible to distribute the commissioned finished products optimally. The paper deals with this problem.

Two-Echelon Inventory Model With Service Consideration and Lateral Transshipment

This paper considers a two-echelon inventory system with service consideration and lateral transshipment. So far, researchers have not extensively considered the use of lateral transshipment for such systems. Demand arrivals at both echelons follow the Poisson process. We introduce a continuous review base stock policy for the system in steady state, which determined the expected level for on-hand inventory, expected lateral transshipment level and expected backorder level. We showed that the model satisfied convexity with respect to base stock level. Computational experiments showed that the model with lateral transshipment performed better that the model without lateral transshipment.