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Guest editorial: application of business intelligence (BI) to assist management decision
Article Type: Guest editorial From: Management Decision, Volume 52, Issue 7
From business intelligence (BI) to decision
BI is considered as the process of turning data into information and then into knowledge allowing decision makers to tune their actions according to the company strategy (Golfarelli et al., 2004). BI is also one of the techniques to improve qualitative and quantitative value of the knowledge available to decision makers (Cody et al., 2002). Hence, BI can contribute to decision making (Ishikawa and Nakagawa, 2013). The process involves the application of research methods, models, and approaches to various domain problems. The field of management has a drive for an increasing need for data analysis (Moutinho and Huarng, 2012). The demonstration of how the process can be applied to assist decision making is interesting to many practitioners.
However, to obtain better quality of information to assist better decision making, the development of new research methods, models, and approaches is also very important, which may involve creating new methods, refining, or integrating existing methods. Hence, the need for introducing the development is also critical.
To that end, this special issue is to offer a collection of papers focussing on both perspectives, first, the development of new research methods, models, and approaches includes proposing a new semi-parametric framework, proposing a new path Philips curve, proposing a new regime switch forecasting model, proposing a quantile regression forecasting model, integrating both quantitative (questionnaires) and qualitative (interview), and integrating the Modigliani-Miller theorem and stock repurchases strategy. Second, the application the existing research methods to various problems includes investigating optimal decision methods, applying analytic hierarchy process, applying soft computing technique and fuzzy statistics, and applying statistics to fuzzy data.
The purpose is to model the problem better, to understand the problem better, to forecast better so as to assist decision making. The problem domains include health expenditures in China, the strategies for preventing economic downturn, luxury fashion brand image design, reuse of the wastewater, capital decision, stock index forecasting, information and communication technology (ICT) development, and time management.
The contributions in this special issue
Collectively, the ten papers in this special issue serve to increase the reader’s understanding and skill in some new research methods, models, and approaches, as well as the application the existing research methods to various problems to assist decision making. Each of the articles is introduced below.
Water has become very important resource all over the world. The use of reclaimed water may contribute significantly to reducing the pressure on water resources in many countries. Yu-Min Wu et al. use analytic hierarchy process to investigate the principles on how to reuse the reclaimed wastewater in urban areas, and to determine the appropriate reuse targets and to optimize the selection of reuse targets on wastewater. Through the analysis, they found that industrial use, agriculture irrigation, and environmental use are the most appropriate water reuse targets.
Wei-chieh Liang et al. integrate the MM theory by Modigliani and Miller (1958, 1963) with stock repurchase strategy to procure a practical concept for capital decision. They consider corporate tax and funding sources as two crucial factors in the no-arbitrage proof model. There are two different effects on firm's value through stock repurchases. The positive effect on firm's value occurs through stock repurchases with loan fund and the negative impact on firm's value through stock repurchases with idle fund.
Yu-Ting Cheng and Chih-Ching Yang design the control chart of interval-valued fuzzy data set. They apply the general statistical principles on the standardized control chart to obtain fuzzy control chart for interval-valued fuzzy data with standard interval-valued fuzzy mean and standard deviation. Empirical studies are used to illustrate the application for designing standardized fuzzy control chart.
Time series are involved in different kinds of decision making and many financial and economic time series tend to exhibit behavior that is characterized by “regime switches.” The behavior of “regime switches” makes forecasting more difficult and the forecasting of regime switches becomes more important. Kun-Huang Huarng proposes a novel model where occurrences of relationships are taken into account when forecasting. The Taiwan Stock Exchange Capitalization Weighted Stock Index is selected as the forecasting target. Due to the consideration of occurrences of relationships in forecasting, the forecasting performance is improved.
Quantile regression is a popular method used for estimating quantiles and offers a more complete model than conventional mean regression. Since its beginning, quantile regression has been applied to interpret various problems. By extending the conventional quantile regression, Tiffany Hui-Kuang Yu proposes a quantile regression forecasting model to forecast ICT development. Via the quantile information criterion, the proposed approach can identify whether the independent variables are predictable. For those which are predictable, the proposed approach can be used to forecast these variables.
A shipper is an intermediary firm to provide a physical function of transportation. Most of long distance shipping line is controlled by few shippers. They declare their shipping freight to forwarders and consignees. However, it is difficult for small manufacturers to achieve full cargo transportation. Short distance shipping, the competition is more violence between shippers and forwarders. Junzo Watada, Thisana Waripan, and Berlin Wu investigate optimal decision methods under a cooperative situation in two-echelon logistic models. They then propose the optimal strategies of exporters in different rival game behaviors: Stackelberg, Collusion, and Cournot, each of which provides the optimal decision for the duopolistic shippers and the oligopolistic forwarders in each scenario. From the empirical studies they find that, first, among three scenarios, the oligopolistic treatment of forwarders’ actions demonstrates that Stackelberg behavior can carry out the maximum profit, and second Collusion game can achieve the maximum profit for the shippers.
“Luxury” has become a global market showing strong growth in 2010 and is poised for further expansion. Japan has been one of the most important markets for luxury goods over the decades, and has become the capital of luxury and a mass market paradise for luxury brands. As a mature market for luxury goods in Asia, Japan may have special meaning for other Asian emerging markets; thus, it is of great significance to understand how luxury brands cope with their business in Japan. Zhiqing Jiang, Shinya Nagasawa, and Junzo Watada attempt to reveal how store design influences luxury brand image building in a competitive market through the case study of two luxury fashion brands – Bally and Tod’s. Quantitative (questionnaires) and qualitative (interview) approaches are both used to draw the positioning maps of brand image and store image, to calculate the distance of images between managers and consumers and to derive and compare inference structure. The results clarify that a big difference is found between consumers’ and managers’ cognition. Beautiful, modern or sometimes aggressive architectures designed by famous architects enable luxury brands to appeal and convey their concepts to the public. Location and store atmosphere should be influential non-verbal factors in luxury brand image building.
Even though the policies of abolishing drug addition, setting additional pharmaceutical service fee, and increasing governmental fiscal compensation are implemented for pilot public hospitals in China, the medical care expenditure keeps increasing. Chinese Health Statistics Summary 2012 illustrates that average expenditures of medical care service and average drug expenditures for both inpatients and outpatients keep escalating. Therefore, the deduction of health expenditures for individuals has been a continuous challenge under the reform background of returning to public welfare. Juying Zeng attempts to identify the determinants of average health expenditures for inpatients in China with the employment of semi-parametric approach on national data for period 2002-2010 and regional data during 2005-2010. First, the research aims to identify correlative determinants among all possible variables involving both macroeconomic and hospital internal perspectives. Second, the research aims to identify whether each correlative variable impact on average health expenditures similarly via distinguishing linear decisive variables and non-linear control variables among all correlative determinants.
Bing Xu and Xiaowen Hu investigate alternative strategies for preventing economic downturn and achieving positive output gap using a scenario analysis approach. They also focus on identifying the relation among monetary policy, house price, and output gap. A path Philips curves approach is proposed to investigate output gap, which develops hybrid Philips curves with the control variables of money supply, house price, and interest rates. The empirical results indicate that it is difficult to change the negative output gap only by increasing money supply or cutting interest rates or controlling house price.
A number of studies discuss the need for better incorporating time in theoretical models and research designs. Others focus on how organizations manage their time, and on how these efforts can be improved for the time management. Berlin Wu and Hung Nguyen propose new statistical methods on the marketing research and efficiency evaluation. They use soft computing technique and fuzzy statistical tool to evaluate people’s performance on the time management. The index of efficiency between observed time and ideal time is also presented. With the ranking of fuzzy sample, we can examine the decision process by non-parametric testing hypothesis.
The Guest Editors would like to thank anonymous reviewers for their strict and valuable comments. Without their support this work would not have gone through so efficiently.
Professor Kun-Huang Huarng
Department of International Trade, Feng Chia University, Taichung, Taiwan
Professor Berlin Wu
Department of Mathematical Sciences, National Chengchi University, Taipei, Taiwan
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