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Article
Publication date: 1 February 1984

Arnell D. Johnson and John D. Stowe

The selection of the optimal credit investigation policy is a sequential decision problem that Mehta solved using decision tree analysis. This paper explores the managerial…

Abstract

The selection of the optimal credit investigation policy is a sequential decision problem that Mehta solved using decision tree analysis. This paper explores the managerial implications of the credit investigation/credit granting policy. The credit policy selected effects the resources required for credit investigation, the scale of collection efforts, the level and breakdown of accounts receivable, cash budgets, and total sales and production costs.

Details

Managerial Finance, vol. 10 no. 2
Type: Research Article
ISSN: 0307-4358

Article
Publication date: 1 January 2005

Lisa A. Burke and Chengho Hsieh

A pressing research question in human resources (HR) is how to determine the value HR adds to a firm. This article seeks to address this issue

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Abstract

Purpose

A pressing research question in human resources (HR) is how to determine the value HR adds to a firm. This article seeks to address this issue

Design/methodology/approach

As summarized here, benchmarking techniques, ROI tools, behavioral analyses and other types of quantitative efforts have attempted to provide answers, but such methods also have downsides. In the present paper, the long‐established finance concept of net present value (NPV) is applied in order to determine the value that HR activities provide to an organization's business strategy.

Findings

A specific example is used to illustrate how NPV can be used to value the HR activities in a firm pursuing an innovation business strategy. An explanation is also given of how NPV can be used in making decisions related to HR outsourcing.

Practical implications

NPV is used to operationalize the strategic net benefit (SNB) of HR's costs and contributions to a firm's business strategy.

Originality/value

The long‐established finance concept of net present value (NPV) is applied in order to determine the value that HR activities provide to an organization's business strategy.

Details

Journal of Human Resource Costing & Accounting, vol. 9 no. 1
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 1 February 1975

Peter Cooke

The monograph examines firstly the magnitude of demand for capital investment in individual items of distribution equipment—ships, aircraft and motor vehicles, It then…

Abstract

The monograph examines firstly the magnitude of demand for capital investment in individual items of distribution equipment—ships, aircraft and motor vehicles, It then concentrates on financing motor transport, examining the objectives of acquisition analysis and the relative importance of the company controlling its own fleet. Alternative methods of distributing the product are examined to show how transport involvement can be minimised according to the marketing strategy adopted. The monograph considers, in some detail, alternative approaches to commercial vehicle acquisition. The broad principles of the subject are discussed and three common methods presented—outright purchase, hire purchase and leasing. Worked examples are shown for each method, using discounted cash flow techniques and the net present costs of the alternatives compared. The final section of the paper examines the changing demand for capital in the company for transport from its launch as a one man operation through to the mature large organisation.

Details

International Journal of Physical Distribution, vol. 5 no. 4
Type: Research Article
ISSN: 0020-7527

Book part
Publication date: 7 December 2001

Sardas M.N. Islam

Abstract

Details

Optimal Growth Economics: An Investigation of the Contemporary Issues and the Prospect for Sustainable Growth
Type: Book
ISBN: 978-0-44450-860-7

Article
Publication date: 8 May 2009

V. Riihimäki

The purpose of this paper is to analyze the suitability of the real option methods in the valuation of WiMAX networks. Particularly, the shapes of the probability distributions

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Abstract

Purpose

The purpose of this paper is to analyze the suitability of the real option methods in the valuation of WiMAX networks. Particularly, the shapes of the probability distributions for the investment costs and net present values (NPV) are examined.

Design/methodology/approach

The study analyzes the costs and NPV distributions by simulating an investment project in a rural area. The paper examines the influences of different uncertainty models and the shapes of the resulting investment costs, NPVs, and NPV ratios. The simulated option values are compared to results from different analytical equations.

Findings

The analysis in this study shows that the shape of the uncertainty – or error – in the parameters does not affect the shapes of the investment costs or NPV distribution. Instead, the subject of the uncertainty – i.e. the parameters for which the uncertainty is modeled – matters.

Practical implications

The study shows that the uncertainties and opportunities in network investments may increase the value of the projects dramatically and thus they should be taken into account. The shape of the NPV distribution varies depending on the technology and construction strategy of the network. This makes the real option valuation challenging since the assumptions of the valuation models must be satisfied for reliable results. Analytical option valuation formulas give the same results as simulation, only if the assumptions are sufficiently fulfilled and the parameters properly estimated.

Originality/value

The uncertainty in the service rate growth or population growth parameter influences the resulting distributions. The investment costs are positively skewed and can be approximated by a log‐normal distribution. This makes NPV negatively skewed, which suits badly in the existing analytical option valuation methods assuming log‐normal assets. Also, the NPV ratio is correlated with the investment costs.

Details

info, vol. 11 no. 3
Type: Research Article
ISSN: 1463-6697

Keywords

Article
Publication date: 1 June 1972

Peter Cooke

The costs of physical distribution, like the costs of production or marketing, consist of a number of elements whose prices are frequently determined independently and without…

Abstract

The costs of physical distribution, like the costs of production or marketing, consist of a number of elements whose prices are frequently determined independently and without apparent reference to each other. In the same way that production costs can be controlled by varying the inputs of capital, raw materials and labour according to their current cost relationships; or the efficiency of a marketing programme maximised through judicious adjustment of the marketing mix, so can the costs of physical distribution be minimised by scientific warehouse location, inventory control, transport mix analysis, containerisation and route planning. Widespread application of operational research techniques, industrial engineering and marketing research mean that the spectacular savings available in the past in marketing and production have been achieved.

Details

International Journal of Physical Distribution, vol. 3 no. 3
Type: Research Article
ISSN: 0020-7527

Article
Publication date: 11 April 2018

John Rodney Turner and Yan Xue

The purpose of this paper is to develop a new model for the success of megaprojects. Megaprojects are often said to fail because they finish late and/or overspent. As megaprojects…

1689

Abstract

Purpose

The purpose of this paper is to develop a new model for the success of megaprojects. Megaprojects are often said to fail because they finish late and/or overspent. As megaprojects are usually complex, so small changes in input can lead to disproportionate changes in output. So the time and cost targets at the start can have little validity. They are useful targets, not values which can be used to judge success or failure. The authors suggest that a megaproject is a success if it produces a worthwhile result at a time and cost that makes it valuable.

Design/methodology/approach

The authors develop a new model for the success of megaprojects, and asses its applicability against a number of case studies from well-known sources.

Findings

The authors identify four dimensions of megaproject success: they produce an output at a time and cost that makes it valuable; they achieve the desired outcome and benefit at a time and cost that makes them valuable; they deliver positive net present value; and they deliver a business or public need at a time and cost which makes it valuable.

Research limitations/implications

The authors propose a new model for megaproject success that moves away from the so-called iron triangle or triple constraint, which are meaningless in the context of complex projects. Time and cost to completion cannot be predicted on complex projects. However, targets are required because a megaproject must produce a valuable outcome at a time and cost that makes it valuable.

Practical implications

The paper produces a new way of assessing the success of megaprojects which will lead to a larger number of megaprojects being assessed to be successful. It indicates what is truly important, that the megaproject should produce and outcome of value at a time and cost that makes it valuable.

Social implications

Megaprojects often produce benefits to society over and above the financial benefits. Often an economic benefit cannot be paced on these social benefits, which makes it problematic to assess the value of the project. In one of the cases economic value was placed on the social benefits, and the benefit:cost ratio was increased from 0.85 to 2.5.

Originality/value

The authors propose a new model for the success of megaprojects.

Details

International Journal of Managing Projects in Business, vol. 11 no. 3
Type: Research Article
ISSN: 1753-8378

Keywords

Article
Publication date: 1 August 1994

Geanie W. Margavio, Ross L. Fink and Thomas M. Margavio

Quality improvement decisions are the catalyst for substantialtechnological improvements being made in the manufacturing sector. Thenew technology, however, has developed faster…

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Abstract

Quality improvement decisions are the catalyst for substantial technological improvements being made in the manufacturing sector. The new technology, however, has developed faster than techniques for evaluating capital investments in such improvements. This is largely because the benefits of quality improvement technology are difficult to quantify. The Taguchi loss function is incorporated into a net present value capital budgeting technique to provide an estimate of these benefits. Describes the loss function in relation to key quality costs: appraisal and prevention costs, and internal and external failure costs. External failure cost savings are generated by reducing variability in the manufacturing process. These savings are then compared with the cost of the quality improving technology. Results indicate that these savings can be substantial, depending on the achieved reduction in the process variability, the cost of capital, and on the estimate of the cost of processing a customer’s return of the product.

Details

International Journal of Quality & Reliability Management, vol. 11 no. 6
Type: Research Article
ISSN: 0265-671X

Keywords

Article
Publication date: 1 June 1985

The librarian and researcher have to be able to uncover specific articles in their areas of interest. This Bibliography is designed to help. Volume IV, like Volume III, contains…

12667

Abstract

The librarian and researcher have to be able to uncover specific articles in their areas of interest. This Bibliography is designed to help. Volume IV, like Volume III, contains features to help the reader to retrieve relevant literature from MCB University Press' considerable output. Each entry within has been indexed according to author(s) and the Fifth Edition of the SCIMP/SCAMP Thesaurus. The latter thus provides a full subject index to facilitate rapid retrieval. Each article or book is assigned its own unique number and this is used in both the subject and author index. This Volume indexes 29 journals indicating the depth, coverage and expansion of MCB's portfolio.

Details

Management Decision, vol. 23 no. 6
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 5 August 2019

Olubayo Moses Babatunde, Josiah Lange Munda and Yskandar Hamam

The application of hybrid renewable energy system (HRES) can mitigate inadequate access to clean, stable and sustainable energy among households in sub-Saharan Africa (SSA)…

Abstract

Purpose

The application of hybrid renewable energy system (HRES) can mitigate inadequate access to clean, stable and sustainable energy among households in sub-Saharan Africa (SSA). Available studies on HRES seem to concentrate only on its techno-economic and environmental viability. In so doing, these studies do not seem to underline the likely challenges that follow the acquisition of HRES by especially low-income households. The ensuing reality is, of course, a limitation in the use of HRES in homes with low incomes. It is therefore imperative to analyze how a household with low income can afford this kind of energy system. The purpose of this study, therefore, lies in presenting a techno-economic, environmental and affordability analysis of how HRES is acquired.

Design/methodology/approach

To arrive at a grounded analysis, a typical household in SSA is used as an example. The analysis focused on the pattern of energy use, and this is obtained by visiting an active site to evaluate the comprehensive load profile. In the course of analysis, an optimal techno-economic design and sizing of a hybrid PV, wind and battery were undertaken. Additionally, an acquisition analysis was done based on loan amortization.

Findings

The interesting result is that a combination of the photovoltaic-gasoline-battery system is the most cost-effective energy system with a net present cost of $2,682. The system combination can lead to an emission reduction of approximately 98.3 per cent, compared to the use of gasoline generating sets, common mostly in SSA. If an amortized loan is used to purchase the energy system, and the payment plan is varied such that the frequency of payments is made quarterly, annually, semi-annually, bi-monthly, semi-monthly and bi-weekly, it will be observed that low-income household can conveniently acquire a HRES.

Originality/value

The result presented a framework by which a low-income household can purchase and install HRES. To facilitate this, it is recommended that low-income households should be given interest-friendly loans, so as to enhance the acquisition of HRES.

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