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The paper seeks to develop an analytical theory of project investment.

The authors derive a partial differential equation that the variable cost of a project should satisfy, determine a proper initial condition through a thought experiment, and solve the equation.

A formula of variable cost as an analytical function of fixed cost, uncertainty of the environment and the duration of a project is obtained.

The analytical formula enables systematic comparison of returns of different investment under different market conditions to be made. This refines the insights from real option theory in many ways. Since all production systems need fixed investment to lower variable costs, by providing an analytical theory about the relation among fixed costs, variable costs and uncertainty, this theory contributes a new foundation to investment theory and other different fields.

An analytical theory of project investment about the relation among fixed costs, variable costs, uncertainty of the environment and the duration of a project, which is the core concern in most business decisions, does not exist in the current literature.

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

Preface The functions of business divide into several areas and the general focus of this book is on one of the most important although least understood of these—DISTRIBUTION. The particular focus is on reviewing current practice in distribution costing and on attempting to push the frontiers back a little by suggesting some new approaches to overcome previously defined shortcomings.

Cost behaviour classification and cost behaviour structures of manufacturing companies. The purpose of this paper is to determine the cost structures of companies that formed part of an empirical investigation. Further aspects were investigated to determine why manufacturing companies classify cost behaviour into fixed and variable components and to determine how these companies classify specific cost items. It was found that there is a significant negative relationship between the fixed cost of a company and its degree of technological development. This means that labour intensive companies have more fixed cost as part of total costs and therefore a higher operating risk than technologically developed companies. It was also found that manufacturing companies classify cost items differently and this study provides some guidelines how to manage cost behaviour.

Information provided for managers by an accounting department can be divided into two broad categories: (a) information which will help managers to control future costs incurred, and (b) information which will enable managers to be well‐informed when making decisions involving a choice between alternative courses of action. Both accountants and managers need to understand the way in which costs respond to changes in the level or type of activity if appropriate information is to be presented and used effectively. Furthermore, the ability to employ techniques such as standard costing, budgetary control and marginal costing, which are commonly used in planning and controlling organisations' activities, must be based on an appreciation of the basic relationships between costs and volume.

The epistemology of project management has been considered imperfect because the gap between theory and practice has not become closer due to unsatisfactory project performance. Without effective learning, the transfer of learning to the workplace would be uncertain. Therefore, the purpose of this paper is to use the learning study approach, exploring the value of Variation Theory in comparing two typologies of the cost concept for project management teaching.

To illustrate the application of the theory of variation, a case of teaching the two major cost typologies was demonstrated. A pedagogical setting was designed from the theory for helping students discern the object of learning.

Students of the target cohort had much fewer errors than previous cohorts in transforming the costs of the first typology used in project management textbooks to those of the second typology used in Microsoft Project.

This is perhaps the first case study to appreciate the use of Variation Theory in project management teaching. Apparently, thinking of how to induce learning and facilitate the transfer of learning should be a productive way for creating excellence in practice.

We study the performance attributes of an international production form that is designed for success in an increasingly global marketplace‐global product design and development. We find that firms elicit higher returns from their global product development when they compete in strategic complements than when they compete in strategic substitutes. These firms are most likely to compete in strategic complements if they have higher free cash flows, but are most likely to compete in strategic substitutes if they are more dominant in their industry. Importantly, global product development reduces cost largely via variable cost reduction. Moreover, we find that global product development contributes to the firm’s growth potential when pursued in conjunction with high multinationalism, aggressive competitive strategy, and high cost saving.

The purpose of this paper is to report on the incidence of the choice between full‐cost and variable‐cost pricing, and to examine the factors that could possibly influence this choice. The findings indicate that whereas 74,5% of the firms use full cost for pricing their products, only 25,5% use variable costs. The research provides evidence that supports the size of the company, product type, stage in product lifecycle, materiality of fixed overhead costs and the objectives of the company as significant variables influencing the choice of the cost base for product pricing.

This paper examines the relationship between farm-level variables related to cash flow and premium rates on federal crop insurance coverage selection.

Using farm-level data from the Agricultural Resource Management Survey (ARMS), the authors estimate a linear fixed effects model to evaluate the relationship between farm-level and regional variables and federal crop insurance coverage selections.

The authors find evidence indicating that expected cash flow plays an important role in coverage level decisions. For example, variables directly related to cash flow, such as higher costs, are associated with significant differences in coverage level selection, though the direction of the association is dependent on the type of costs, whether fixed or variable, while higher revenue higher acreage farms insure at higher coverage levels. In addition, higher premium costs are associated with lower coverage level selections, despite subsidy incentives.

This is the first paper that identifies a potential solution to the puzzling finding that farmers do not consistently maximize coverage level. This research points to the influence of credit constraints as playing a role in limiting coverage level selections.

The purpose of this paper is to help shippers determine a negotiation yardstick for transportation price and formulate wise transportation outsourcing strategies by examining the presence of freight rate differentials for shippers and identifying their main causes. This paper also develops a framework for benchmarking freight rates based on the actual data.

This paper proposes an additive dummy regression model to determine a statistical significance in shipping charges between different shippers. Unlike the traditional least square analysis, the proposed model is designed to avoid a biased assessment of the impact of an explanatory variable.

Through a series of empirical data analysis and hypothesis tests, the authors discovered that the fixed portion (minimum base charge) of shipping charges differed depending on the shipper’ individual contract, while the variable portion (fuel or accessorial charge) of shipping charges remained the same regardless of the shipper’s individual contract. As such, shippers who are unaware of flexible but unpredictable transportation pricing practices and unprepared for freight rate negotiation can suffer from higher shipping costs as compared to their peers. Thus, the authors conclude that the success of transportation outsourcing, carrier selection, and freight rate negotiation strategies tends to rest on the shipper’s ability to understand transportation cost structures and then determine the benchmark freight rate considered “fair” and “reasonable” for a given service.

This paper is one of the first to examine shipping cost differentials between different shippers and determine what causes such differentials. In doing so, this paper attempted to assess the potential impact of freight rate negotiation and carrier selection strategies on shippers’ transportation costs in current deregulatory environments where shippers were given a greater freedom to negotiate freight rates with carriers and an increased opportunity to save their transportation costs.