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Article

Younès Mouatassim

The purpose of this paper is to introduce the zero‐modified distributions in the calculation of operational value‐at‐risk.

Abstract

Purpose

The purpose of this paper is to introduce the zero‐modified distributions in the calculation of operational value‐at‐risk.

Design/methodology/approach

This kind of distributions is preferred when excess of zeroes is observed. In operational risk, this phenomenon may be due to the scarcity of data, the existence of extreme values and/or the threshold from which banks start to collect losses. In this article, the paper focuses on the analysis of damage to physical assets.

Findings

The results show that basic Poisson distribution underestimates the dispersion, and then leads to the underestimation of the capital charge. However, zero‐modified Poisson distributions perform well the frequency. In addition, basic negative binomial and its related zero‐modified distributions, in their turn, offer a good prediction of count events. To choose the distribution that suits better the frequency, the paper uses the Vuong's test. Its results indicate that zero‐modified Poisson distributions, basic negative binomial and its related zero‐modified distributions are equivalent. This conclusion is confirmed by the capital charge calculated since the differences between the six aggregations are not significant except that of basic Poisson distribution.

Originality/value

Recently, the zero‐modified formulations are widely used in many fields because of the low frequency of the events. This article aims to describe the frequency of operational risk using zero‐modified distributions.

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Article

Loganathan Appaia and Shalini Kandaswamy

The purpose of this paper is to determine single sampling plans (SSPs) by attributes when the number of nonconformities is distributed according to a zero-inflated Poisson…

Abstract

Purpose

The purpose of this paper is to determine single sampling plans (SSPs) by attributes when the number of nonconformities is distributed according to a zero-inflated Poisson (ZIP) distribution.

Design/methodology/approach

Manufacturing processes have now-a-days been aligned properly and are monitored well, so that the occurrence of nonconformities would be a rare phenomenon. The information related to number of nonconformities per product will have more number of zeros. Under such circumstances, the appropriate probability distribution of the number of nonconformities is a ZIP distribution. The operating characteristic function of the sampling plan is derived.

Findings

Parameters of the sampling plans are obtained for some sets of values of (p 1, α, p 2, β). Numerical examples are given to illustrate the selection of SSPs under ZIP distribution and to study its advantages over Poisson SSP.

Originality/value

Results obtained in this paper are original and has been done for the first time in this regard. Parameters of the sampling plans are essential to make decisions either to accept or reject the lots based on the inspection of the samples.

Details

International Journal of Quality & Reliability Management, vol. 31 no. 9
Type: Research Article
ISSN: 0265-671X

Keywords

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Article

Hideo Owan, Tsuyoshi Tsuru and Katsuhito Uehara

Under a discontinuous and nonlinear compensation scheme, which is prevalent among car dealerships, the amount of a salesperson’s expected daily commission depends…

Abstract

Purpose

Under a discontinuous and nonlinear compensation scheme, which is prevalent among car dealerships, the amount of a salesperson’s expected daily commission depends primarily on his position in the pay schedule on the day he makes a sale. Salespeople thus vary their efforts and adopt a different pricing strategy week by week, or even day by day. The purpose of this paper is to examine the incentive effect of such a nonlinear scheme and provide the evidence that salespeople’s behavior is consistent with the theory.

Design/methodology/approach

The authors conduct regression analyses using the transaction data provided by two North American auto dealerships. The authors construct a daily measure of varying incentive intensity and evaluate its impact on the distribution of individual daily sales and the dealership’s gross profit rate.

Findings

The authors find that the daily measure of varying incentive intensity has a positive effect on the distribution of individual daily sales and a negative impact on the dealership’s gross profit rate. The results suggest that: salespeople adjust their effort levels in response to the intensity of incentives; and they game the system by lowering the prices when the marginal return to doing so is high.

Research limitations/implications

The study shows that there is a high cost associated with the discontinuous nonlinear pay scheme, raising the question of why many auto dealerships use it.

Originality/value

This paper sheds light on the undesirable aspects of discontinuous and nonlinear incentive schemes, varied performance and gaming, by quantifying the effects of the worker’s behavior.

Details

Evidence-based HRM: a Global Forum for Empirical Scholarship, vol. 3 no. 3
Type: Research Article
ISSN: 2049-3983

Keywords

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Article

Henrique Ewbank, José Arnaldo Frutuoso Roveda, Sandra Regina Monteiro Masalskiene Roveda, Admilson ĺrio Ribeiro, Adriano Bressane, Abdollah Hadi-Vencheh and Peter Wanke

The purpose of this paper is to analyze demand forecast strategies to support a more sustainable management in a pallet supply chain, and thus avoid environmental impacts…

Abstract

Purpose

The purpose of this paper is to analyze demand forecast strategies to support a more sustainable management in a pallet supply chain, and thus avoid environmental impacts, such as reducing the consumption of forest resources.

Design/methodology/approach

Since the producer presents several uncertainties regarding its demand logs, a methodology that embed zero-inflated intelligence is proposed combining fuzzy time series with clustering techniques, in order to deal with an excessive count of zeros.

Findings

A comparison with other models from literature is performed. As a result, the strategy that considered at the same time the excess of zeros and low demands provided the best performance, and thus it can be considered a promising approach, particularly for sustainable supply chains where resources consumption is significant and exist a huge variation in demand over time.

Originality/value

The findings of the study contribute to the knowledge of the managers and policymakers in achieving sustainable supply chain management. The results provide the important concepts regarding the sustainability of supply chain using fuzzy time series and clustering techniques.

Details

Journal of Enterprise Information Management, vol. 33 no. 5
Type: Research Article
ISSN: 1741-0398

Keywords

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Article

Fernando Rojas and Victor Leiva

The objective of this paper is to propose a methodology based on random demand inventory models and dependence structures for a set of raw materials, referred to as…

Abstract

Purpose

The objective of this paper is to propose a methodology based on random demand inventory models and dependence structures for a set of raw materials, referred to as “components”, used by food services that produce food rations referred to as “menus”.

Design/methodology/approach

The contribution margins of food services that produce menus are optimised using random dependent demand inventory models. The statistical dependence between the demand for components and/or menus is incorporated into the model through the multivariate Gaussian (or normal) distribution. The contribution margins are optimised by using probabilistic inventory models for each component and stochastic programming with a differential evolution algorithm.

Findings

When compared to the non-optimised system previously used by the company, the (average) expected contribution margin increases by 18.32 per cent when using a continuous review inventory model for groceries and uniperiodic models for perishable components (optimised system).

Research limitations/implications

The multivariate modeling can be improved by using (a) other non-Gaussian (marginal) univariate probability distributions, by means of the copula method that considers more complex statistical dependence structures; (b) time-dependence, through autoregressive time-series structures and moving average; (c) random modelling of lead-time; and (d) demands for components with values equal to zero using zero-inflated or adjusted probability distribution.

Practical implications

Professional management of the supply chain allows the users to register data concerning component identification, demand, and stock levels to subsequently be used with the proposed methodology, which must be implemented computationally.

Originality/value

The proposed multivariate methodology allows it to describe demand dependence structures through inventory models applicable to components used to produce menus in food services.

Propuesta

Este trabajo propone una metodología basada en modelos de inventarios con demanda aleatoria y estructura de dependencia para un conjunto de materias primas, denominadas “componentes”, usadas por servicios de alimentación que producen raciones alimenticias denominadas “menús”.

Diseño/Metodología

Los margen de contribución de servicios de alimentación que producen menús son optimizados empleando modelos de inventarios con demandas aleatorias dependientes. La dependencia estadística entre demandas de componentes y/o menús es incorporada en el modelado mediante la distribución gaussiana (o normal) multivariada. La optimización de los márgenes de contribución se logra usando modelos de inventarios probabilísticos para cada componente y programación estocástica mediante el algoritmo de evolución diferencial.

Resultados

El margen de contribución esperado (promedio) aumenta en un 18,32% usando modelos de inventario de revisión continua para abarrotes y modelos uniperiódicos para componentes perecederos (sistema optimizado), en relación al sistema no optimizado usado anteriormente por la compañía.

Originalidad

La metodología multivariada propuesta permite describir estructuras de dependencia de la demanda mediante modelos de inventario aplicables a componentes usados para producir menús en servicios de alimentación.

Implicancias prácticas

Una administración profesional de la gestión de la cadena de suministros permite registrar datos de la identificación del componente, su demanda y sus niveles de stock para ser usados posteriormente con la metodología propuesta, la que debe estar implementada computacionalmente.

Limitaciones

El modelado multivariado puede ser mejorado (a) utilizando distribuciones probabilísticas univariadas (marginales) distintas a la gaussiana, mediante métodos de cópulas que recojan estructuras de dependencia estadística más complejas; (b) considerando demandas de componentes con valores iguales a cero, mediante distribuciones probabilísticas infladas en cero; (c) usando dependencia temporal, mediante estructuras de series de tiempo autorregresivas y de media móvil, y (d) modelando el lead-time en forma aleatoria.

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Article

Xinzhong Li and Seung-Rok Park

The purpose of this paper is to indicate trade characteristics of Foreign direct investment (FDI) inflows in China and examine the dynamic interaction between FDI inflows…

Abstract

Purpose

The purpose of this paper is to indicate trade characteristics of Foreign direct investment (FDI) inflows in China and examine the dynamic interaction between FDI inflows and China’s international trade through empirical analysis.

Design/methodology/approach

At first, this paper builds the probability distribution model (Poisson and negative binomial (NB)) to capture the characteristics of spatial distribution of all kinds of FDI firms in Chinese cities and provinces based on count data, so as to indicate the potentials for further introducing FDI inflows in China; Second, this paper investigates the effects of trade on FDI firms inflows based on probability regress model (Binary Logit, Tobit, NB, Poisson, zero inflated negative binomial) and shows how international trade accelerates the different kinds of FDI firms to agglomerate in Eastern, Middle and Western region by the endowments of factors; third, this paper empirically examines the magnitude and characteristics of trade effects generated by FDI inflows by building dynamic panel model based on continuous data.

Findings

First, statistical tests of probability distribution model based on count data show that there are characteristics of spatial agglomeration of FDI firms such as manufacture firm, R & D firm, managing and marketing firm and total sectors, which obey NB distribution as whole; Second, this study indicate that FDI inflows have strong positive effects on the international trade in China’s provinces and on China’s regional trade, and that most of foreign firms in China are export oriented being strongly characterized as labor-intensive industries, especially, contributions of FDI to imports are greater than the contributions of FDI to exports in China’s Middle and Western trade, and the growth of FDI trade in China’s trade volume has been strong over the past years; third, the empirical results of models based on count data and continuous data indicate that FDI inflows have significantly positive relationship with international trade, that is, the relationship between FDI and international trade in the case of China is the characteristics with complement and imports substituting relationship.

Research limitations/implications

Because of mixed data set for FDI inflows of processing and assembling trade and production-oriented FDI, efficiency-seeking and knowledge or technology – intensive FDI inflows in the past 36 years, the paper only investigate characteristics of FDI inflows in China before the turning point of financial crisis, but it is important for capturing the whole picture of trade characteristics of FDI inflows in China.

Practical implications

The derived quantitative results imply that there are still greater potentials for further introducing FDI inflows in China, and decision-maker should make policy of introducing FDI inflows which are favorable to supporting innovative activities and economic agglomeration, and preferably encourage efficiency-seeking and export-oriented FDI inflows so as enhance quality and efficiency of economic growth, which are also helpful to accelerate upgrade of Chinese industry and gradually shorten gap of growth among Eastern, Middle and Western region.

Social implications

FDI inflows in China not only stimulate the remarkable growth of bilateral trade between host country and home country, but also promote the growth of international trade between China and the rest of the world. Thus, policies of bilateral or multilateral free-trade and investment area should be encouraged, which will be also favorable to promote the growth and welfare in all the regions.

Originality/value

This paper demonstrates that spatial distributions of FDI firms in Chinese cities and provinces obey NB probability distribution pattern, and puts forward the methodology of model based on count data and continuous data. Besides, this paper quantitatively indicates trade characteristics of FDI inflows in China as well as the dynamic interaction between FDI inflows and China’s international trade.

Details

China Finance Review International, vol. 6 no. 2
Type: Research Article
ISSN: 2044-1398

Keywords

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Article

Wan Li and Liang Wang

The purpose of this paper is to provide a better understanding of what drives firms’ choice between exploration alliances and exploitation alliances by examining the role…

Abstract

Purpose

The purpose of this paper is to provide a better understanding of what drives firms’ choice between exploration alliances and exploitation alliances by examining the role of organizational slack and its interaction with market uncertainty.

Design/methodology/approach

An empirical study is conducted based on 1,614 alliances formed by 581 US biotechnology firms, and the hypotheses are tested using a zero-inflated multilevel Poisson model.

Findings

The results indicate that firms’ strategic choice to pursue exploration or exploitation alliances is a reflection of organizational intention and adaptation to environmental turbulence. More specifically, firms with more financial slack tend to form more exploration alliances and fewer exploitation alliances. However, under high market uncertainty, firms with financial slack tend to establish more exploitative partnerships and avoid exploration collaborations.

Originality/value

This paper contributes to the literature on exploration–exploitation alliances, which tends to fall short of providing an understanding of why organizations pursue such alliances. By identifying the impact of organizational slack and its interaction with market uncertainty, this study shows that organizations are able to respond to environmental change, and those with capabilities are likely to craft their strategic choice configurations based on their own characteristics.

Details

Management Decision, vol. 57 no. 11
Type: Research Article
ISSN: 0025-1747

Keywords

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Book part

John Geweke

Bayesian A/B inference (BABI) is a method that combines subjective prior information with data from A/B experiments to provide inference for lift – the difference in a…

Abstract

Bayesian A/B inference (BABI) is a method that combines subjective prior information with data from A/B experiments to provide inference for lift – the difference in a measure of response in control and treatment, expressed as its ratio to the measure of response in control. The procedure is embedded in stable code that can be executed in a few seconds for an experiment, regardless of sample size, and caters to the objectives and technical background of the owners of experiments. BABI provides more powerful tests of the hypothesis of the impact of treatment on lift, and sharper conclusions about the value of lift, than do legacy conventional methods. In application to 21 large online experiments, the credible interval is 60% to 65% shorter than the conventional confidence interval in the median case, and by close to 100% in a significant proportion of cases; in rare cases, BABI credible intervals are longer than conventional confidence intervals and then by no more than about 10%.

Details

Topics in Identification, Limited Dependent Variables, Partial Observability, Experimentation, and Flexible Modeling: Part B
Type: Book
ISBN: 978-1-83867-419-9

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Article

Kevin C. Banning

In the context of increasing consolidation in the banking industry, this research examined one of the motives for bank acquisitions and the kinds of acquisitions made by…

Abstract

In the context of increasing consolidation in the banking industry, this research examined one of the motives for bank acquisitions and the kinds of acquisitions made by banking firms. The effect of ownership concentration was tested on the absolute level of bank acquisitions and the average degree of geographic‐market overlap of these acquisitions. In a sample of 156 banking firms, banks featuring dispersed ownership were found to acquire other banks with less market‐overlap than did banking firms with concentrated ownership. However, ownership concentration was not a significant predictor of the absolute level of merger activity. Implications of these differences in acquisition strategies are explored.

Details

The International Journal of Organizational Analysis, vol. 7 no. 2
Type: Research Article
ISSN: 1055-3185

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Book part

Heather E. Price

Purpose – Organizational and work studies consistently find an interrelationship between employees' relationships with coworkers to their morale, as indicated by their…

Abstract

Purpose – Organizational and work studies consistently find an interrelationship between employees' relationships with coworkers to their morale, as indicated by their satisfaction and commitment levels. This same research shows organizational climate, as indicated by levels of trust and shared values and norms in the organization, strongly benefiting from satisfied and committed employees.Methodology/approach – This chapter concretizes workplace relationships using multipanel network data from 15 Indianapolis charter school teachers.Findings – With these data, network traits related to network cohesion, strong ties, and in-group identity identified as central processes undergirding affective relationships are directly tested. A feedback loop between organizational climate and employee morale, where both mutually reinforce the other, is also discussed.Implications – These findings show that affective relationships with coworkers improve employee morale and organizational climate.

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