Search results

Globalization has provided excellent opportunities for the global manufacturing community together with a stringent barrier on cost control. Target costing has emerged as one of the main tools in aiding the manufacturers to be globally competitive. This paper analyses the effect of tools such as quality function deployment (QFD) and value engineering (VE) on target costing and explores the way in which these tools assist in achieving the target cost. The target costing model developed by Cooper and Slagmulder (Cooper, R. and Slagmulder, R., Target Costing and Value Engineering, Productivity Press, New York, NY, 1997) has been modified and tools such as QFD and VE have been incorporated in the model. Due to inherent uncertainties in the associated cost of various elements, the model has been further strengthened with the use of fuzzy logic. The theoretical model developed was implemented in an Indian auto component manufacturing company and the results were analysed. Target costing significantly relies upon QFD and VE for its effective implementation. Uncertainty in cost estimation plays a significant role in the target costing process since any variation in cost violates the cardinal rule of target costing, “the target cost should never be exceeded”. Fuzzy logic plays a vital role in accounting for uncertainty in the target costing process and gives a different perspective to arrive at the function cost. A functional approach (VE) combined with QFD backed by fuzzy approach appears to work effectively for a target costing process that is evidenced from the case study. It appears that the model developed will work satisfactorily for an industrial product and the validity of the model for fast moving consumer goods has to be ascertained.

Target cost contracts are growing in popularity but concerns remain about the interplay between fee, target, sharing ratios and the final price. This paper offers a fundamental analysis of the principles under‐pinning target contracts. It shows that there is scope for manipulation of tenders and that suboptimal methods of tender evaluation are in use. The paper analyses both fixed fee and percentage fee contracts. Methods of tender evaluation are proposed that will both reduce the scope for manipulation by tenderers and increase the likelihood of the contract being awarded to the tenderer whose final price will be the lowest. The analysis reveals a strong case for setting the contractor's share of cost overrun or underrun at a value that is not less than 50%. Finally, the paper proposes two simplifications that would reduce the number of variables in target cost contracts of the future. One is for the employer to set the fee and the other requires only that a target be tendered but with the fee built into it.

The purpose of this paper is to explain the results of a June 18, 2009 Joint US Department of Labor‐Securities and Exchange Commission hearing regarding Target Funds as investment options for individual and company‐sponsored retirement plans.

The paper explains the background of Target Funds, the meaning of “target” dates and “glide paths,” the popularity of Target Funds with investors, recent losses suffered by Target Funds, areas of confusion among investors and plan sponsors such as fund naming conventions and differing target date strategies, asset allocation strategies, and glide paths; improvements in disclosure that are needed; possible problems with proprietary funds; and the prospects for new SEC and DOL regulations.

Given the extensive use of Target Funds as an investment option in retirement plans, particularly as a safe harbor “default” option, the SEC and DOL are expected to promulgate regulations governing some aspects of Target Funds, in order to protect investors by providing greater disclosure, especially regarding the glide path.

The paper provides practical guidance by experienced employee benefits, executive compensation, financial services and private funds lawyers.

This paper aims to analyzes merger, firm, and country characteristics that may explain the root causes of long‐term executive instability in target company top management teams.

Mergers involve two different groups of executives – executives in place at the time of the acquisition (“incumbents”) and those brought into the target after the acquisition (“new‐hires”). In order to understand why many target companies experience long‐term instability in their top management teams, patterns of turnover in these two distinct groups were analyzed over a 17‐year period in 730 target companies.

Analysis of the data revealed that a range of factors create conditions in target companies that lead to prolonged leadership instability. Different deal types such as tender offers, hostile takeovers, divestitures, and leveraged buyouts, the nature of merger negotiations, growth and profitability of the target company, headquarters location of the acquirer–whether foreign or domestic, and foreign investment experience of the acquirer all lead to significantly higher turnover rates for both incumbent and new‐hire executives. These effects may continue for ten or more years after the acquisition.

Acquisitions create instability within target company top management teams. This instability can be traced back to conditions that existed at the time of the merger. Organizations involved in mergers and acquisitions (M&As) might leverage these new insights to more effectively deal with leadership issues early in the post‐merger integration process. This may be an important first step in reestablishing long‐term leadership continuity in acquired firms.

This research is the first to provide insight into the root causes of long‐term leadership instability in target companies. It is also the first to examine the effects of M&As on executives who join a company several years after its acquisition. Future research by the author will report on the relationship between leadership stability and long‐term performance in target companies. A deeper understanding of this relationship may provide new insights into why so many M&As fail.

The purpose of this paper is to evaluate the detection performance of infrared photoelectric detection system and establish stable tracking platform.

This paper puts forward making use of the finite element analysis method to set up the infrared radiation characteristics calculation model of flying target in infrared photoelectric detection system; researches the target optical characteristics based on the target imaging detection theory; sets up the heat balance equation of target’s surface node and gives the calculation method of total radiation intensity of flying target; and deduces the target detection distance calculation function; studies the changed regulation of radiation energy that charge coupled device (CCD) gain comes from target surface infrared heat radiations under different sky background luminance and different target flight attitude.

Through calculation and experiment analysis, the results show that when the target’s surface area increases or the target flight velocity is higher, the radiation energy that CCD obtained is higher, which is advantageous to the target stable detection in infrared photoelectric detection system.

This paper uses the finite element analysis method to set up the infrared radiation characteristics calculation model of flying target and give the calculation and experiment results; those results can provide some data and improve the design method of infrared photoelectric detection system, and it is of value.

Radar is a useful instrument to get target information in restricted visibility and night navigation. If there are many similar targets in a close area, navigators sometimes make errors in recognizing the radar’s target direction when they find the targets in a seascape using radar information. They sometimes indicate other targets instead of their intended target by mistake. We must prevent the errors, to reduce accidents and improve safe navigation. The purpose of this paper is to investigate why navigators make mistakes when identifying the direction between the radar’s target echo on the display and the actual vessel in the seascape. We tackle this problem in three steps: 1) we propose a navigator’s radar target cognitive model; 2) we evaluate the errors of the radar target cognition and its indication in the seascape and 3) we discuss the errors with the parallax.

We empirically investigate the hypothesis that the less transparent (more difficult to value) the target’s assets are the more likely it is that the acquiring firm can obtain higher short- and long-term returns. We analyze a sample of 1,538 friendly acquisitions partitioned in two separate dimensions: acquisitions of public versus private firms, and acquisitions of a firm’s assets versus acquisitions of a firm’s assets and its management. Using a sample of (nondiversifying) real estate transactions with a public REIT as the acquirer, we find that acquisitions of public firms have insignificant short-term abnormal returns. Acquisitions of private targets have positive and significant short-term abnormal returns. The acquirer’s abnormal returns are higher in both cases when the transactions involve acquisition of the target firm’s management. We find parallel results when analyzing the acquirer’s Q over the merger year and the three following years. Our conclusions are robust to the type of financing (cash, stock, or a combination) used in the acquisition.

We examine the market valuation of targets with multiple large shareholders (MLS) and single large shareholder (SLS) structures, in an international sample of M&A announcement in 19 countries outside North America. We find that the presence and power of MLS in these firms are negatively associated with abnormal returns and first-bid-to-merger-completion returns, suggesting that MLS mitigate agency problems in the target, and hence their acquisition is perceived as “a loss of good governance.” The negative association between MLS targets and returns is stronger in widely held firms suggesting that MLS indeed curb expropriation of minority shareholders. By contrast, when the second largest shareholder in the MLS structure of the target is a family, we find positive cumulative abnormal returns at the merger announcement, suggesting exacerbated agency problems in these firms that should benefit from the “acquisition of good governance.” Our evidence is robust to a battery of tests and to addressing potential endogeneity.

We consider conditions under which firms hire an intermediary advisor in acquisition deals. Although acquirers pay large advisory fees to investment banks for their assistance in acquisitions, we know little about the conditions under which acquirers form a relationship with an investment bank for an acquisition deal. Specifically, we examine the role of overall acquisition experience, acquisition experience specific to the target’s industry, prior relationship-specific experience, and deal size in relationship formation and continuation. We test their hypotheses using a dataset of US-based acquirers and targets between 1991 and 2015. Our findings provide nuanced insights into the role of acquisition experience for acquirer–investment bank pairing up on acquisition deals.

Building upon the framework of the tradeoff model of capital structure and motivated by the equity market timing theory, we examine whether equity misvaluation is a source of adjustment “costs” that will affect a firm’s leverage adjustment speed toward target. We also investigate whether the quality of a firm’s long-term growth options will influence the decisions of managers to exploit the mispriced equity to converge to the optimum. Using a sample of listed Taiwanese firms during 1992–2014 and employing the market-to-book decomposition as developed by Rhodes-Kropf, Robinson, and Viswanathan (2005), we find that overleveraged and overvalued firms demonstrate faster adjustment speed than overleveraged but undervalued firms. Furthermore, controlling for the misvaluation status, high-growth firms converge to target faster than their low-growth counterparts. The effect of growth options on the relation between equity mispricing and adjustment speed does not mirror the effect of financing deficits. With the detailed financial information of the local companies across a rather long time series, this study provides incremental inputs to the literature of capital structure from the determinants of target leverage, the estimation of leverage adjustment speeds, to the identification of the sources of adjustment costs in an emerging market where institutional environment is strikingly different from the US.