Strategy

This paper offers an exact definition of the value created by firms together with their suppliers and buyers. The "added value" of a firm is similarly defined, and shown under certain conditions to impose an upper bound on how much value the firm can capture. The key to a firm's achieving a positive added value is the existence of asymmetries between the firm and other firms. The paper identifies four routes ("value-based" strategies) that lead to tthe creation of such asymmetries. Our analysis reveals the equal importance of a firm's supplier and buyer relations.

Many sequential planning problems can be represented as a shortest path problem in an acyclic network. This includes all deterministic dynamic programs as well as certain stochastic sequential decision problems. In this article, we identify a large class of shortest path problems for which a general efficient algorithm for the simultaneous solution and detection of minimal forecast horizons is developed.

We derive efficient and highly accurate approximations for the customer waiting-time distributions experienced in stochastic economic lot scheduling systems (SELSPs) that are governed by general base-stock policies under a cyclic or more general periodic item sequence. SELSPs involve settings where several items need to be produced in a common facility with limited capacity, under significant uncertainty regarding demands, unit production times, setup times, or combinations thereof.

Theoretical work on financing costs under asymmetric information has linked shifts in firms' internal funds and investment spending, holding constant investment opportunities. An impediment to convincing tests of these models is the lack of firm-level data on the relative cost of internal and external funds. We use a tax experiment, the surtax on undistributed profits in the 1930s, to identify firms' relative cost of internal and external funds by calculating surtax margins.

The article presents a study using the Euler equation for capital accumulation by individual business firms. First, authors' use an estimation strategy based on the Euler equation representation of firms' investment decisions. This strategy reflects reservations with standard investment models based on the q theory with adjustment costs. In particular, there are well-known problems in measuring marginal q, as well as concerns that observed stock market valuations may not accord with the predictions of the efficient markets hypothesis.

In most dynamic planning problems, one observes that an optimal decision at any given stage depends on limited information, i.e. information pertaining to a limited set of adjacent or nearby stages. This holds in particular for planning problems over time, where an optimal decision in a given period depends on information related to a limited future time horizon, a so-called forecast horizon, only. In this paper we identify a general class of dynamic programs in which an efficient forward algorithm can be designed to solve the problem and to identify minimal forecast horizons.

This paper seeks to establish a parametric linkage between fuzzy set theoretic techniques and commonly used preference formation rules in psychology and marketing. Such a linkage helps to benefit both fields. We accomplish this objective by using a linear model with interaction term which nests many common preference protocols; conjunction (fuzzy and), disjunction (fuzzy or), counterbalance (fuzzy xor) and linear compensatory.

We model the effects of variety-seeking and marketing-mix variables on consumers' purchases of coffee using a nested logit model. We premise that on any given purchase occasion, the utilities of brands other than the one purchased on the previous occasion may be correlated due to the consumer's tendency to seek variety or to avoid variety. This results in a two-level hierarchical model where choice on any purchase occasion is conditioned on the brand purchased on the immediately preceding occasion.

This chapter examines the changing nature of interactions between government and private developer and the character of their joint projects. In particular, it examines the objectives of public/private development; the process involved in forming public/private partnerships; and the practical problems and policy issues associated with public/private development.