The surprising effectiveness of earliest operation due-date sequencing

In make-to order production, schedule reliability is very important but still not sufficiently accomplished in industrial practice by the vast majority of companies. It has been known for long that processing the orders at a workstation in the order of their operation due-dates can compensate for lateness in the arrival at the workstation within certain boundaries. The paper analyses the effectiveness of earliest operation due date (EODD) sequencing by comparing it to an optimistic theoretical boundary. The surprising result is that EODD can nearly fully exploit the theoretical potential. It should therefore be used in practice whenever schedule reliability is important, with only few exceptions. Its effectiveness though is increasing with the workstation’s WIP level and thus is in conflict with the objective to reduce WIP levels and throughput times. A simple forecasting model allows to assess the extent to which lateness can be compensated by EODD sequencing and which schedule compliance can be achieved.     

Decision model for product rollover in manufacturing operations

The purpose of this study is to investigate critical decisions when planning for product rollover at a manufacturing company, and how to organise these decisions. A literature review and a case study are used to develop a decision model. The findings indicate that product rollover can be organised in a five-phase decision model. The research quality is strengthened by a structured literature review, but it can be argued that more empirical research is needed for validation. For researchers, this paper contributes with the identification of critical decisions and a model for product rollover. For practitioners, the study highlights the need to acknowledge the importance of product rollover and its role as a competitive weapon. In earlier studies, product rollover has mainly been investigated from a market perspective, so that this study contributes by investigating the issue from a manufacturing perspective.     

Investorenreaktionen auf die Fair Value-Bilanzierung von Verbindlichkeiten nach IFRS – eine experimentelle Untersuchung

The fair value-option in IAS 39 allows fair value measurement for liabilities. It is often criticized that a change in a company’s own credit risk affects the value of its liabilities. Therefore it is doubtful whether the fair value-option is in fact useful for investors’ decision making process. Due to a lack of empirical studies concerning the understandability and the decision usefulness of the fair value-option, this paper contains the results of an experimental investigation. We find that investors are misled by fair values for liabilities, though under some circumstances they learn to interpret the financial data correctly. We compare fair value measurement of liabilities with an accounting treatment based on German GAAP.     

Measuring servitization progress and outcome: the case of ‘advanced services’

The purpose of this paper is to establish a framework for assessing the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’ – a complex bundling of products and services, whereby manufacturers offer capabilities and outcomes instead of products alone. ‘Advanced services’ represent the most complex offering in the current servitization trend amongst manufacturers. However, current performance measures lack the breadth and focus to assess progress or outcomes, and so support research and practice of organisational transformation efforts required. To address this gap the paper investigates how a manufacturer’s efforts to become an ‘advanced services’ provider can be comprehensively measured, and develops a framework for assessing the transformation journey towards becoming an ‘advanced services’ provider. The research method is based on (1) a systematic literature review process to create a comprehensive set of service-related performance measures that are available to assess a manufacturer’s servitization efforts, followed by (2) an engagement with an expert panel to synthesise the identified measures and create a set of ‘advanced services’ performance measures. The proposed framework is presented as a scorecard that can be used in practice to assess the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’.     

CCR or BCC: what if we are in the wrong model?

The CCR model by Charnes et al. (Eur J Oper Res 2:429–444, 1978) together with the BCC model by Banker et al. (Manag Sci 30:1078–1091, 1984) are the most popular approaches of measuring efficiency among a group of decision making units, DMUs, in data envelopment analysis, DEA. The right choice of a DEA model—CCR or BCC—often, if not always, is a difficult decision. To evaluate a DMU’s efficiency for both models might be helpful, but it does not always capture the essential issues at stake. In this paper we propose a comparative analysis of both concepts: How does activity scaling under constant BCC-efficiency influence CCR-efficiency. And inversely, how does BCC-efficiency behave when activity scaling under constant CCR-efficiency is applied. Such findings of mutual effects improve a DMU’s ability to reassess upsizing and downsizing of activities. Moreover, it allows for exact calculations of the resulting economic effects, and these effects give new insights beyond classical DEA. Finally, scale efficiency turns out to be the ideal concept to control these activity changes, rather than just CCR- or BCC-efficiency. We use a little numerical example to emphasize advantages of the new concept and sketch the new findings for a theater scenery.     

Intensity, timeliness, and success of incumbent response to technological discontinuities: a synthesis and empirical investigation

The extant literature highlights numerous different factors influencing the timeliness and intensity of incumbent response to discontinuous technological change. However, this literature has so far not been synthesized and is therefore limited in its analytical, predictive, and normative power. We develop a comprehensive model of incumbent response that organizes different explanatory factors into the three distinct dimensions of (1) identification and interpretation, (2) decision making, and (3) organizational implementation. We also conceptualize how response intensity and timeliness affect business performance in new technological domains. We test the model against data from 320 firms from the German dental lab industry, finding substantial support for the majority of our hypotheses. This study offers unique empirical insight in observing that cognitive constructs such as framing and management flexibility have the strongest impact on both intensity and timeliness of incumbent response to technological, and thus, strategic discontinuities. Together, our findings have important implications for both theory and practice.     

Die Rolle des Luftverkehrsrechts und der Haftung bei Flugzeugkatastrophen: Eine Finanzmarktanalyse

Zusammenfassung  Rechtsansprüche gegen Fluggesellschaften und Flugzeughersteller in Folge einer Flugzeugkatastrophe richten sich nach einer Flut rechtlicher Bestimmungen, die aus internationalen Abkommen, Vereinbarungen zwischen Fluglinien sowie aus Bundes- und Landesrecht resultieren. Die jeweilige Rechtsgrundlage in einem spezifischen Fall h?ngt von verschiedenen Umst?nden ab, die mit einem Unfall verbunden sind. Es überrascht daher nicht, dass zugesprochene Schadensersatz- und Schmerzensgeldzahlungen an die Angeh?rigen der Opfer von Fall zu Fall erheblich divergieren. In unserer Studie mit U.S.-amerikanischen Daten untersuchen wir, inwieweit der kurz- und langfristige Erfolg von Fluggesellschaften und Flugzeugherstellern durch Flugzeugkatastrophen beeinflusst wird und wir eruieren diejenigen Determinanten, die Performanceunterschiede erkl?ren k?nnen. Verwandte Untersuchungen haben sich weitgehend auf Effekte für Markennamen oder steigende Versicherungspr?mien als Ursachen für Aktienkursverluste konzentriert. Unsere Ergebnisse zeigen darüber hinaus, dass das regulatorische Umfeld einer spezifischen Unglückssituation erheblichen Einfluss darauf hat, wie Finanzm?rkte reagieren. Die Reaktionen der Marktteilnehmer weisen darauf hin, dass die unterschiedlichen Berechnungsgrundlagen für die Opferentsch?digung recht klar erkannt werden.

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The role of aviation laws and legal liability in airplane accidents: A financial market perspective

Summary  Legal liability claims against airlines and airplane manufacturers following an aviation disaster are determined through a myriad of international treaties, intercarrier agreements, and federal and state laws. Which law applies in a specific situation depends on various circumstances surrounding the accident. As a result, pecuniary and non-pecuniary damage awards for the families of the accident victims may vary substantially from case to case. Using U.S. data, our study examines how aviation disasters affect the short and long-term performance of airlines and airplane manufacturers and explores the factors that drive the performance differences. While prior research has largely focused on brand name effects and rising insurance premiums as possible determinants of stock price losses, our results suggest that the regulatory environment that applies to a given aviation accident has a significant impact on how the market reacts to its announcement. Inequities in the valuation of a human life are clearly reflected in stock price reactions. While recent regime changes have helped eliminate some of these imbalances further reform may be necessary.

     

Trend effects on perceived avalanche hazard

Hazard-level forecasts constitute an important risk mitigation tool to reduce loss of economic values and human life. Avalanche forecasts represent an example of this. As for many other domains, avalanche risk is communicated using a color-coded, categorical risk scale aimed at informing the public about past, current, and future risk. We report the results from three experiments in which we tested if an irrelevant past trend in forecasted avalanche danger affects perceptions of current and future avalanche risk. Our sample consisted of individuals from three different populations targeted by national avalanche warning services. All three experiments showed that the perception of avalanche risk is influenced by the trend, but that the effect is opposite for perceptions of current and expectations of future avalanche risk. While future avalanche risk is extrapolated in the same direction as the change from the previous day, we found that perceived current risk appears to be based on an average of past and current risk. These effects diminish when we provide participants with a scale indicating the exact level of avalanche danger. For most of our measurement instruments, however, the effects remain significant. These results imply that targeted populations may consider historic information more than was intended by the sender. As such, our results have implications for both avalanche warning services and risk communication in general.