Analysing and reducing customer defections

Firms can grow businesses by attracting new customers, losing fewer customers and doing more business with existing customers. Keeping your present customers and doing more business with them is generally a more efficient way of using resources. It requires a detailed analysis of customer defections to assess the effects of losing customers on long-term profitability and growth. This article provides some simple but powerful graphical analysis tools to use in customer defections analysis. The tools are initially described using the simple case of a service firm to show how managers can examine the probability of defections and the resulting need to attract new customers. Then the techniques are illustrated graphically using data from a UK subsidiary of an American concern which supplies equipment to large organizations. The analysis of customer defections is summarized in a sixstage process.     

How French industry plans

This paper presents briefly the results of an empirical study on long-range forecasting conducted in large French corporations. It demonstrates that forecasting differs quite widely according to its technical, economic or social nature.     

Maximum Penalized Likelihood Estimation in a Gamma-Frailty Model

The shared frailty models allow for unobserved heterogeneity or for statistical dependence between observed survival data. The most commonly used estimation procedure in frailty models is the EM algorithm, but this approach yields a discrete estimator of the distribution and consequently does not allow direct estimation of the hazard function. We show how maximum penalized likelihood estimation can be applied to nonparametric estimation of a continuous hazard function in a shared gamma-frailty model with right-censored and left-truncated data. We examine the problem of obtaining variance estimators for regression coefficients, the frailty parameter and baseline hazard functions. Some simulations for the proposed estimation procedure are presented. A prospective cohort (Paquid) with grouped survival data serves to illustrate the method which was used to analyze the relationship between environmental factors and the risk of dementia.     

Education,Mobility and Employers’ Monopsony Power: A Search‐theoretic Analysis

Abstract. We analyse the efficiency of schooling choices in a wage‐posting search equilibrium model with on‐the‐job search. The workers have multidimensional skills and the search market is segmented by technology. Education determines the scope — or adaptability— of individual skills. Individuals obtain schooling to leave unemployment more quickly and to climb the wage ladder rapidly through job‐to‐job mobility — that is, to speed up job shopping. Education reduces firms’ monopsony power in the wage determination by improving workers’ mobility. As a result, the wage distribution shifts rightward with aggregate schooling. However, the ratio of vacant jobs to job seekers also falls in each sector. Either one or the other externality may dominate, implying, respectively, under‐ or over‐education. A combination of minimum wage and schooling fee can decentralize the efficient allocation.     

Impact of a multidimensional intervention programme applied to families at risk for child neglect

The purpose of this study is to evaluate the effects of an intervention programme applied to families at risk for child neglect. Twenty‐nine families were recruited through a Local Community Services Centre (LCSC) and were assigned to two groups: (1) the first group participated in a multidimensional eco‐systemic intervention programme called the Personal, Family and Community Help Program (PFCHP); and (2) the second group underwent psychosocial intervention that was provided as part of regular LCSC services and focused mainly on the social worker–family relationship. Pre‐test measures were obtained at the beginning of intervention for both groups and a follow‐up was held 24 months later. Quantitative and qualitative analyses indicated that both forms of intervention were associated with improved parent–child relationship and the reduction of parental stress, depression and the potential for child abuse and neglect. However, PFCHP participants showed multiple indications of improvement in their social and marital relationships, which was not the case for LCSC participants. The conclusion outlines the need for a long‐term intervention process for families at high risk for child neglect and the necessity of addressing multiple dimensions of family life if lasting changes are to be expected. Copyright 2000 John Wiley & Sons, Ltd.     

Estimating and Testing Structural Changes in Multivariate Regressions

This paper considers issues related to estimation, inference, and computation with multiple structural changes that occur at unknown dates in a system of equations. Changes can occur in the regression coefficients and/or the covariance matrix of the errors. We also allow arbitrary restrictions on these parameters, which permits the analysis of partial structural change models, common breaks that occur in all equations, breaks that occur in a subset of equations, and so forth. The method of estimation is quasi‐maximum likelihood based on Normal errors. The limiting distributions are obtained under more general assumptions than previous studies. For testing, we propose likelihood ratio type statistics to test the null hypothesis of no structural change and to select the number of changes. Structural change tests with restrictions on the parameters can be constructed to achieve higher power when prior information is present. For computation, an algorithm for an efficient procedure is proposed to construct the estimates and test statistics. We also introduce a novel locally ordered breaks model, which allows the breaks in different equations to be related yet not occurring at the same dates.     

Informed sub-sampling MCMC: approximate Bayesian inference for large datasets

Statistics and Computing - This paper introduces a framework for speeding up Bayesian inference conducted in presence of large datasets. We design a Markov chain whose transition kernel uses an...     

The min-up/min-down unit commitment polytope

The min-up/min-down unit commitment problem (MUCP) is to find a minimum-cost production plan on a discrete time horizon for a set of fossil-fuel units for electricity production. At each time period, the total production has to meet a forecast demand. Each unit must satisfy minimum up-time and down-time constraints besides featuring production and start-up costs. A full polyhedral characterization of the MUCP with only one production unit is provided by Rajan and Takriti (Minimum up/down polytopes of the unit commitment problem with start-up costs. IBM Research Report, 2005). In this article, we analyze polyhedral aspects of the MUCP with n production units. We first translate the classical extended cover inequalities of the knapsack polytope to obtain the so-called up-set inequalities for the MUCP polytope. We introduce the interval up-set inequalities as a new class of valid inequalities, which generalizes both up-set inequalities and minimum up-time inequalities. We provide a characterization of the cases when interval up-set inequalities are valid and not dominated by other inequalities. We devise an efficient Branch and Cut algorithm, using up-set and interval up-set inequalities.     

Optimal fertility under age-dependent labour productivity

In the so-called Rapport Sauvy (1962), the French demographer Alfred Sauvy argued that Wallonia’s fertility rate was socially suboptimal, and recommended a 20 % rise of fertility, on the grounds that a society with too low a fertility leads to a low-productive economy composed of old workers having old ideas. This paper examines how Sauvy’s intuition can be incorporated in the Samuelsonian optimal fertility model (Samuelson, Int Econ Rev 16:531–538, 1975). We build a four-period OLG model with physical capital and with two generations of workers (young and old), the skills of the latter being subject to some form of decay. We characterize the optimal fertility rate and show that this equalizes, at the margin, the sum of the capital dilution effect (Solow effect) and the labour age-composition effect (Sauvy effect) with the intergenerational redistribution effect (Samuelson effect). Numerical simulations show that it is hard, from a quantitative perspective, to reconcile Sauvy’s recommendation with facts. This leads us to examine other potential determinants of optimal fertility, by introducing technological progress and a more general social welfare function.