Risk Premiums and Benefit Measures for Generalized-Expected-Utility Theories

Standard tools for the analysis of economic problems involving uncertainty, including risk premiums, certainty equivalents and the notions of absolute and relative risk aversion, are developed without making specific assumptions on functional form beyond the basic requirements of monotonicity, transitivity, continuity, and the presumption that individuals prefer certainty to risk. Individuals are not required to display probabilistic sophistication. The approach relies on the distance and benefit functions to characterize preferences relative to a given state-contingent vector of outcomes. The distance and benefit functions are used to derive absolute and relative risk premiums and to characterize preferences exhibiting constant absolute risk aversion (CARA) and constant relative risk aversion (CRRA). A generalization of the notion of Schur-concavity is presented. If preferences are generalized Schur concave, the absolute and relative risk premiums are generalized Schur convex, and the certainty equivalents are generalized Schur concave.     

The Economic Value of a Sustainable Supply Chain

The economic rationale to operate a global supply chain in a sustainable manner is developed. Arguments are made based on marketing, finance, and production theories that by engaging in socially responsible behavior the firm will increase sales, decrease costs, reduce financial risk, and increase profits, which will ultimately increase returns to the firm's shareholders. A model is developed of the mechanism by which modern production methods such as lean production and quality management result in sustainable corporate behavior that, in the long run, translates into higher stock valuations. The production effects cause marketing and financial risk effects that are complementary, and all three channels of influence synergistically result in higher stock values in the model. These effects also provide important benefits to other stakeholders of the firms including employees, customers, the environment, and the community. An important ethical issue in global supply chains is working conditions in foreign plants often leading to allegations of sweatshop labor conditions. This issue is used to illustrate how lean production practices can affectconsumers, employees, and financial risk. Conclusions from the sweatshop labor issue are shown to apply to other sustainability issues as well.     

Pollsters, the Press, and Political Polling in Britain

This article reviews the history of political polls in Britainsince 1945, when the first such poll was conducted, and examinescurrent topical issues, including the relationship between themedia and the polls.     

Effects of Question Wording and Format on Political Attitude Consistency

Numerous studies in the past decade have suggested that theAmerican voter has become increasingly sophisticated, ideologically,and that this is due largely to the separate or combined impactof the growing educational attainments of the U.S. public andthe greater salience of politics in the 1960s and 1970s. Thisstudy, however, hypothesizes that much of the change might bedue to a simple methodological artifact—changes in questionwording and format—and reports data from a recent nationalexperiment which strongly supports such an interpretation. Thegeneralizations derived from The American Voter may, therefore,not be quite as "time-bound" as the current literature wouldlead us to believe.     

THE VALIDITY OF THE INDEPENDENT INCREMENTS ASSUMPTION FOR PRODUCTION: AN EMPIRICAL STUDY OF AN AUTOMOTIVE ASSEMBLY PLANT

In assembly plants, random line stoppages cause production variability. For analytic tractability and data availability, researchers commonly assume that the production process possesses the independent increments property (necessary for a process to be Poisson). If the production process has independent increments, then the production in any interval is independent of the production in any other nonoverlapping interval. This property means, for one thing, that the current period's production is never influenced by previous production periods. Intuition, however, suggests that current production could be correlated to past production-violating this assumption of independence. If production problems persist from one period to the next, then one would expect the production in adjacent time periods to be correlated. Although the independent increments property is oflen assumed, its validity has not been demonstrated in practice. We analyze data from an automotive assembly plant to assess the validity of the independent increments assumption for its production.     

BENCHMARKING MANUFACTURING PERFORMANCE IN THE SEMICONDUCTOR INDUSTRY

A methodology for benchmarking manufacturing practices in the worldwide semiconductor industry is presented. Several metrics for measuring semiconductor manufacturing performance are defined and discussed. Interviews conducted during site visits are used to identify the managerial, technical, and organizational practices underlying superior metric performance. Multivariate statistical analyses of the performance metric data indicate that these performance metrics measure independent aspects of performance and expose significant performance differences among fabs.     

AN OPTIMIZATION-BASED METHODOLOGY FOR RELEASE SCHEDULING

Operational-level scheduling decisions on the factory floor include the release policy and the dispatching rule. Recent work by researchers suggests that factory performance depends heavily on the release policy. Several heuristic factory release rules have been developed that generate release decisions based on the status of the bottleneck machine. The heuristic rules perform very well in reducing the work-in-process inventory. However, factory output schedules generated by these rules generally fail to match the demand pattern, creating excessive finished goods inventory and/or excessive backorders. To overcome these difficulties, a computationally efficient integer programming model is proposed for release scheduling.