A flexible model for the pricing of perishable assets

We present a flexible and versatile model which addresses the problem of assigning optimal prices to assets whose value becomes zero after a fixed expiry date. (Such assets include the important example of seats on airline flights.) Our model is broad in scope, in particular encompassing the ability to deal with arrivals of customers in groups. It is highly adaptable and can be adjusted to deal with a very extensive set of circumstances.Our approach to the problem is based on elementary and intuitively appealing ideas. We model the arrival of customers (or groups of customers) according to an inhomogeneous Poisson process. We incorporate into the model time dependent price sensitivity (which may also be described as “time dependent elasticity of demand”). In this setting the solution to the asset pricing problem is achieved by setting up coupled systems of differential equations which are readily amenable to numerical solution via (for instance) a vectorised Runge-Kutta procedure. An attractive feature of our approach is that it unifies the treatment of discrete and continuous prices for the assets.     

A real option theoretic fuzzy evaluation model for enterprise resource planning investment

The high failure rate of ERP implementation is due to a common pitfall that ERP projects are often enacted as merely investment into installation of IT infrastructure, rather than systematic planning of operation changes, business process re-engineering and a paradigm shift for the operation and management. To manage ERP investment in a changing environment for high payoff, this paper adopts a real option theoretic method. Fuzzy payoff valuation is introduced to deal with uncertainties in order to minimize the risk of failure. The proposed ERP evaluation model is geared towards small and medium enterprises. A case study is presented to validate the proposed fuzzy real options. The results indicate the potential of modeling ERP investment as “Expand”, “Contain” and “Abandon” options in different scenarios. The fuzzy real option model bestows a novel ex-ante cost analysis for justifying ERP investment in the implementation cycle.     

Ascendancy of primary care will create role intensification for physician executives

The need for physicians in management roles in the health care system has never been greater. And the years ahead will see that need broadened and intensified. To maintain their leadership role in medical affairs in hospitals and other types of health care delivery organizations, physician executives will have to envision provider organizations and systems that have not yet been conceived, let alone developed and implemented. They have to become totally open-minded and futuristic in their thinking. And they will have to help other physicians accommodate this new way of thinking if the medical profession is to continue in a leading role in health care matters. Although numerous factors will have to be anticipated and analyzed by these new physician leaders, the ascendancy of primary care in a managed health care world long dominated by the technical and technological superiority of hospital care will present a particular challenge to the physician executive.     

The Role of Interorganizational and Organizational Factors on the Decision Mode for Adoption of Interorganizational Systems*

The dramatic growth of interorganizational systems (IOS) has changed the way organizations conduct their business, and has resulted in significant tangible and intangible benefits being realized by participating firms. However, the implementation of these IOS requires the cooperation and commitment of all the participating members. These members may have complex economic and business relationships among themselves that can result in a number of social, political, and economic factors influencing the adoption and implementation of IOS. This study examines the role of interorganizational and organizational factors on the decision mode for adoption of IOS, in the specific context of electronic data interchange (EDI). Four interorganizational factors, based on the socio-political framework derived from research in marketing, and five organizational factors based on research in IS were used in the study. The data for the study were collected through a large scale field survey. Two respondents, the sales/purchase manager and the IS manager, from 201 firms responded to the survey. The results of discriminant analysis of the data reveal that two interorganizational variables, competitive pressure and exercised power, and two organizational variables, internal need and top management support, are important variables to differentiate firms with proactive decision mode from firms with reactive decision mode. The study also evaluates the differences between proactive and reactive firms on three implementation outcomes. Proactive firms are found to have greater extent of adaptation, more external connectivity with trading partners, and better integration of EDI information in their internal IS applications.     

Bringing Japanese Continuous Improvement Approaches to U.S. Manufacturing: The Roles of Process Orientation and Communications*

Continuous improvement (CI) has played a key role in Japan's quality management. U.S. companies have begun to adopt CI in recent years. This paper studies the implementation of CI in seven U.S. manufacturing companies. We view values as the core concept of culture that impacts CI effectiveness. Using both qualitative and quantitative data with a sample of seven companies, we observe empirically a relationship between process-oriented values and CI effectiveness. We also find that communications involving workers is strongly associated with CI effectiveness. Finally, we find an association between process orientation and communication frequency, and argue that communications act as an intervening variable between process orientation and effectiveness.     

Some aspects of price strategy

A firm's success, within a rapidly growing and dynamic market, depends upon its ability to respond to market demand and to react to competitive forces. A key factor determining success is the pricing policy employed by the firm. Product pricing, however, is not simple; supply and demand, as well as the interaction and reaction of competitors, must be taken into consideration. By simulating a competitive market environment, however, a firm should be able to evaluate different pricing strategies prior to employing a strategy in practice. The goal of this research was to propose a simulation model to serve this purpose. Particularly, the objective was to demonstrate that if an industry can be characterized as one in which cost as well as price decline with cumulative volume, a pricing policy leading to market dominance exists. A simulation model is desirable for evaluating the proper pricing strategy for achieving such a market position.     

Final report of the Color Additive Scientific Review Panel

The Color Additives Scientific Review Panel considered whether there was information sufficient to perform a carcinogenic risk assessment on the colors D&C Red No. 19 (R-19), D&C Red No. 37 (R-37), D&C Orange No. 17 (O-17), D&C Red No. 9 (R-9), D&C Red No. 8 (R-8) and FD&C Red No. 3 (R-3) and to evaluate the assessments sent to FDA as part of the petitions for use of the colors for drug and external uses by the Cosmetic, Toiletry and Fragrance Association (CTFA). There is a lack of human data concerning the colors for making a human health assessment, so the assessments are based upon the extrapolation of animal data. The risk assessments are determined for exposure to single chemicals. Excluded from consideration are possible effects from exposure to multiple chemicals, such as co-carcinogenesis, promotion, synergism, antagonism, etc. In the light of recent efforts in establishing a consensus in risk assessment, the Panel has determined that the CTFA assessments for R-10, O-17, and R-9 are consistent with present acceptable usages, although it questions some of the assumptions used in the assessments. The Panel identified a number of general assumptions made, and discusses their validity, their impact on total uncertainty, and the potential options to address the gaps in understanding that necessitate the assumption. The Panel also derived revised risk estimates using more "reasonable" assumptions than "worst-case" situations, for 90th percentile and average exposure. For those assumptions that are easily quantifiable, the Panel's estimates are less than an order of magnitude lower than the CTFA risk estimates, indicating that the underestimates and overestimates of the CTFA risk estimates tend to balance each other. The impact of most of the assumptions is not quantifiable. The assessment for R-3 is complicated by the fact that there is no good skin penetrance study for this color. It was assumed that the penetrance is similar to that of another water-soluble xanthene color, R-19. It is expected that the absorption of the color is not likely to exceed that of the smaller molecule, R-19. Therefore, the risk estimates are similar to the CTFA estimates, but with different reasoning. The estimates for R-8 and R-37 are different from the others in that there is a lack of any exposure or toxicological information on these colors.(ABSTRACT TRUNCATED AT 400 WORDS)     

A revolution in genetics: changing medicine, changing lives

The sequencing of the human genome is only the tip of the iceberg. It is the beginning of a revolution that many predict will transform medicine. How will genetics research affect physicians and patients and the practice of medicine? When investigators identify the function and association of human genes with common chronic diseases, diagnosis, treatment, and classification of human diseases will be changed forever. Genetic susceptibility testing allows patients to know their predisposition to disease long before symptoms appear. Physicians can intervene with customized advice so that the patient can prevent, modify, or avoid the predisposed condition by better understanding both his or her genetic and environmental risk for disease. The promise of a genetic approach to drug therapy involves moving from one size fits all to personalized medicine tailored to the individual patient. Physicians will become mentors and counselors, advising patients on the best treatment path given their unique genetic predisposition--even in this sophisticated, high tech field, the physician-patient relationship is likely to improve, highlighted by individualized therapies and personal attention.     

The good leader

What are the traits of successful leaders and can they be applied to those of us in health care? Leaders must deal with conflict to get a group of people to move in the same direction. Successful leaders learn to have difficult conversations that increase understanding and morale and creatively deal with the inevitable interpersonal conflicts present in every organization made up of people. Another useful trait for a leader during uncertain and chaotic times is the ability to see things as they really are, rather than as we wish or believe them to be. Successful leaders are also usually optimists who level with their co-workers.     

Ethical Futures and Public-Private Partnerships: Peering Far Down the Track

This article employs an institutional perspective in formulating predictions about the ethical futures of privatization partnerships. Although this paper focuses on ethical concerns in the U.S. public sector, it incorporates a multinational dimension in (a) comparing the meaning of privatization among societies and (b) probing privatization financing in the global economy. Five assumptions that flow from institutional reasoning are made explicit as supports for subsequent predictions. The institutional logic shifts privatization conversation away from conventional debate about competition and efficiency toward centralizing forces in both sectors in response to globalization. In that regard, this study identifies the systemic erosion of (local) community integrity as the key privatization problem of the future.