The efficacy of using judgmental versus quantitative forecasting methods in practice

In an era where forecasts drive entire supply chains forecasting is seen as an increasingly critical organizational capability. However, business forecasting continues to rely on judgmental methods despite large advancements in information technology and quantitative method capability, prompting calls for research to help understand the reasons behind this practice. Our study is designed to contribute to this knowledge by profiling differences between firms identified as primary users of either judgmental or quantitative forecasting methods. Relying on survey data from 240 firms we statistically analyzed differences between these categories of users based on a range of organizational and forecasting issues. Our study finds large differences in forecast error rates between the two groups, with users of quantitative methods significantly outperforming users of judgmental methods. The former are found to be equally prevalent regardless of industry, firm size, and product positioning strategy, documenting the benefits of quantitative method use in a variety of settings. By contrast, the latter are found to have significantly lower access to quantifiable data and to use information and technology to a lesser degree.     

A Risk Assessment Method for Biological Introductions

This article describes an application of a method for assessing risks associated with the introduction of an organism into a new environment. The test organism was a binucleate Rhizoctonia fungal isolate that has potential for commercial development as a biological control agent for damping-off diseases in bedding plants. A test sample of host plant species was selected using the centrifugal phylogenetic host range principles, but with an emphasis on economic species. The effect of the fungus on the plant was measured for each species and expressed on a logarithmic scale. The effects on weights of shoots and roots per container were not normally distributed, nor were the effects on the number of plants standing (those which survived). Statements about the effect on the number standing and the shoot weight per container involved using the observed (empirical) distribution. This is illustrated with an example. Problems were encountered in defining the population of species at risk, and in deciding how this population should be formally sampled. The limitations of the method are discussed.     

The value circle. A profile of J. Richard Gaintner, MD.

This article describes how the arrival of CEO J. Richard Gaintner, MD, at Shands HealthCare signaled a time for refocusing the organization's direction and helping physicians to cope with the changes buffeting the industry. He saw angst and disenfranchisement, sentiments that characterized not only Shands and the University of Florida Health Science Center, but also the entire establishment of American scientific medicine. Gaintner believes--and continually preaches--that practicing medicine in a cost-effective manner will improve, not harm, the quality of care. His willingness to face reality objectively is perhaps his greatest asset in helping physicians deal with managed care. He conveys heartfelt empathy with the day-to-day conflicts they face. But he does not allow himself the temporary luxury of cynicism, and he refuses to accept negativity and pessimism in others. Rather, he asks that physicians and managers understand the system and develop the capacity to work within it and take responsibility for improving it. Beyond exhorting physicians to be accountable for the success of the enterprise, Gaintner creates mechanisms for meaningful physician participation in enterprise management.     

The coming medical apocalypse.

Is there a medical apocalypse in our future? Will it happen soon? No one can say for sure, but five ominous trends suggest that a medical meltdown could occur at any time. These trends are: (1) The practice of providing medical care becoming too complex from both a business and a legal perspective; (2) Less money being spent on medical care without any corresponding reduction in services provided, creating long-term operating deficits; (3) Investor-owned, for-profit corporations changing the focus of medicine by putting shareholder concerns ahead of patient care; (4) Employment-linked health care insurance creating a growing uninsured population, adding extra financial stress to our hospitals; and, (5) Providers losing faith in their future and becoming increasingly demoralized about practicing the healing arts. These dangerous trends are considered, along with some suggestions that physician executives and organizations might take to protect themselves.     

Putting consumer behaviour in its place: the Behavioural Perspective Model research programme

Consumer research remains overwhelmingly cognitive in orientation, partly because its apparent underlying philosophical stance usually goes unremarked and unchallenged. In so far as scientific progress relies on the interaction of competing theories, consumer research is impoverished by too great a reliance on a single approach to theory. This paper proposes an alternative to the prevailing 'intentional stance' on which consumer research predominantly rests; the 'contextual stance' eschews the intentionality of the cognitive explanations of consumer choice, substituting for it an account of behaviour determined by its environmental consequences. As a prelude to the interactive debate that these competing stances will hopefully engender, the paper demonstrates that the contextual stance is a viable strategy for consumer research. The contextual strategy leads to an alternative model of consumer choice to those based on social cognitive psychology. It is argued that this model of consumer choice in behavioural perspective provides a thoroughgoing conceptual reinterpretation of consumer behaviour and marketing management as currently envisaged.     

Quality costing: a management review

This paper relates a review of the English language literature on quality costing and traces its historical development; it provides authoritative reading on the subject. The review also has a focus on collection and use of quality-costing methods, quantitative cost data and the role and views of accountants in the task of quality-cost collection and reporting. Amongst the main findings is the preoccupation with the prevention – appraisal – failure categorization of quality costs and lack of guidance on definitions. The considerable impact of the American quality profession on the development of quality costing is pointed out along with the increasingly positive stance of accountants.     

On the Measurements of Board Composition: Poor Consistency and a Serious Mismatch of Theory and Operationalization

Over two dozen operationalizations of board composition can be identified from the empirical literature. A structural equations confirmatory factor analysis (LISREL 8.03) suggests that these operationalizations do not constitute a single construct of board independence. Instead, analyses strongly indicate three separate constructs. Common operationalizations of board composition, then, are neither tenable surrogates for one another nor are they interchangeable. Implications for empirical aggregation of studies, theory/measurement convergence, and the current corporate governance public policy debate are discussed.     

Vendor Selection with Bundling: A Comment*

In a recent article by Rosenthal, Zydiak, and Chaudhry (1995), a mixed integer linear programming model was introduced to solve the vendor selection problem for the case in which the vendor can sell items individually or as part of a bundle. Each vendor offered only one type of bundle, and the buyer could purchase at most one bundle per vendor. The model employed n(m+ 1) binary variables, where n is the number of vendors and m is the number of products they sell. The existing model can lead to a purchasing paradox: it may force the buyer to pay more to receive less. We suggest a reformulation of the same problem that (i) eliminates this paradox and reveals a more cost-effective purchasing strategy; (ii) uses only n integer variables and significantly reduces the computational workload; and (iii) permits the buyer to purchase more than one bundle per vendor.     

The impact of learning opportunities and decision authority on occupational health

In an investigation of 418 employees in the Norwegian Postal Service, employees with high learning opportunities and high decision authority were found to be better off on psychological functioning, health and organizational outcome variables than employees with low scores on these variables. Decision authority and learning opportunities had specific and independent impact on subjective health, psychological functioning, coping style and organizational outcome variables. There were, however, also interaction effects between demands, learning opportunities, and decision authority on subjective health. Learning opportunities and decision authority were operationalized with a questionnaire, supplemented with questions on the opportunities to learn skills beyond the present job situation. It is suggested that this is a particularly important dimension for coping with the present day rapid changes in working life, where the objective for many workers will be to broaden their repertoire and competence to increase their flexibility in the labour market.