Retailer Transshipment versus Central Depot Allocation for Supply Network Design

We consider a supply chain structure with shipments from an external warehouse directly to retailers and compare two enhancement options: costly transshipment among retailers after demand has been realized vs. cost‐free allocation to the retailers from the development of a centralized depot. Stochastic programming models are developed for both the transshipment and allocation structures. We study the impact of cost parameters and demand coefficient of variation on both system structures. Our results show an increasing convex relationship between average costs and demand coefficient of variation, and furthermore that this increase is more pronounced for the allocation structure. We employ simulation and nonlinear search techniques to computationally compare the cost performance of allocation and transshipment structures under a wide range of system parameters such as demand uncertainty and correlation; lead times from the external warehouse to retailers, from warehouse to central depot, and from depot to retailers; and transshipment, holding, and penalty costs. The transshipment approach is found to outperform allocation for a broad range of parameter inputs including many situations for which transshipment is not an economically sound decision for a single period. The insights provided enable the manager to choose whether to invest in reducing lead times or demand uncertainty and assist in the selection of investments across identical and nonidentical retailers.     

Rule Violations and Organizational Search: A Review and Extension

Whether they are formally prescribed or informally agreed upon, rules delineate the types of behavior deemed acceptable or appropriate within organizations. Studies often find that negative outcomes such as decreased group cohesion and higher turnover result when rules are broken. However, research rarely examines the potential positive effects of rule violations. Rules describe expectations about behavior within routines, or patterns of activity in organizations. When rules are violated by individuals, it could be an indication that the associated patterns of activity are no longer appropriate and that changes to the routines are needed. Organizations may learn from these violations if the violations trigger a search for new ways to organize activities, but this connection between violations and the search for new routines is affected by several factors. Drawing from a review and discussion of rules, routines, and research on organizational search and learning, this paper develops propositions regarding how rule violations motivate the search for new routines. This perspective integrates the literatures on rule‐breaking and organizational search, and also suggests that managers who attend to patterns of rule‐breaking within their organizations may detect drift from their environments and take corrective action earlier than suggested by other organizational learning research.     

Maternal education and child health: Is there a strong causal relationship?

Using data from the first round of Demographic and Health Surveys for 22 developing countries, we examine the effect of maternal education on three markers of child health: infant mortality, children s height-for-age, and immunization status. In contrast to other studies, we argue that although there is a strong correlation between maternal education and markers of child health, a causal relationship is far from established. Education acts as a proxy for the socioeconomic status of the family and geographic area of residence. Introducing controls for husband’s education and access to piped water and toilet attenuate the impact of maternal education on infant mortality and children’s height-for-age. This effect is further reduced by controlling for area of residence through the use of fixed-effects models. In the final model. maternal education has a statistically significant impact on infant mortality and height-forage in only a handful of countries. In contrast. maternal education remains statistically significant for chidren’s immunization status in about one-half of the countries even after individual-level and community-level controls are introduced.     

The Efficacy of Neural Networks in Predicting Returns on Stock and Bond Indices*

This paper uses two recently developed tests to identify neglected nonlinearity in the relationship between excess returns on four asset classes and several economic and financial variables. Having found some evidence of possible nonlinearity, it was then investigated whether the predictive power of these variables could be enhanced by using neural network models instead of linear regression or GARCH models. Some evidence of nonlinearity in the relationships between the explanatory variables and large stocks and corporate bonds was found. It was also found that the GARCH models are conditionally efficient with respect to neural network models, but the neural network models outperform GARCH models if financial performance measures are used. In resonance with the results reported for the tests for neglected nonlinearity, it was found that the neural network forecasts are conditionally efficient with respect to linear regression models for large stocks and corporate bonds, whereas the evidence is not statistically significant for small stocks and intermediate-term government bonds. This difference persists even when financial performance measures for individual asset classes are used for comparison.     

Mother or Market? Effects of Maternal Employment on the Intellectual Ability of 4-Year-Old Children

This article uses the 1986 Children of the National Longitudinal Survey of Youth data set to investigate the impact of maternal employment on children's intellectual ability, as measured at the age of 4 by using the Peabody Picture Vocabulary Test (PPVT). Results from multivariate regression analysis show a statistically significant adverse effect of mother's employment on children's intellectual ability, but only for boys in higher income families. Furthermore, the negative impact was related to the timing of maternal employment: employment during the boys' infancy had a statistically significant negative effect on PPVT scores at the age of 4. This pattern was not found for girls, for children in low-income families, or for families in which mothers resumed their employment after the child's first year of life. The impact of other demographic trends in recent years--declining fertility and rising marital instability--are also investigated. The results show an adverse effect of the presence of other siblings on children's PPVT scores; but holding family income constant, the effect of the parents' marital status on children's intellectual ability is not statistically significant. In addition, several family background factors are highly correlated with children's test scores.     

A computable prototype model of economic development

Economic development models need to advance beyond the two-gap type capital-output models of growth. This paper presents a prototype model of economic development where development is defined more broadly than aggregative output growth in terms of four objectives, namely, income, consumption, distribution, and employment. It is in keeping with the basic needs approach recently developed by the World Bank and other international organizations.The model formulation is based on the dualistic theory of capital formation and structural change. The specification is on the supply side. A novel aspect of the model is that it incorporates the role of education, health, and nutrition in economic development. Further it makes use of cross section data, which is unusual in model building.The model is put to illustrative use to generate dynamic policy multipliers of education and health expenditure. The results do not support the Malthusian fears that increased health expenditure would cause massive unemployment and reduce the standard of living in LDCs.