Coordination of planning and scheduling decisions in global supply chains with dual supply modes

We address the problem of coordinating aggregate planning decisions and short-term scheduling decisions in supply chains with dual supply modes. We consider long lead time, less expensive sea shipments that are based on demand forecast, and responsive but costly air shipments that are based on revised forecast closer to the demand period. The planning problem determines the sea shipment order quantity and inventory level, while the scheduling model determines the schedule and quantity of air shipments. Results from our numerical experiments suggest that our model leads to consistent cost improvements over a wide range of operating scenarios.     

Analysts’ estimates of the cost of equity capital

We explore a large sample of analysts' estimates of the cost of equity capital (CoE) to evaluate their usefulness as expected return proxies (ERP). We find that the CoE estimates are significantly related to a firm's beta, size, book-to-market ratio, leverage, and idiosyncratic volatility but not other risk proxies. Even after controlling for the popular return predictors, the CoE estimates incrementally predict future stock returns. This predictive ability is better explained as the CoE estimates containing ERP information rather than reflecting stock mispricing. When evaluated against traditional ERPs, including the implied costs of capital, the CoE estimates are found to be the least noisy. Finally, we document CoE responses around earnings announcements, demonstrating their usefulness to study discount-rate reactions of market participants. We conclude that analysts' CoE estimates are meaningful ERPs that can be fruitfully employed in a variety of asset pricing contexts.