Bounds for the mean residual life function of a <Emphasis Type="Italic">k</Emphasis>-out-of-<Emphasis Type="Italic">n</Emphasis> system

In the reliability studies, k-out-of-n systems play an important role. In this paper, we consider sharp bounds for the mean residual life function of a k-out-of-n system consisting of n identical components with independent lifetimes having a common distribution function F, measured in location and scale units of the residual life random variable X _t  = (X−t|X > t). We characterize the probability distributions for which the bounds are attained. We also evaluate the so obtained bounds numerically for various choices of k and n.     

Taxonomy methods in credit risk evaluation

In their bid for integration with the European Union, the countries of Central and Eastern Europe are faced with the need to introduce numerous significant improvements to their economic systems. A highly important role in this process is to make changes in the existing banking systems. The credit risk evaluation method presented here, using taxonomic measures to plot so-called credit risk maps, may be used to develop sound principles of credit policies. It is a proposition that could solve one of the many problems arising in the course of adaptation of banking systems in Central and Eastern Europe to conditions of market economy.     

Ethical Rationality: A Strategic Approach to Organizational Crisis

In this paper, we present an ethical and strategic approach to managing organizational crises. The proposed crisis management model (1) offers a new approach to guide an organization’s strategic and ethical response to crisis, and (2) provides a two-by-two framework for classifying organizational crises. The ethically rational approach to crisis draws upon strategic rationality, crisis, and ethics literature to understand and address organizational crises. Recent examples of corporate crises are employed to illustrate the theoretical claims advanced. Finally, the paper provides guidelines for a morally optimal outcome for the organization and its stakeholders. Peter Snyder is a Ph.D. student in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. His research interests include strategy making and corporate governance. Molly Hall is an attorney who practices international and environmental law in Milwaukee, Wisconsin. She teaches adjunct courses in business ethics, environmental policy, and the European Union. Joline Robertson is a Ph.D. candidate in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. Her research interests include international business. Tomasz Jasinski is a Ph.D. student in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. His research interests include strategic alliances. Janice S. Miller received her Ph.D. from Arizona State Univerity in Business Administration with a concentration in Human Resource management. She has been on the faculty at the University of Wisconsin-Milwaukee UWM since 1996 and has served as the Associate Dean for Academic Programs in the School of Business Administration since 2002. Dr. Miller’s primary research interests include performance management, compensation and ethical issues in organizations.     

Portfolio optimization with a defaultable security

In this paper we derive a closed-form solution for a representative investor who optimally allocates her wealth among the following securities: a credit-risky asset, a default-free bank account, and a stock. Although the inclusion of a credit-related financial product in the portfolio selection is more realistic, no closed-form solutions to date are given in the literature when a recovery value is considered in the event of a default. While most authors have assumed some recovery scheme in their initial model set up, they do not address the portfolio problem with a recovery when a default actually occurs. Given the tractability of the recovery of market value, we solved the optimal portfolio problem for the representative investor whose utility function is a Constant Relative Risk Aversion utility function. We find that the investor will allocate larger fraction of wealth to the defaultable security as long as the default-event risk is priced. These results are very intuitive and reasonable since it indicates that if the default risk premium is not priced properly the investor purchases less defaultable securities.     

Scheduling jobs with values dependent on their completion times

The paper concerns two scheduling problems with job values and losses of job values (costs) dependent on job completion times. In the first problem, we consider scheduling jobs with stepwise values in parallel processor environment. In the stepwise value, there is given a number of moments at which the job value decreases and between them the job value is constant (thus, the value deteriorates over time). The maximized criterion is the total job value. We prove strong NP-hardness of a single processor case of the problem and construct a pseudo-polynomial time algorithm for a special case with fixed number of unrelated parallel processors and fixed number of common moments of job value changes. Additionally, for uniform and unrelated parallel processors we construct and experimentally test several heuristic algorithms based on the list strategy. The second problem is a single processor one with piecewise linear losses of job values (the loss increases over time). The minimized criterion is the total loss of job value. We prove strong NP-hardness of the problem and existence of a pseudo-polynomial time exact algorithm for its special case. We also construct some heuristic algorithms for this problem and verify experimentally their efficiency.     

The impact of selected factors on new business formation in the private healthcare sector

Numerous factors influence the development of the private healthcare sector. Therefore, the selection of these factors, which represent a potential opportunity for forming new entities, is a crucial from the point of view of entrepreneurship. In our research we selected strategic variables which have got direct influence on entrepreneurship in the private healthcare sector in Poland. Theoretical approach was based on literature review which have revealed the main factors and their relationships with entrepreneurship according to the previous research studies. This research study was conducted for the entire population of municipalities in Poland. Methodology was based on Intelligent Data Analysis (IDA) which can be applied for a large amounts of data in order to extract useful knowledge from it. Moreover, in research study were applied explanation techniques – decision rules –in order to indicate, to what extent the environment have influence on strategic choices conditioning the success of businesses. The results have revealed that it is possible to determine a set of the most important factors influencing entrepreneurship in the private healthcare sector in Poland. On the other hand, were indicated these variables which do not participate in process of influencing on entrepreneurship in private healthcare sector in Poland.

     

Securitization and distressed loan renegotiation: Evidence from the subprime mortgage crisis

We examine whether securitization impacts renegotiation decisions of loan servicers, focusing on their decision to foreclose a delinquent loan. Conditional on a loan becoming seriously delinquent, we find a significantly lower foreclosure rate associated with bank-held loans when compared to similar securitized loans: across various specifications and origination vintages, the foreclosure rate of delinquent bank-held loans is 3% to 7% lower in absolute terms (13% to 32% in relative terms). There is a substantial heterogeneity in these effects with large effects among borrowers with better credit quality and small effects among lower quality borrowers. A quasi-experiment that exploits a plausibly exogenous variation in securitization status of a delinquent loan confirms these results.     

TOPSIS Based Approach to Scoring Negotiating Offers in Negotiation Support Systems

In this paper we analyze the possibility of applying the technique for order preferences by similarity to ideal solution (TOPSIS) to building the scoring system for negotiating offers. TOPSIS is a multiple criteria decision making method that is based on measuring distances between alternatives under consideration and two bipolar reference alternatives, a positive and negative ideal. Thus the criteria used for the evaluation of alternatives should be described using strong scales. However, in the negotiation, the issues are very often described qualitatively, which results in ordinal or even nominal variables that must be taken into consideration in offers’ evaluation process. What is more, TOPSIS may be applied to solving the discrete decision problems while the negotiation space may be defined by the means of continuous variables too. In this paper we try to modify the TOPSIS algorithm to make it applicable to negotiation support and, moreover, discuss the following methodological issues: using TOPSIS for a negotiation problem with continuous negotiation space; selecting the distance measure for adequate representation of negotiator’s preferences and measuring distances for qualitative issues. Finally, we propose a simple additional mechanism that allows for building the TOPSIS-based scoring system for negotiating offers and does not involve negotiators in time consuming and tiresome preference elicitation process. This mechanism requires from negotiators to construct examples of offers that represent some categories of quality and then by using a goal programming approach it infers all the parameters required by the TOPSIS algorithm. We also show a simple prototype software tool that applies the TOPSIS modified algorithm and may be used in electronic negotiation support.