Production lot sizing for deterministic rolling schedules

In this article, we study production planning for a rolling horizon in which demands are known with certainty for a given number of periods in the future (the forecast window M). The rolling horizon approach implements only the earliest production decision before the model is rerun. The next production plan will again be based on M periods of future demand information, and its first lot-sizing decision will be implemented.Six separate lot-sizing methods were evaluated for use in a rolling schedule. These include the Wagner-Whitin algorithm, the Silver-Meal heuristic, Maximum Part-Period Gain of Karni, Heuristics 1 and 2 of Bookbinder and Tan, and Modification 1 to the Silver-Meal heuristic by Silver and Miltenburg.The performance of each lot-sizing rule was studied for demands simulated from the following distributions: normal, uniform (each with four different standard deviations); bimodal uniform (two types); and trend seasonal (both increasing and decreasing trends). We considered four values of the setup cost (leading to natural ordering cycles in an EOQ model of three, four, five, and six periods) and forecast windows in the range 2 M 20.Eight 300-period replications were performed for each combination of demand pattern, setup cost, and lot-sizing method. The analysis thus required consideration of 2304 300-period replications (6 lot-sizing methods × 12 demand patterns × 4 values of setup cost × 8 realizations), each of which was solved for nineteen different values of the forecast window M. The performance of the lot-sizing methods was evaluated on the basis of their average cost increase over the optimal solution to each 300-period problem, as though all these demands were known initially.For smaller forecast windows, say 4 M 8, the most effective lot-sizing rules were Heuristic 2 of Bookbinder and Tan and the modified Silver-Meal heuristic. Rolling schedules from each were generally 1% to 5% in total cost above that of the optimal 300-period solution. For larger forecast windows, M 10 or so, the most effective lot-sizing method was the Wagner-Whitin algorithm. In agreement with other research on this problem, we found that the value of M at which the Wagner-Whitin algorithm first becomes the most effective lot-sizing rule is a decreasing function of the standard deviation of the demand distribution.     

Job Classifications and Plant Performance in the Auto Industry

This study assess the relationship between plant economic performance and job classifications, using data from a large, unionized, automobile manufacturer. Combining skilled and semi-skilled job classifications leads to small improvements in economic performance, while reductions in the member of assembly job classifications affect neither plant productivity nor plant quality. The data also reveal that classification reductions predict plant modernization, although the magnitude of this effect varies with the occupational group.     

Lease Financing and Corporate Governance

Lease financing is a well‐recognized mechanism for reducing the agency costs of debt. This study examines whether firms that attempt to control the agency costs of equity through strong governance structures, including Chief Executive Officer compensation alignment and board structure, are more likely to use an agency cost reducing debt structure, such as leasing. For a sample of large firms, we find that firms who use more incentive compensation and have more outside directors also tend to use more lease financing, suggesting these agency cost reducing measures are complements.     

Rough and lonely road to prosperity: a reexamination of the sources of growth in Africa using Bayesian model averaging

This paper takes a fresh look at Africa's growth experience by using the Bayesian model averaging (BMA) methodology. BMA enables us to consider a large number of potential explanatory variables and sort out which of these variable can effectively explain Africa's growth experience. Posterior coefficient estimates reveal that key engines of growth in Africa are substantially different from those in the rest of the world. More precisely, it is shown that mining, primary exports and initial primary education exerted differential effect on African growth. These results are examined in relation to the existing literature. Copyright © 2008 John Wiley & Sons, Ltd.     

Modes of cooperative R&D commercialization by start‐ups

This study empirically examines the determinants of heterogeneous firm‐level cooperative R&D commercialization strategies. While the volume of interfirm collaboration has increased dramatically in recent decades, the determinants of firm‐level choices among alternate modes of such cooperative activity remain relatively understudied. We develop a conceptual model of factors determining collaborative mode choice at the organizational portfolio level. These factors include the firm‐level appropriation environment, in which deal‐level choices have portfolio‐level spillover implications, as well as governance capabilities developed by the firm over time. Using a random sample of innovating biotechnology start‐ups, we assemble a firm‐year panel dataset that aggregates transaction‐level collaboration data to the firm‐year level, allowing us to characterize firms' portfolios of collaborative deals. We find broad empirical support for our model, suggesting that a firm's appropriation environment and governance capabilities strongly influence portfolio‐level collaboration mode choices. In addition, we explore the implications of governance capability development, finding that experience with particular modes, as well as deviations from existing capabilities, impact firm valuation. Copyright © 2009 John Wiley & Sons, Ltd.     

Multinationals do it better: Evidence on the efficiency of corporations' capital budgeting

With U.S. multinational enterprises playing increasingly important roles in the global economy, it is important to understand the efficiency of their capital budgeting decisions. We examine an unbalanced panel of 332 U.S. firms from 1992–2000. Using the deviation of a firm's estimated marginal Tobin's q from a benchmark as an indicator of effective resource allocation, we find that widespread multinationals make more efficient capital budgeting decisions. We also test whether this reflects the MNEs' investment locations, but do not obtain support for the hypotheses that they might be monitored by more agents or more successfully resist pressures from interest groups and governments.     

In Defense of Boards

It is often assumed that bad corporate performance means a bad CEO. The task of a board of directors is then simple: dismiss the executive. If it fails to do so, the board is said to be indolent. We take a kinder approach to observed board behavior and point to the problems even well-intended boards would encounter. They face the twin task of disciplining and screening executives. We analyze the nature of the retention contract a board uses to discipline and screen executives. Consistent with empirical observation, we find that executives may become overly active to show their credentials, and that the link between bad performance and dismissal is weak.     

“The Worse You Behave, The More You Seem, to be Rewarded”: Bullying in Nursing as Organizational Corruption

This paper reports findings from the first, qualitative stage of a national sequential, mixed method study of bullying in the Australian nursing workplace. Twenty-six nurses who had experience of workplace bullying were recruited from two Australian public sector health care organizations. Examining the narrative data from the viewpoint of bullying being a corrupt activity we present an alternative perspective on group acts of bullying. By exploring bullying as corrupt behaviour, this paper challenges the assumption that bullying can be principally considered a series of isolated events stemming from interpersonal conflict, organizational pressures, or poor work design. Corruption in organizations has not previously been linked with or compared to bullying. In revealing the manner in which actors can engage in corrupt conduct that includes bullying, the findings from our study offer important implications for the management of workplace bullying as a serious and corrupt activity.