R and D tactics: applications of RPD decision analysis

Abstract: The application of RPD decision analysis to R & D tactics is discussed and the role of the technique as an aid to self-consistent decision making is enaphasized. RPD decision analysis is used to define limits to its own cost effectiveness.
Two example problems are analysed in detail. Simple priority ratings are defined for two special cases: the sequence of independent tests all of which must succeed, and the sequence of independent problem solving attempts, any of which may succeed. The compromise between project duration and project cost is analysed in terms of time dependence of the value of success.
The discrimination study is defined as an investigation which aims to provide information for an improved assessment of project success probability.
It is shown that such a study is never worth more than one quarter of the total expected benefits of the project.     

Financial Times Business School Rankings: A Nontraditional Assurance Case in Three Parts*

The Financial Times of London (FT) is a business newspaper, with daily editions published in the United Kingdom, continental Europe, the United States, and Asia, and an estimated daily readership of 10 million people. In 1999 the FT began to publish a ranking of what it considered to be the top business schools in the world. Since their inception, these rankings have become increasingly relied upon by potential students and business school administrators worldwide. The FT's ranking is unique compared with other rankings because of its special international focus. Given the prominence of these rankings and the FT's position as a well‐respected business newspaper, the question of providing assurance over the business school rankings that the FT provides is particularly challenging.     

The Information Content of Bank Examinations

We identify three types of information from bank examinations—auditing information from verifying the honesty and accuracy of the bank's books, regulatory discipline information about the treatment of the bank by regulators, and private information about bank condition. We estimate these information effects by comparing the cumulative abnormal market returns associated with examinations in which the CAMEL rating remained unchanged, improved, and worsened. All three information effects are found to be greater for banks entering the examination process with unsatisfactory ratings from prior examinations. The only consistently strong effect found is that examination downgrades appear to reveal unfavorable private information about bank condition. The evidence also suggests that the information may reach the market in part through loan quality data released in quarterly financial statements.     

Life cycle assessment in the food supply chain: a case study

This research aims at assessing the environmental impact of the poultry supply chain from cradle to grave using case study research and also life cycle assessment (LCA). While a limited number of generic poultry production LCA studies have been published, fewer yet assess the whole process of a specific organisation, none comparing the increased impact of further processing. Our results show that irrespectively of the impact assessment method utilised, the process of producing portions is considerably higher in total environmental impact due to the extra raw material required to produce the same mass into retail. Our research contributes to the growing number of LCA studies and could be used by practitioners for comparison against national and international averages. From a theoretical point of view, this research provides new insights into the relationship between vertically integrated supply chains and environmental performance which has not been examined in the past.     

Imagination Difficulty and New Product Evaluation

This research examines the role of imagination difficulty on the evaluation of really new products (RNPs) in comparison with incrementally new products (INPs). We extend past research on accessibility utilizing an anticipatory approach where consumers look forward and generate mental images for future product usage. We found that the role of imagination changes based on the newness of the product. Specifically, for RNPs, imagination difficulty is perceived to be diagnostic in product assessment, and thus, higher imagination difficulty leads to lower product evaluations. However, for INPs, which are shown to be less susceptible to context effects, imagination difficulty has a limited impact on product evaluations. In addition, we show that the effect of imagination difficulty on the evaluation of RNPs is moderated by the level of involvement of the consumer. Research and managerial implications are discussed.     

The use of Research Planning Diagrams

Abstract . The use of Research Planning Diagrams as an aid for project planning and evaluation is described. A computerized simulation technique for the analysis of the probabilities associated with a diagram is illustrated by means of a worked example.     

On the Rate of Convergence of Discrete‐Time Contingent Claims

This paper characterizes the rate of convergence of discrete‐time multinomial option prices. We show that the rate of convergence depends on the smoothness of option payoff functions, and is much lower than commonly believed because option payoff functions are often of all‐or‐nothing type and are not continuously differentiable. To improve the accuracy, we propose two simple methods, an adjustment of the discrete‐time solution prior to maturity and smoothing of the payoff function, which yield solutions that converge to their continuous‐time limit at the maximum possible rate enjoyed by smooth payoff functions. We also propose an intuitive approach that systematically derives multinomial models by matching the moments of a normal distribution. A highly accurate trinomial model also is provided for interest rate derivatives. Numerical examples are carried out to show that the proposed methods yield fast and accurate results.     

Reputation gaps and the performance of service organizations

Links between the reputation of organizations and their financial performance are intuitively attractive to assume, but often difficult to demonstrate convincingly. Gaps between employee and customer perceptions of corporate reputation have traditionally been associated with poor performance. In the context of service business and applying assimilation‐contrast theory, we hypothesize that the nature of such gaps will, in reality, have a differential effect on future revenue depending on the size and valence of the gap. The effects of small gaps should be assimilated by customers, but larger ones have a greater potential of creating a contrast effect resulting in significant increases or decreases in subsequent sales. In businesses where employees have a more positive view of the company reputation than customers, we hypothesize a growth in future sales, and where they have a relatively more negative view, a decline. We test the effects of what we label as reputation gaps in 56 business units drawn from nine service organizations and confirm our hypotheses. Among the implications of our findings are that managing reputation by elevating employee perceptions of a company's reputation above those perceived by its customers holds the potential to enhance future sales. Copyright © 2009 John Wiley & Sons, Ltd.     

DOLLARIZATION FOR ARGENTINA

In January 1999, President Carlos Menem suggested replacing the Argentine peso with the U.S. dollar. President Menem's announcement has sparked a debate throughout Latin America and Eastern Europe about what has been termed "dollarization." That debate prompted U.S. Treasury Secretary Robert Rubin to deliver a major policy speech on alternative exchange-rate regimes on April 21, 1999 and the U.S. Senate Banking Committee to hold dollarization hearings the following day featuring Fed Chairman Alan Greenspan and Deputy Secretary of the Treasury Lawrence Summers.
This article presents a case for officially dollarizing Argentina. Dollarization is not new. Unofficial dollarization is widespread in emerging market countries; in fact, as much as 70% of the stock of U.S. dollars now circulates abroad. Twenty-eight countries and dependent territories are officially dollarized. Although official dollarization would result in Argentina losing seigniorage of about 0.22 percent of GDP, the author estimates that this cost would be more than offset by a reduction in interest rates that would increase Argentina's trend rate of GDP growth by about two percent.
After debunking the most common criticisms of dollarization, the article closes by offering recommendations about the specific form of dollarization and presenting a detailed dollarization statute for Argentina. The author proposes a competitive currency regime for Argentina, one in which all foreign money would be legal tender.