Two-machine flow shop scheduling of polyurethane foam production

This paper studies a two-machine flow shop scheduling problem with a supporting precedence relation. The model originates from a real production context of a chemical factory that produces foam-rubber products. We extend the traditional two-machine flow shop by dividing the operations into two categories: supporting tasks and regular jobs. In the model, several different compositions of foam rubber can be mixed at the foam blooming stage, and products are processed at the manufacturing stage. Each job (product) on the second machine cannot start until its supporting tasks (parts) on the first machine are all finished and the second machine is not occupied. The objective is to find a schedule that minimizes the total job completion time. The studied problem is strongly NP-hard. In this paper, we propose a branch-and-bound algorithm incorporating a lower bound and two dominance rules. We also design a simple heuristic and an iterated local search (ILS) algorithm to derive approximate solutions. The performances of the proposed algorithms are examined through computational experiments.     

The Consequences for a Monopolistic Insurance Firm of Evaluating Risk Better than Customers: The Adverse Selection Hypothesis Reversed

This article models a situation in which a monopolistic insurer evaluates risk better than its customers. The resulting equilibrium allocations are compared to the consequences of the standard adverse selection hypothesis. On the positive side, they exhibit the property that low-risk people are better covered than higher-risk people. On the normative side, the article shows that there are two reasons for avoiding excessive risk classification: one is the classical destruction of insurance possibilities, and the other comes from the distrustful atmosphere generated by new asymmetric information.     

Internationalization Strategies of Business Schools: How Flat Is the World?

Business school strategy has become extremely complex, especially regarding internationalization. Using different paths, experiencing failure and success, business schools have internationalized, attracting many of the international students who contributed $27 billion¹ to the US economy in 2014. Some business schools are global, training global managers, while others serve national markets. How do business schools strategize about internationalization? Can we use existing models to explain this process? Are internationalization and globalization similar? Using a comparative analysis of six case studies in the United States and Europe, we found that the engine of internationalization influences its paths and outcomes. We contribute to international business (IB) research by discussing how business schools strategize their internationalization toward uniformity or diversity under isomorphic pressures from accreditation bodies (Association to Advance Collegiate Schools of Business [AACSB], 2011) and rankings. The so‐called Uppsala model should be extended to address three tensions: internationalization versus globalization, enacted dimensions of audiences, and respective risks of different internationalization pathways. © 2015 Wiley Periodicals, Inc.     

Omega performance measure and portfolio insurance

We analyze the performance of the two main portfolio insurance methods, the OBPI and CPPI strategies, using downside risk measures. For this purpose, we introduce Kappa performance measures and especially the Omega measure. These measures take account of the entire return distribution. We show that the CPPI method performs better than the OBPI. As a-by-product, we determine the set of threshold values for these risk/reward performance measures.     

Director Ownership and Voluntary Segment Disclosure: Hong Kong Evidence

Weakness of corporate governance and lack of transparency are often considered causes of or contributors to the Asian Financial Crisis. Publicly listed companies in Hong Kong, like other Asian firms, have concentrated director ownership. The study uses voluntary segment disclosure above the benchmark minimum as a proxy for transparency and examines its relationship to the ownership structure and composition of corporate boards in Hong Kong. We find that: (1) high (concentrated) board ownership explains the extent of low voluntary segment disclosure and this negative relationship is stronger when firm performance is very poor; (2) the contribution of non‐executive directors to enhance voluntary segment disclosure is effective for firms with low director ownership but not for concentrated‐ownership firms. These results have implications for policy makers and regulators in the Asia‐Pacific region striving to improve governance and transparency.     

Measuring the costs of children: parametric and semiparametric estimators1

How much additional income does a family with four children need to attain the same welfare level as a family with two children? And how much does a single person need compared to a childless couple? These questions are important in applied micro-economics and underlie public policy on, for example, social benefits and child allowances. In microeconomics, this is known as the problem of measuring equivalence scales. We estimate these scales using two types of subjective survey information. First, we use answers to survey questions on the income required to attain a given utility level. We compare the results for the usual linear model with semiparametric estimates, in which the functional form of the relationship between required income and family size and actual income is left unspecified. Second, we use answers to the question: how satisfied are you with actual household income? We present parametric and semiparametric estimates for ordered response models explaining this discrete variable. We find that according to the second type of information, costs of children are much larger than according to the first.     

Backup coverage models in nature reserve site selection with spatial spread risk heterogeneity

Set covering and maximal covering problems are well-known integer programming models in location analysis. Such models have also been used in reserve site selection modeling. They aim at selecting sites to conserve species, sometimes reflecting a desire to group protected sites together or to separate sites. This paper uses such models but considers the case of land heterogeneity in terms of the risk of large disturbances that threaten species even within a reserve, such as fires, diseases, pests or invasive species. It removes the classical assumption of homogeneous land sites and considers both adjacency in areas with a low risk of multi-parcel disturbance and distance between sites in areas with a high risk of a large destructive event. The models are explored in a stylized data set and applied to a portion of the state of Oregon with comparison between the standard covering models in homogeneous and heterogeneous risk settings.     

Fear and risk in the audit process

Relying on an ethnographic study conducted in the French branch of a big audit firm and using a psychodynamic perspective to interpret the collected data, we show that auditors’ sense of comfort (Pentland, 1993) arises only at the end of the audit process, and that the rest of the time, public accountants are inhabited primarily by fear. Fear plays a crucial but ambivalent role in auditing. On one hand, auditors and audit firms cultivate this feeling through informal and formal techniques to stimulate vigilance, encourage self-surpassment, mitigate the anesthetizing effect of habit and maintain reputation. On the other hand, audit teams’ members strive to alleviate their fear in order to form and convey their conclusions with a certain degree of comfort. In the field, driven by fear, they manage to finally become comfortable either by mobilizing their ‘practical intelligence’ (an intelligence of the body which helps them handle that which, in their mission, cannot be obtained through the strict execution of standardized procedures) or by adopting defensive strategies (such as distancing themselves from work-related problems, mechanically applying audit methodologies or relaxing their conception of a job well done). Fear and risk are closely related phenomena. Michael Power (2007a, p. 180) notes that ‘the significant driver of the managerialization of risk management is an institutional fear and anxiety’. Yet the experience of fear and the role that fear plays in risk management processes is most often overlooked in the literature. In this respect, our study contributes to ‘emotionalize’ and challenge the cognitive and technical orientation adopted by most academics and regulators in their understanding of audit risks and auditors’ scepticism. We also discuss a number of avenues for future research with a view to encouraging further examination of the role that emotions play in the audit process.     

The stability of decision making in committees: The one-core

We study the stability of decision making in committees. A policy proposal introduced by a committee member is either adopted or abandoned in favor of a new proposal after deliberations. If a proposal is abandoned, it is in spite of the committee member who introduced it, who does not cooperate in any effort to defeat it. Shenoy (1980) proposes the one-core as a solution concept for this game, and shows that this solution may be empty. We provide a necessary and sufficient condition for the existence of a stable policy under the majority rule. This result highlights a trade-off between the size of a committee, the number of competing policy options, and the existence of a stable outcome. Our findings imply a tension between political stability and the existence of a large number of competing interests in democracies.