Contract modifications and the basis behavior of live cattle futures

The purpose of this study was to assess the basis behavior of the Live Cattle Futures contract at the Chicago Mercantile Exchange (CME) before and after the 1995 contract changes. Additionally, an alternative method of basis calculation utilizing weighted mean futures prices versus settlement futures prices was compared to determine which method provides a better representation of the basis level. Within a regression model with heteroskedascity error framework, we found that the level of nearby basis in the period after June 1995 has shifted lower and the average monthly open interest of net commercial long positions has substantially increased after the contract modifications. These empirical results are consistent with the notion that more long activity entered the market in response to the contract modifications. Additionally, an alternative (new) measure of basis calculation (cash price minus weighted mean futures price) produced similar results to two other commonly used measures. In conclusion, the 1995 contract changes have neither increased nor decreased the volatility of live cattle basis. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:557–590, 2004     

CROSS‐DOCKING AND ITS IMPLICATIONS IN LOCATION‐DISTRIBUTION SYSTEMS

Cross‐docking replaces traditional warehousing, enabling continuous flow of items without storage. Here we model location‐distribution networks, that include cross‐docking facilities, to obtain the latter's impact on the supply chain. We formulate optimization models to minimize total cost in three multi‐echelon networks, each model generalizing the preceding one. The first includes a single manufacturer, one product type, and multiple customers. Cross‐docks are to be located between origin and destinations. Besides solving optimally, a tool for quantitative analysis of direct‐shipment decisions is developed. The second model considers more than one product: We determine a cost‐effective sequence of items for indirect shipment (via cross‐docks). Finally, in a network with multiple origins, optimal solutions are obtained for 40 medium‐sized and larger examples.     

Fragmentation, Engel's Law, and Learning

This paper outlines the conditions under which trade is beneficial for a developing country's growth. A developing country suffers from two disadvantages: low income and a comparative disadvantage in the production of modern manufactured goods—goods which allow a high rate of human capital accumulation through learning by doing. Low income together with Engel's law imply that developing countries consume and produce very few modern goods in autarky and hence grow slowly. With international fragmentation of production, a developing country may find comparative advantage in the production of some stages of modern goods despite an absence of comparative advantage in the production of modern goods under “100% local content.” More resources can then be allocated to the modern goods sector leading to greater learning externalities and hence growth under free trade than in autarky.     

EXPRESSING INVENTORY CONTROL POLICY IN THE TURNOVER CURVE

Estimation of the inventory level for an entire class of items is a valuable time saver when control of inventories at the aggregate level, rather than the item level, is of interest. Inventory approximation by location in supply chain network configuration and evaluation of inventory control policy shifts, are two examples of application. In this article, various popular inventory policies are related to a general function known as an inventory turnover curve that expresses inventory levels from the combined demand of multiple items. By knowing some basic item characteristics of representative items in a product class, the type of inventory policy being used, and the current aggregate inventory level, an inventory turnover curve can be constructed. This resulting turnover curve can be used to estimate inventory levels within 4.6%, on the average, of theoretically predicted ones.     

Using precise data sets on farming and pesticide properties to verify a diffuse pollution hydrological model for predicting pesticide concentration.

Verification of a diffuse pollution model involves comparing results actually observed with those predicted by precise model inputs. Acquisition of precise model inputs is, however, problematic. In particular, when the target catchment is large and substantial estimation uncertainty exists, not only model verification but also prediction is difficult. Therefore, in this study, rice-farming data were collected for all paddy fields from all farmers in a catchment and pesticide adsorption and degradation rates in paddy field soil samples were measured to obtain precise model inputs. The model inputs successfully verified the model's capability to predict pesticide concentrations in river water. Sensitivity analyses of the model inputs elucidated the processes significantly affecting pesticide runoff from rice farms. Pesticide adsorption and degradation rates of the soil did not significantly affect pesticide concentrations, although pesticide discharge to river water accounted for less than 50% of the total quantity of pesticide applied to fields, possibly owing to pesticide adsorption and degradation. The timing of increases in pesticide concentrations in river water was affected mostly by the farming schedule, including the time of pesticide application and irrigation, and secondarily by rainfall events.     

Comparison of the efficacy of oxidative processes and flocculation for the removal of colour from Eop effluent.

Up to 30% of the released colour arising from bleached kraft pulp and paper production comes from the alkaline extraction stage. This waste stream can therefore be readily targeted to remove colour at source in mills where improved colour management is required. The efficacy of five advanced oxidative treatment and physico-chemical technologies in removing colour from a typical Eop stage effluent was compared. The most effective oxidative treatment was peroxymonosulphate (79% colour removal in 15 minutes). Ozone and TAML treatments removed 74% and 58% of colour respectively within 30 minutes. In comparison, hydrogen peroxide alone was only able to remove 35% of the colour over 4 hours. Coagulation with polyaluminium chloride achieved 89% colour removal within 5 minutes. However, this treatment produced an undesirable sludge, and may cause toxicity in the treated wastewater. Overall, colour removal ability of the five technologies ranked from highest to lowest was polyaluminium chloride > peroxymonosulfate > ozone > TAML > hydrogen peroxide. Other factors, such as operating costs, feedstock modification and capital infrastructure, also need to be taken into account when selecting the most suitable colour management option.     

Wastewater treatment in tsunami affected areas of Thailand by constructed wetlands.

The tsunami of December 2004 destroyed infrastructure in many coastal areas in South-East Asia. In January 2005, the Danish Government gave a tsunami relief grant to Thailand to re-establish the wastewater management services in some of the areas affected by the tsunami. This paper describes the systems which have been built at three locations: (a) Baan Pru Teau: A newly-built township for tsunami victims which was constructed with the contribution of the Thai Red Cross. Conventional septic tanks were installed for the treatment of blackwater from each household and its effluent and grey water (40 m3/day) are collected and treated at a 220 m2 subsurface flow constructed wetland. (b) Koh Phi Phi Don island: A wastewater collection system for the main business and hotel area of the island, a pumping station and a pressure pipe to the treatment facility, a multi-stage constructed wetland system and a system for reuse of treated wastewater. The constructed wetland system (capacity 400 m3/day) consists of vertical flow, horizontal subsurface flow, free water surface flow and pond units. Because the treatment plant is surrounded by resorts, restaurants and shops, the constructed wetland systems are designed with terrains as scenic landscaping. (c) Patong: A 5,000 m2 constructed wetland system has been established to treat polluted water from drainage canals which collect overflow from septic tanks and grey water from residential areas. It is envisaged that these three systems will serve as prototype demonstration systems for appropriate wastewater management in Thailand and other tropical countries.