New Products and Financial Risk Changes

The historic focus of new products research has been on the ability of new products to enhance the profitability and competitive position of the innovating firm. In this article, Timothy Devinney shows that there exists an overlooked and potentially significant side effect associated with new product innovations: financial risk changes. He reports that significant financial risk changes occurred in approximately 50% of the new product announcements he examined. The magnitude of these financial risk changes translates into overestimates or underestimates of the firm's cost of capital by 17% to 18% and is strongly and positively related to the size of the firm and the firm's new product innovation activity.     

Using an approximate kiefer-weiss solution for testing insect population densities

Summary A sequential testing procedure called 2-SPRT for the meanμ of the negative binomial distribution with known exponentk is presented. For any fixedμ ₀(μ ₁<μ ₀<μ ₂), the 2-SPRT provides an asymptotic solution to the modified Kiefer-Weiss problem. Determination ofμ ₀ such that the test provides an approximate solution to the Kiefer-Weiss problem is described. The behavior of the 2-SPRT and the Sequential Probability Ratio Test is investigated using Monte Carlo methods. The error probabilities and the average sample numbers are compared. All the computations were carried out on the Alabama Supercomputer.     

Simulation of leachate migration in leaky aquifers

A two-dimensional cross-section finite difference model is presented to simulate density dependent leachate migration in leaky aquifers. Unlike existing models, a new approach is adopted to couple the groundwater-flow equation and the hydrodynamic dispersion equation with the elimination of the intermediate step of calculating velocities. The concept of the reference density is employed, permitting increased accuracy (over pressure-based models) in the representation of the transport process. The model is then used to study the effect of several hydraulic and transport parameters on the flow pattern and plume migration which are found to be very sensitive to most of these parameters. Equiconcentration and equipotential lines are overlapped to provide a better understanding of the coupling effect.     

On invariant parametric covariance families

Summary In this note we characterize all linear transformations of random vectors which are invariant for a given parametric covariance family. Two one-dimensional covariance families are discussed in detail.     

A self‐correction technique for real‐time simulation of regulated rivers

An automatic self‐correction scheme is presented for online adjustment of stream‐flow forecasts during simulation of river systems with regulating structures, when actual flow data for interior points are available in real time. Another scheme is presented which allows for the modelling of channel losses due to physical effects such as evapotranspiration, bank storage and diversions. A previously developed river simulation/reservoir management model has been modified to include both schemes. The model is particularly useful for real‐time, short‐term flood forecasting and reservoir operation. The model application is made to the Lower Colorado River in Texas.