A structural analysis of process development in process industry: A new classification system for strategic project selection and portfolio balancing

A research project on the development of process technology in process industry led to recognition of the importance of a better classification of different types of process development. A new classification system and matrix have consequently been developed, using the dimensions 'newness to the world' and 'newness to the company'. The distribution of annual company expenditures for process development in the matrix and the estimated usability of the matrix have been tested as part of a larger survey conducted among R&D managers in European process industry. In view of the favourable response from industry, it is argued that the matrix could facilitate company portfolio balancing of process development projects, and that it is also necessary to distinguish between different types of process development in academic research.     

Commutation functions under Gompertz–Makeham mortality

It is known, but perhaps not well-known, that when the mortality is assumed to be of Gompertz–Makeham-type, the expected remaining life-length and the commutation functions used for calculating the expected values of various types of life insurances can be expressed with an incomplete gamma function with a negative shape parameter. This is not of much use if ones software cannot calculate these values. The aim of this note is to show that one can express the commutation functions using only the exponential function, the (ordinary) gamma function and the gamma distribution function, which are all implemented in common statistical and spreadsheet software. This eliminates the need to evaluate the commutation functions and expected remaining life-length with numerical integration.     

Treatment of Fixed Capital in the Sraffian Framework and in the Theory of Dynamic Input–Output Models

This paper is concerned with a comparison of the treatment of fixed capital in some multi-sectoral models. First, the dynamic Leontief model is investigated. Scrutiny shows that this model suffers from conceptual misconceptions which result from restrictive assumptions concerning full-capacity production and the transferability of capital in place, and from the definition of technical coefficients. Whereas most input–output (IO) models are based on the assumption of infinite life of fixed capital, the Sraffian concept is to treat used fixed capital items as ‘intermediate’ goods, which appear as joint products until they are worn out. To compare that approach with some IO models, an application of the concept of a ‘plant’ is provided. Finally, it is demonstrated that Leontief's model, as well as some recent generalizations, are special cases of a Sraffa-von Neumann type of model.     

QFD—linking the customer to the product development process as a part of the TQM concept

LKAB is one of the world's leading sup-pliers of advanced iron ore products. Its most important markets are the blast furnace based steelworks of Europe. As a result of customers' demands for ever-better products, LKAB has begun to apply Quality Function Deployment (QFD) to its product development pro-grammes. QFD, originally developed in Japan, is a technique which utilises a series of matrices to translate customers' requirements into technical specifications that the producer can use. So far the methodology has mainly been used in the manufacturing industry, with very few applications in process industry.
When launching its QFD project, LKAB began by making strenuous efforts to acquire credible and relevant customer data. Experience after one year's work has been encouraging; the QFD technique has proved to be an effective instrument for feeding customers' requirements into the product development process. In addition, it serves as a guide to setting priorities for research projects. The technique promises to become an established tool in the cornpany's Total Quality Management programme.     

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Ohne Zusammenfassung     

Prices of Goods' and ‘Bads’: An Application of the Ricardian Theory of Differential Rent

Pollutants, wastes and scrap appear as joint products of consumption or production processes. Leontief and other authors extend input–output (IO) tables such that additional products and industries, respectively, account for pollutants and abatement activities; they also analyze the effects of pollution control policies, by means of traditional IO methods. This approach does not account for choice of technique and, therefore, neglects the possibility of substitution. This paper proposes to utilize Ricardo's theory of differential rent, which is based on the possibility of coexisting technical alternatives.     

A Note on Non‐Stationary Prices

The concepts of ‘real'’ and ‘nominal’ values or ‘real’ and ‘nominal’ rates of profit in the presence of non‐stationary prices are discussed. It is shown that the rate of profit depends on the choice of the numeraire if—and only if—relative prices change over time. In this case there are as many real rates as there are products, factors or bundles of products and factors. Although the rate of profit may vary with the choice of the numeraire, the ranking of processes according to profitability—and hence the choice of technique—is not affected.     

Joint Production with ‘Restricted Free Disposal’

A single production system with constant returns can produce any level and composition of demand by appropriate intensities of the cost‐minimizing processes. Hence, in the long run, products can never be in excess supply and there exists a system of prices of production which is semipositive and independent of demand. These (and other) properties do not, in general, carry over to joint production systems where one or several processes produce two or more different products. The proportions in which products emerge will generally be different from those in which they are required for use. The usual approach to that problem is to apply the rule of ‘free goods’. This assumption may be applied to goods which, if they are left where they are and as they are, cause neither costs nor benefits. But it cannot be applied to outworn machines, scrap, wastes or pollutants and is therefore not generally applicable. The present paper aims at finding conditions for the existence of cost‐minimizing systems for cases where this crucial assumption either is completely absent or is substituted by the assumption of ‘restricted free disposal’, i.e. by the assumption that excess production is permitted up to a certain tolerated limit. It will be proved that the conditions for the existence of cost‐minimizing systems with free disposal carry over to systems with restricted free disposal.     

ENVIRONMENTAL TAXES,RELATIVE PRICES AND CHOICE OF TECHNIQUE IN A LINEAR MODEL OF PRODUCTION

A classical model of production is used to study the effects of environmental taxes on relative prices and on the choice of technique. It is shown that a taxation of energy inputs can induce cost-minimizing producers to switch to a technique that requires more total energy. An explanation for such a ‘perverse’ substitution is provided by showing that with a positive rate of profits the relative prices of (relatively) energy-intensive products can be higher with a higher tax rate.