Key Factors Influencing Economic Relationships and Communication in Finnish Food Chains

The aim of this report is to discuss the role of the relationship type and communication in two Finnish food chains, namely the pig meat-to-sausage (pig meat chain) and the cereal-to-rye bread (rye chain) chains. Furthermore, the objective is to examine those factors influencing the choice of a relationship type and the sustainability of a business relationship. Altogether 1808 questionnaires were sent to producers, processors and retailers operating in these two chains of which 224 usable questionnaires were returned (the response rate being 12.4%). The great majority of the respondents (98.7%) were small businesses employing less than 50 people. Almost 70 per cent of the respondents were farmers. In both chains, formal contracts were stated to be the most important relationship type used with business partners. Although for many businesses written contracts are a common business practice, the essential role of the contracts was the security they provide regarding the demand/supply and quality issues. Relative to the choice of the relationship types, the main difference between the two chains emerged especially with the prevalence of spot markets and financial participation arrangements. The usage of spot markets was significantly more common in the rye chain when compared to the pig meat chain, while, on the other hand, financial participation arrangements were much more common among the businesses in the pig meat chain than in the rye chain. Furthermore, the analysis showed that most of the businesses in the pig meat chain claimed not to be free to choose the relationship type they use. Especially membership in a co-operative and practices of a business partner were mentioned as the reasons limiting this freedom of choice. The main business relations in both chains were described as having a long-term orientation and being based on formal written contracts. Typical for the main business relationships was also that they are not based on the existence of the key persons only; the relationship would remain even if the key people left the business. The quality of these relationships was satisfactory in both chains and across all the stakeholder groups, though the downstream processors and the retailers had a slightly more positive view on their main business partners than the farmers and the upstream processors. The businesses operating in the pig meat chain seemed also to be more dependent on their main business relations when compared to the businesses in the rye chain. Although the communication means were rather similar in both chains (the phone being the most important), there was some variation between the chains concerning the communication frequency necessary to maintain the relationship with the main business partner. In short, the businesses in the pig meat chain seemed to appreciate more frequent communication with their main business partners when compared to the businesses in the rye chain. Personal meetings with the main business partners were quite rare in both chains. All the respondent groups were, however, fairly satisfied with the communication frequency and information quality between them and the main business partner. The business cultures could be argued to be rather hegemonic among the businesses both in the pig meat and rye chains. Avoidance of uncertainty, appreciation of long-term orientation and independence were considered important factors in the business cultures. Furthermore, trust, commitment and satisfaction in business partners were thought to be essential elements of business operations in all the respondent groups. In order to investigate which factors have an effect on the choice of a relationship type, several hypotheses were tested by using binary and multinomial logit analyses. According to these analyses it could be argued that avoidance of uncertainty and risk has a certain effect on the relationship type chosen, i.e. the willingness to avoid uncertainty increases the probability to choose stable relationships, like repeated market transactions and formal written contracts, but not necessary those, which require high financial commitment (like financial participation arrangements). The probability of engaging in financial participation arrangements seemed to increase with long-term orientation. The hypotheses concerning the sustainability of the economic relations were tested by using structural equation model (SEM). In the model, five variables were found to have a positive and statistically significant impact on the sustainable economic relationship construct. Ordered relative to their importance, those factors are: (i) communication quality, (ii) personal bonds, (iii) equal power distribution, (iv) local embeddedness and (v) competition.

The Day of the Week Effect and Option Pricing - A Study of the German Option Market

The use of different time units in option pricing may lead to inconsistent estimates of time decay and spurious jumps in implied volatilities. Different time units in the pricing model leads to different implied volatilities although the option price itself is the same.The chosen time unit should make it necessary to adjust the volatility parameter only when there are some fundamental reasons for it and not due to wrong specifications of the model. This paper examined the effects of option pricing using different time hypotheses and empirically investigated which time frame the option markets in Germany employ over weekdays. The paper specifically tries to get a picture of how the market prices options. The results seem to verify that the German market behaves in a fashion that deviates from the most traditional time units in option pricing, calendar and trading days. The study also showed that the implied volatility of Thursdays was somewhat higher and thus differed from the pattern of other days of the week. Using a GARCH model to further investigate the effect showed that although a traditional tests, like the analysis of variance, indicated a negative return for Thursday during the same period as the implied volatilities used, this was not supported using a GARCH model.

Inventory Routing - A Strategic Management Accounting Perspective

This dissertation develops a strategic management accounting perspective of inventory routing. The thesis studies the drivers of cost efficiency gains by identifying the role of the underlying cost structure, demand, information sharing, forecasting accuracy, service levels, vehicle fleet, planning horizon and other strategic factors as well as the interaction effects among these factors with respect to performance outcomes. The task is to enhance the knowledge of the strategic situations that favor the implementation of inventory routing systems, understanding cause-and-effect relationships, linkages and gaining a holistic view of the value proposition of inventory routing. The thesis applies an exploratory case study design, which is based on normative quantitative empirical research using optimization, simulation and factor analysis. Data and results are drawn from a real world application to cash supply chains. The first research paper shows that performance gains require a common cost component and cannot be explained by simple linear or affine cost structures. Inventory management and distribution decisions become separable in the absence of a set-dependent cost structure, and neither economies of scope nor coordination problems are present in this case. The second research paper analyzes whether information sharing improves the overall forecasting accuracy. Analysis suggests that the potential for information sharing is limited to coordination of replenishments and that central information do not yield more accurate forecasts based on joint forecasting. The third research paper develops a novel formulation of the stochastic inventory routing model that accounts for minimal service levels and forecasting accuracy. The developed model allows studying the interaction of minimal service levels and forecasting accuracy with the underlying cost structure in inventory routing. Interestingly, results show that the factors minimal service level and forecasting accuracy are not statistically significant, and subsequently not relevant for the strategic decision problem to introduce inventory routing, or in other words, to effectively internalize inventory management and distribution decisions at the supplier. Consequently the main contribution of this thesis is the result that cost benefits of inventory routing are derived from the joint decision model that accounts for the underlying set-dependent cost structure rather than the level of information sharing. This result suggests that the value of information sharing of demand and inventory data is likely to be overstated in prior literature. In other words, cost benefits of inventory routing are primarily determined by the cost structure (i.e. level of fixed costs and transportation costs) rather than the level of information sharing, joint forecasting, forecasting accuracy or service levels.

Temperature-Sensitive Src-Transformed Mdck Cells nn 3d Cultures as a Model of Malignant Transformation of Epithelial Cells

The equilibrium between cell proliferation, differentiation, and apoptosis is crucial for maintaining homeostasis in epithelial tissues. In order for the epithelium to function properly, individual cells must gain normal structural and functional polarity. The junctional proteins have an important role both in binding the cells together and in taking part in cell signaling. Cadherins form adherens junctions. Cadherins initiate the polarization process by first recognizing and binding the neighboring cells together, and then guiding the formation of tight junctions. Tight junctions form a barrier in dividing the plasma membranes to apical and basolateral membrane domains. In glandular tissues, single layered and polarized epithelium is folded into tubes or spheres, in which the basal side of the epithelial layer faces the outer basal membrane, and the apical side the lumen. In carcinogenesis, the differentiated architecture of an epithelial layer is disrupted. Filling of the luminal space is a hallmark of early epithelial tumors in tubular and glandular structures. In order for the transformed tumor cells to populate the lumen, enhanced proliferation as well as inhibition of apoptosis is required. Most advances in cancer biology have been achieved by using two-dimensional (2D) cell culture models, in which the cells are cultured on flat surfaces as monolayers. However, the 2D cultures are limited in their capacity to recapitulate the structural and functional features of tubular structures and to represent cell growth and differentiation in vivo. The development of three-dimensional (3D) cell culture methods enables the cells to grow and to be studied in a more natural environment. Despite the wide use of 2D cell culture models and the development of novel 3D culture methods, it is not clear how the change of the dimensionality of culture conditions alters the polarization and transformation process and the molecular mechanisms behind them. Src is a well-known oncogene. It is found in focal and adherens junctions of cultured cells. Active src disrupts cell-cell junctions and interferes with cell-matrix binding. It promotes cell motility and survival. Src transformation in 2D disrupts adherens junctions and the fibroblastic phenotype of the cells. In 3D, the adherens junctions are weakened, and in glandular structures, the lumen is filled with nonpolarized vital cells. Madin-Darby canine kidney (MDCK) cells are an epithelial cell type commonly used as a model for cell polarization. Its-src-transformed variants are useful model systems for analyzing the changes in cell morphology, and they play a role in src-induced malignant transformation. This study investigates src-transformed cells in 3D cell cultures as a model for malignant transformation. The following questions were posed. Firstly: What is the role of the composition and stiffness of the extracellular matrix (ECM) on the polarization and transformation of ts v-src MDCK cells in 3D cell cultures? Secondly: How do the culture conditions affect gene expression? What is the effect of v-src transformation in 2D and in 3D cell models? How does the shift from 2D to 3D affect cell polarity and gene expression? Thirdly: What is the role of survivin and its regulator phosphatase and tensin homolog protein (PTEN) in cell polarization and transformation, and in determining cell fate? How does their expression correlate with impaired mitochondrial function in transformed cells? In order to answer the above questions, novel methods of culturing and monitoring cells had to be created: novel 3D methods of culturing epithelial cells were engineered, enabling real time monitoring of a polarization and transformation process, and functional testing of 3D cell cultures. Novel 3D cell culture models and imaging techniques were created for the study. Attention was focused especially on confocal microscopy and live-cell imaging. Src-transformation disturbed the polarization of the epithelium by disrupting cell adhesion, and sensitized the cells to their environment. With active src, the morphology of the cell cluster depended on the composition and stiffness of the matrix. Gene expression studies revealed a broader impact of src transformation than mere continuous activity of src-kinase. In 2D cultures, src transformation altered the expression of immunological, actin cytoskeleton and extracellular matrix (ECM). In 3D, the genes regulating cell division, inhibition of apoptosis, cell metabolism, mitochondrial function, actin cytoskeleton and mechano-sensing proteins were altered. Surprisingly, changing the culture conditions from 2D to 3D affected also gene expression considerably. The microarray hit survivin, an inhibitor of apoptosis, played a crucial role in the survival and proliferation of src-transformed cells.