Vector Error-Correction Models in a consumer packaged goods category forecasting decision support system

A framework for developing marketing category management decision support systems (DSS) based upon the Bayesian Vector Autoregressive (BVAR) model is extended. Since the BVAR model is vulnerable to permanent and temporary shifts in purchasing patterns over time, a form that can correct for the shifts and still provide the other advantages of the BVAR is a Bayesian Vector Error-Correction Model (BVECM). We present the mechanics of extending the DSS to move from a BVAR model to the BVECM model for the category management problem. Several additional iterative steps are required in the DSS to allow the decision maker to arrive at the best forecast possible. The revised marketing DSS framework and model fitting procedures are described. Validation is conducted on a sample problem.

Debiasing the outcome effect: The role of instructions in an audit litigation setting

The outcome effect occurs where an evaluator, who has knowledge of the outcome of a judge's decision , assesses the quality of the judgment of that decision maker. If the evaluator has knowledge of a negative outcome, then that knowledge negatively influences his or her assessment of the ex ante judgment. For instance, jurors in a lawsuit brought against an auditor for alleged negligence are informed of an undetected fraud, even though an unqualified opinion was issued. This paper reports the results of an experiment in an applied audit judgment setting that examined methods of mitigating the outcome effect by means of instructions. The results showed that simply instructing or warning the evaluator about the potential biasing effects of outcome information was only weakly effective. However, instructions that stressed either (1) the cognitive non-normativeness of the outcome effect or (2) the seriousness and gravity of the evaluation ameliorated the effect significantly. From a theoretical perspective, the results suggest that there may both motivational and cognitive components to the outcome effect. In all, the findings suggest awareness of the outcome effect and use of relatively nonintrusive instructions to evaluators may effectively counteract the potential for the outcome bias.

Nonstationary brand variables in category management: A cointegration perspective

Category-management models serve to assist in the development of plans for pricing and promotions of individual brands. Techniques to solve the models can have problems of accuracy and interpretability because they are susceptible to spurious regression problems due to nonstationary time-series data. Improperly stated nonstationary systems can reduce the accuracy of the forecasts and undermine the interpretation of the results. This is problematic because recent studies indicate that sales are often a nonstationary time-series. Newly developed correction techniques can account for nonstationarity by incorporating error-correction terms into the model when using a Bayesian Vector Error-Correction Model. The benefit of using such a technique is that shocks to control variates can be separated into permanent and temporary effects and allow cointegration of series for analysis purposes. Analysis of a brand data set indicates that this is important even at the brand level. Thus, additional information is generated that allows a decision maker to examine controllable variables in terms of whether they influence sales over a short or long duration. Only products that are nonstationary in sales volume can be manipulated for long-term profit gain, and promotions must be cointegrated with brand sales volume. The brand data set is used to explore the capabilities and interpretation of cointegration.

Intuition: Myth or a Decision-making Tool?

Faced with today’s ill-structured business environment of fast-paced change and rising uncertainty, organizations have been searching for management tools that will perform satisfactorily under such ambiguous conditions. In the arena of managerial decision making, one of the approaches being assessed is the use of intuition. Based on our definition of intuition as a non-sequential information-processing mode, which comprises both cognitive and affective elements and results in direct knowing without any use of conscious reasoning, we develop a testable model of integrated analytical and intuitive decision making and propose ways to measure the use of intuition.

Australian import managers' purchasing decision behaviour: An empirical study

Reports a pilot study of the relative importance of import decision variables as rated by Australian managers. A systematic sample qi 104 Australian managers representing different companies participated in the study. Australian importers rated product quality as the most important variable when importing products from overseas followed by long-term suppliers' dependability, product style/feature, price, and timely delivery. Australian managers who import consumer products find the domestic import duties and tariffs to be more important than did those who import industrial products. Larger volume importers regard the product brand name reputation to be more important than did those who import smaller volumes.

Volunteer decision making by older people: A test of a revised theory of planned behavior

This study was designed to test the utility of a revised theory of planned behavior in the prediction of intentions to volunteer among older people. Such a perspective allowed for the consideration of a broader range of social and contextual factors than has been examined in previous research on volunteer decision making among older people. The article reports the findings from a study that investigated volunteer intentions and behavior in a random sample of older people aged 65 to 74 years living in an Australian capital city. Results showed that, as predicted by the revised theory of planned behavior, intention to volunteer predicted subsequent reported volunteer behavior. Intention was, in turn, predicted by social norms (both subjective and behavioral), perceived behavioral control, and moral obligation, with the effect of attitude being mediated through moral obligation.

Assisting decision-making in Queensland barley production through chance constrained programming

A chance constrained programming model is developed to assist Queensland barley growers make varietal and agronomic decisions in the face of changing product demands and volatile production conditions. Unsuitable or overlooked in many risk programming applications, the chance constrained programming approach nonetheless aptly captures the single-stage decision problem faced by barley growers of whether to plant lower-yielding but potentially higher-priced malting varieties, given a particular expectation of meeting malting grade standards. Different expectations greatly affect the optimal mix of malting and feed barley activities. The analysis highlights the suitability of chance constrained programming to this specific class of farm decision problem.

Screening for leprosy in immigrants: A decision analysis model

Almost all leprosy cases reported in industrialized countries occur amongst immigrants or refugees from developing countries where leprosy continues to be an important health issue. Screening for leprosy is an important question for governments in countries with immigration and refugee programmes. A decision analysis framework is used to evaluate leprosy screening. The analysis uses a set of criteria and parameters regarding leprosy screening, and available data to estimate the number of cases which would be detected by a leprosy screening programme of immigrants from countries with different leprosy prevalences, compared with a policy of waiting for immigrants who develop symptomatic clinical diseases to present for health care. In a cohort of 100,000 immigrants from high leprosy prevalence regions (3.6/10,000), screening would detect 32 of the 42 cases which would arise in the destination country over the 14 years after migration; from medium prevalence areas (0.7/10,000) 6.3 of the total 8.1 cases would be detected, and from low prevalence regions (0.2/10,600) 1.8 of 2.3 cases. Using Australian data, the migrant mix would produce 74 leprosy cases from 10 years intake; screening would detect 54, and 19 would be diagnosed subsequently after migration. Screening would only produce significant case-yield amongst immigrants from regions or social groups with high leprosy prevalence. Since the number of immigrants to Australia from countries of higher endemnicity is not large routine leprosy screening would have a small impact on case incidence.

Australia-wide predictions of soil properties using decision trees

This paper describes the construction of Australia-wide soil property predictions from a compiled national soils point database. Those properties considered include pH, organic carbon, total phosphorus, total nitrogen, thickness. texture, and clay content. Many of these soil properties are used directly in environmental process modelling including global climate change models. Models are constructed at the 250-m resolution using decision trees. These relate the soil property to the environment through a suite of environmental predictors at the locations where measurements are observed. These models are then used to extend predictions to the continental extent by applying the rules derived to the exhaustively available environmental predictors. The methodology and performance is described in detail for pH and summarized for other properties. Environmental variables are found to be important predictors, even at the 250-m resolution at which they are available here as they can describe the broad changes in soil property.

The effect of defendant gender on juror decision-making

Research investigating the role of stereotypes in jury decision-making has typically considered stereotypes as acting as peripheral cues in determin ing the credibility of experts or likelihood of guilt of defendants — with counter-stereotypic courtroom participants faring less well. The present study investigated the possibility that the extent to which courtroom participants are stereotypic can alter the mode of information processing. Students (N = 78) read a transcript of a case in which either a male or female allegedly committed an armed robbery. As predicted, the female counter-stereotypic defendant was distracting and effortful processing only occurred when the defendant was male. The male was seen as more guilty and the prosecution's case was more convincing when the prosecution had a strong, but not weak, case. There were no effects of case strength for the female defendant. Results are discussed in terms of the role of stereotypes in the jury decision-making.