Events in Indonesia: exploring the limits to formal tourism trends forecasting methods in complex crisis situations

The desire to know the future is as old as humanity. For the tourism industry the demand for accurate foretelling of the future course of events is a task that consumes considerable energy and is of great significance to investors. This paper examines the issue of forecasting by comparing forecasts of inbound tourism made prior to the political and economic crises that engulfed Indonesia from 1997 onwards with actual arrival figures. The paper finds that current methods of forecasting are not able to cope with unexpected crises and other disasters and that alternative methods need to be examined including scenarios, political risk and application of chaos theory. The paper outlines a framework for classifying shocks according to a scale of severity, probability, type of event, level of certainty and suggested forecasting tools for each scale of shock. (C) 2003 Elsevier Science Ltd. All rights reserved.

Optimal reliability improvement for used items sold with warranty

The market for used products is becoming more competitive and dealers of used products use warranty to promote sales as well as to provide assurnace to customers. Offering warranty results in additional costs associated with warranty servicing. This cost can be reduced through actions such as overhaul and upgrade that improves the reliability of the item. This is worthwhile only if the cost of improvement is less than the reduction in the warranty servicing cost. This paper deals with two models to decide on the reliability improvement strategies for used items sold with FRW policy.

Product warranty logistics: Issues and challenges

Warranty is an important element of marketing new products. The servicing of warranty results in additional costs to the manufacturer. Warranty logistics deals with various issues relating to the servicing of warranty. Proper management of warranty logistics is needed not only to reduce the warranty servicing cost but also to ensure customer satisfaction as customer dissatisfaction has a negative impact on sales and revenue. Unfortunately, warranty logistics has received very little attention. The paper links the literature on warranty and on logistics and then discusses the different issues in warranty logistics. It highlights the challenges and identifies some research topics of potential interest to operational researchers. (C) 2003 Elsevier B.V. All rights reserved.

Warranty and discrete preventive maintenance

Preventive maintenance actions over the warranty period have an impact on the warranty servicing cost to the manufacturer and the cost to the buyer of fixing failures over the life of the product after the warranty expires. However, preventive maintenance costs money and is worthwhile only when these costs exceed the reduction in other costs. The paper deals with a model to determine when preventive maintenance actions (which rejuvenate the unit) carried out at discrete time instants over the warranty period are worthwhile. The cost of preventive maintenance is borne by the buyer. (C) 2003 Elsevier Ltd. All rights reserved.

Warranty servicing strategies to improve customer satisfaction

Customer satisfaction with a purchased product depends on its performance under warranty and during the remainder of its useful life. Dissatisfaction with an item is important to a manufacturer since it can lead to the loss of potential customers through the negative word-of-mouth effect as well as existing customers switching to a competitor. In this paper, we define satisfaction in terms of the likelihood of a customer not switching to a different manufacturer when a new item needs to be purchased. Manufacturers can use specific servicing strategies to reduce warranty costs and this topic has already been addressed in the literature without considering the effect of customer dissatisfaction. In this paper, we propose particular strategies that will increase customer satisfaction and we discuss methods for obtaining the optimal parameters of these strategies.

Forecasting with serially correlated regression models

In this article we investigate the asymptotic and finite-sample properties of predictors of regression models with autocorrelated errors. We prove new theorems associated with the predictive efficiency of generalized least squares (GLS) and incorrectly structured GLS predictors. We also establish the form associated with their predictive mean squared errors as well as the magnitude of these errors relative to each other and to those generated from the ordinary least squares (OLS) predictor. A large simulation study is used to evaluate the finite-sample performance of forecasts generated from models using different corrections for the serial correlation.

Forecasting stock returns using model-selection criteria

This paper examines the economic significance of return predictability in Australian equities. In light of considerable model uncertainty, formal model-selection criteria are used to choose a specification for the predictive model. A portfolio-switching strategy is implemented according to model predictions. Relative to a buy-and-hold market investment, the returns to the portfolio-switching strategy are impressive under several model-selection criteria, even after accounting for transaction costs. However, as these findings are not robust across other model-selection criteria examined, it is difficult to conclude that the degree of return predictability is economically significant.

A simple regional-scale model for forecasting sorghum yield across North-Eastern Australia

Sorghum is the main dryland summer crop in NE Australia and a number of agricultural businesses would benefit from an ability to forecast production likelihood at regional scale. In this study we sought to develop a simple agro-climatic modelling approach for predicting shire (statistical local area) sorghum yield. Actual shire yield data, available for the period 1983-1997 from the Australian Bureau of Statistics, were used to train the model. Shire yield was related to a water stress index (SI) that was derived from the agro-climatic model. The model involved a simple fallow and crop water balance that was driven by climate data available at recording stations within each shire. Parameters defining the soil water holding capacity, maximum number of sowings (MXNS) in any year, planting rainfall requirement, and critical period for stress during the crop cycle were optimised as part of the model fitting procedure. Cross-validated correlations (CVR) ranged from 0.5 to 0.9 at shire scale. When aggregated to regional and national scales, 78-84% of the annual variation in sorghum yield was explained. The model was used to examine trends in sorghum productivity and the approach to using it in an operational forecasting system was outlined. (c) 2005 Elsevier B.V. All rights reserved.

A new repair-replace strategy for items sold with a two-dimensional warranty

For repairable items, the manufacturer has the option to either repair or replace a failed item that is returned under warranty. In this paper, we look at a new warranty servicing strategy for items sold with two-dimensional warranty where the failed item is replaced by a new one when it fails for the first time in a specified region of the warranty and all other failures are repaired minimally. The region is characterised by two parameters and we derive the optimal values for these to minimise the total expected warranty servicing cost. We compare the results with other repair-replace strategies reported in the literature. (C) 2003 Elsevier Ltd. All rights reserved.

Forecasting Helicoverpa populations in Australia: A comparison of regression based models and a bio-climatic based modeling approach

Long-term forecasts of pest pressure are central to the effective management of many agricultural insect pests. In the eastern cropping regions of Australia, serious infestations of Helicoverpa punctigera (Wallengren) and H. armigera (Hübner)(Lepidoptera: Noctuidae) are experienced annually. Regression analyses of a long series of light-trap catches of adult moths were used to describe the seasonal dynamics of both species. The size of the spring generation in eastern cropping zones could be related to rainfall in putative source areas in inland Australia. Subsequent generations could be related to the abundance of various crops in agricultural areas, rainfall and the magnitude of the spring population peak. As rainfall figured prominently as a predictor variable, and can itself be predicted using the Southern Oscillation Index (SOI), trap catches were also related to this variable. The geographic distribution of each species was modelled in relation to climate and CLIMEX was used to predict temporal variation in abundance at given putative source sites in inland Australia using historical meteorological data. These predictions were then correlated with subsequent pest abundance data in a major cropping region. The regression-based and bioclimatic-based approaches to predicting pest abundance are compared and their utility in predicting and interpreting pest dynamics are discussed.

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.

Product warranty and reliability

Product warranty is an important part of new product marketing and sales. Offering warranty implies additional costs in the form of warranty servicing cost. Product reliability has a serious impact on the warranty servicing cost. As such, effective management of product reliability must take into account the link between warranty and reliability. This paper deals with this topic and develops a framework needed for effective management of product reliability. It reviews the relevant literature and defines topics for future research.

Warranty cost analysis for second-hand products

For second-hand products sold with warranty, the expected warranty cost for an item to the manufacturer, depends on (i) the age and/or usage as well as the maintenance history for the item and (ii) the terms of the warranty policy. The paper develops probabilistic models to compute the expected warranty cost to the manufacturer when the items are sold with free replacement or pro rata warranties. (C) 2000 Elsevier Science Ltd. All rights reserved.