New Results Concerning Probability Distributions with Increasing Generalized Failure Rates

The generalized failure rate of a continuous random variable has demonstrable importance in operations management. If the valuation distribution of a product has an increasing generalized failure rate (that is, the distribution is IGFR), then the associated revenue function is unimodal, and when the generalized failure rate is strictly increasing, the global maximum is uniquely specified. The assumption that the distribution is IGFR is thus useful and frequently held in recent pricing, revenue, and supply chain management literature. This note contributes to the IGFR literature in several ways. First, it investigates the prevalence of the IGFR property for the left and right truncations of valuation distributions. Second, we extend the IGFR notion to discrete distributions and contrast it with the continuous distribution case. The note also addresses two errors in the previous IGFR literature. Finally, for future reference, we analyze all common (continuous and discrete) distributions for the prevalence of the IGFR property, and derive and tabulate their generalized failure rates.

Government Influence and the Failure of Fannie Mae and Freddie Mac

In 2008 two government-sponsored enterprises, Fannie Mae and Freddie Mac, were placed into conservatorship due to insolvency. The financial bailout of the two publically traded corporations came at the expense of the American tax payer. This study investigates the relationship between direct and indirect government influence and the increasing risk taking of Fannie Mae and Freddie Mac from the late 1990’s through their conservatorship in 2008. As government-sponsored enterprises Fannie Mae and Freddie Mac have many special advantages that other publically traded companies did not possess. These advantages allowed Fannie Mae and Freddie Mac to increase their profitability. Theoretical literature regarding Congress and the bureaucracy suggests that the actions of bureaucrats can be linked to the preferences of Congressional members because bureaucrats are responsive to potential threats or perceived threats from the legislature. This theory is applicable to Fannie Mae and Freddie Mac, and is used to explain why the government was able to directly and indirectly influence the government-sponsored enterprises. Overall this investigation has determined that the United States government pursued a clear mission that determined to increase the availability of housing to all Americans, specifically to low-income and under-served individuals, through the use of the government-sponsored enterprises. Despite this link there is no conclusive data to show that the pursuit of this housing mission led Fannie Mae and Freddie Mac to operate in riskier business segments. This study has also found that motivation regarding profit-seeking and compensation structure provide a more plausible explanation for why the government-sponsored enterprises began to engage in riskier business practices that led to their insolvency.

Slow Strain Rate Testing and Stress Corrosion Cracking of Ultra-Fine Grained and Conventional Al-Mg Alloy

Stress corrosion cracking susceptibility was investigated for an ultra-fine grained (UFG) AI-7.5Mg alloy and a conventional 5083 H111 alloy in natural seawater using slow strain rate testing (SSRT) at very slow strain rates between 1E(-5) s(-1), 1E(-6) s(-1) and 1E(-7) s(-1). The UFG Al-7.5Mg alloy was produced by cryomilling, while the 5083 H111 alloy is considered as a wrought manufactured product. The response of tensile properties to strain rate was analyzed and compared. Negative strain rate sensitivity was observed for both materials in terms of the elongation to failure. However, the UFG alloy displayed strain rate sensitivity in relation to strength while the conventional alloy was relatively strain rate insensitive. The mechanical behavior of the conventional 5083 alloy was attributed to dynamic strain aging (DSA) and delayed pit propagation while the performance of the UFG alloy was related to a diffusion-mediated stress relaxation mechanism that successfully delayed crack initiation events, counteracted by exfoliation and pitting which enhanced crack initiation. (C) 2014 Elsevier B.V. All rights reserved.