The implications of cost behaviour for profit planning and control

The work described in the following pages was carried out at various sites in the Rod Division of the Delta Metal Company. Extensive variation in the level of activity in the industry during the years 1974 to I975 had led to certain inadequacies being observed 1n the traditional cost control procedure. In an attempt to remedy this situation it was suggested that a method be found of constructing a system to improve the flexibility of cost control procedures. The work involved an assimilation of the industrial and financial environment via pilot studies which would later prove invaluable to home in on the really interesting and important areas. Weaknesses in the current systems which came to light made the methodology of data collection and the improvement of cost control and profit planning procedures easier to adopt. Because of the requirements of the project to investigate the implications of Cost behaviour for profit planning and control, the next stage of the research work was to utilise the on-site experience to examine at a detailed level the nature of cost behaviour. The analysis of factory costs then showed that certain costs, which were the most significant exhibited a stable relationship with respect to some known variable, usually a specific measure of Output. These costs were then formulated in a cost model, to establish accurate standards in a complex industrial setting in order to provide a meaningful comparison against which to judge actual performance. The necessity of a cost model was •reinforced by the fact that the cost behaviour found to exist was, in the main, a step function, and this complex cost behaviour, the traditional cost and profit planning procedures could not possibly incorporate. Already implemented from this work is the establishment of the post of information officer to co-ordinate data collection and information provision.

Perils of managing the service profit chain:the role of time lags and feedback loops

The tendency of managers to focus on short-term results rather than on sustained company success is of particular importance to retail marketing managers, because marketing activities involve expenditures which may only pay off in the longer term. To address the issue of myopic management, our study shows how the complexity of the service profit chain (SPC) can cause managers to make suboptimal decisions. Hence, our paper departs from past research by recognizing that understanding the temporal interplay between operational investments, employee satisfaction, customer satisfaction, and operating profit is essential to achieving sustained success. In particular, we intend to improve understanding of the functioning of the SPC with respect to time lags and feedback loops. Results of our large-scale longitudinal study set in a multi-outlet retail chain reveal time-lag effects between operational investments and employee satisfaction, as well as between customer satisfaction and performance. These findings, along with evidence of a negative interaction effect of employee satisfaction on the relationship between current performance and future investments, show the substantial risk of mismanaging the SPC. We identify specific situations in which the dynamic approach leads to superior marketing investment decisions, when compared to the conventional static view of the SCP. These insights provide valuable managerial guidance for effectively managing the SPC over time. © 2012 New York University.

Faces of pricing and profit planning in innovation at the doorstep of the EU:government pricing policy in the pharmaceutical sector in Turkey

The majority of research on the pharmaceutical sector has focused on an overall micro economic, medical oriented welfare issues, whereas the marketing management role of the innovative drug manufacturer has to a large extent been disregarded. Using the case of Turkey, through a series of in-depth interviews with highly innovative companies, other marketing management possibilities are explored based on broader definitions of value and transparency. Our results suggest that pharmaceutical companies as well as the government might have a too narrow focus of value and underestimate the potential long term benefits of a broader approach to marketing management and long term relationships between the various stakeholders.

Measuring productive efficiency using Nerlovian profit efficiency indicator and metafrontier analysis

The aim of this paper is to illustrate the measurement of productive efficiency using Nerlovian indicator and metafrontier with data envelopment analysis techniques. Further, we illustrate how profit efficiency of firms operating in different regions can be aggregated into one overarching frontier. Sugarcane production in three regions in Kenya has been used to illustrate these concepts. Results show that the sources of inefficiency in all regions are both technical and allocative, but allocative efficiency contributes more to the overall Nerlovian (in)efficiency indicator. © 2011 Springer-Verlag.

An overall profit Malmquist productivity index with fuzzy and interval data

Although crisp data are fundamentally indispensable for determining the profit Malmquist productivity index (MPI), the observed values in real-world problems are often imprecise or vague. These imprecise or vague data can be suitably characterized with fuzzy and interval methods. In this paper, we reformulate the conventional profit MPI problem as an imprecise data envelopment analysis (DEA) problem, and propose two novel methods for measuring the overall profit MPI when the inputs, outputs, and price vectors are fuzzy or vary in intervals. We develop a fuzzy version of the conventional MPI model by using a ranking method, and solve the model with a commercial off-the-shelf DEA software package. In addition, we define an interval for the overall profit MPI of each decision-making unit (DMU) and divide the DMUs into six groups according to the intervals obtained for their overall profit efficiency and MPIs. We also present two numerical examples to demonstrate the applicability of the two proposed models and exhibit the efficacy of the procedures and algorithms. © 2011 Elsevier Ltd.

Nonprofit leaders and for-profit entrepreneurs:similar people with different motivation

Today's market conditions require nonprofit leaders to act in an increasingly business-like fashion. This study asks whether NPO leaders have a similar disposition to act entrepreneurially as for-profit entrepreneurs, but hold different underlying motives. For this purpose, the study contrasts a sample of 72 leaders of nonprofit organizations with 117 entrepreneurs on their personality traits and explicit motives using standard personality tests and interviews. Both groups exhibit similar general and entrepreneurship-specific personality traits but differ significantly regarding their motivation. While nonprofit leaders' motivation stems primarily from the meaningfulness of their work; entrepreneurs are mainly motivated by the independence as well as by the income and profit provided by their work. This paper helps us understand who leaders of nonprofit organizations are.

Optimising market share and profit margin:SMDP-based tariff pricing under the smart grid paradigm

Smart grid technologies have given rise to a liberalised and decentralised electricity market, enabling energy providers and retailers to have a better understanding of the demand side and its response to pricing signals. This paper puts forward a reinforcement-learning-powered tool aiding an electricity retailer to define the tariff prices it offers, in a bid to optimise its retail strategy. In a competitive market, an energy retailer aims to simultaneously increase the number of contracted customers and its profit margin. We have abstracted the problem of deciding on a tariff price as faced by a retailer, as a semi-Markov decision problem (SMDP). A hierarchical reinforcement learning approach, MaxQ value function decomposition, is applied to solve the SMDP through interactions with the market. To evaluate our trading strategy, we developed a retailer agent (termed AstonTAC) that uses the proposed SMDP framework to act in an open multi-agent simulation environment, the Power Trading Agent Competition (Power TAC). An evaluation and analysis of the 2013 Power TAC finals show that AstonTAC successfully selects sell prices that attract as many customers as necessary to maximise the profit margin. Moreover, during the competition, AstonTAC was the only retailer agent performing well across all retail market settings.

Profit, productivity and price performance changes in the water and sewerage industry:an empirical application for England and Wales

This paper aims to analyse the impact of regulation in the financial performance of the Water and Sewerage companies (WaSCs) in England and Wales over the period 1991–2008. In doing so, a panel index approach is applied across WaSCs over time to decompose unit-specific index number-based profitability growth as a function of the profitability, productivity and price performance growth achieved by benchmark firms, and the catch up to the benchmark firm achieved by less productive firms. The results indicated that after 2000 there is a steady decline in average price performance, while productivity improves resulting in a relatively stable economic profitability. It is suggested that the English and Welsh water regulator is now more focused on passing productivity benefits to consumers, and maintaining stable profitability than it was in earlier regulatory periods. This technique is of great interest for regulators to evaluate the effectiveness of regulation and companies to identify the determinants of profit change and improve future performance, even if sample sizes are limited.

Branch and price solution approach for order acceptance and capacity planning in make -to -order operations

The increasing emphasis on mass customization, shortened product lifecycles, synchronized supply chains, when coupled with advances in information system, is driving most firms towards make-to-order (MTO) operations. Increasing global competition, lower profit margins, and higher customer expectations force the MTO firms to plan its capacity by managing the effective demand. The goal of this research was to maximize the operational profits of a make-to-order operation by selectively accepting incoming customer orders and simultaneously allocating capacity for them at the sales stage. ^ For integrating the two decisions, a Mixed-Integer Linear Program (MILP) was formulated which can aid an operations manager in an MTO environment to select a set of potential customer orders such that all the selected orders are fulfilled by their deadline. The proposed model combines order acceptance/rejection decision with detailed scheduling. Experiments with the formulation indicate that for larger problem sizes, the computational time required to determine an optimal solution is prohibitive. This formulation inherits a block diagonal structure, and can be decomposed into one or more sub-problems (i.e. one sub-problem for each customer order) and a master problem by applying Dantzig-Wolfe’s decomposition principles. To efficiently solve the original MILP, an exact Branch-and-Price algorithm was successfully developed. Various approximation algorithms were developed to further improve the runtime. Experiments conducted unequivocally show the efficiency of these algorithms compared to a commercial optimization solver.^ The existing literature addresses the static order acceptance problem for a single machine environment having regular capacity with an objective to maximize profits and a penalty for tardiness. This dissertation has solved the order acceptance and capacity planning problem for a job shop environment with multiple resources. Both regular and overtime resources is considered. ^ The Branch-and-Price algorithms developed in this dissertation are faster and can be incorporated in a decision support system which can be used on a daily basis to help make intelligent decisions in a MTO operation.^

Branch and Price Solution Approach for Order Acceptance and Capacity Planning in Make-to-Order Operations

The increasing emphasis on mass customization, shortened product lifecycles, synchronized supply chains, when coupled with advances in information system, is driving most firms towards make-to-order (MTO) operations. Increasing global competition, lower profit margins, and higher customer expectations force the MTO firms to plan its capacity by managing the effective demand. The goal of this research was to maximize the operational profits of a make-to-order operation by selectively accepting incoming customer orders and simultaneously allocating capacity for them at the sales stage. For integrating the two decisions, a Mixed-Integer Linear Program (MILP) was formulated which can aid an operations manager in an MTO environment to select a set of potential customer orders such that all the selected orders are fulfilled by their deadline. The proposed model combines order acceptance/rejection decision with detailed scheduling. Experiments with the formulation indicate that for larger problem sizes, the computational time required to determine an optimal solution is prohibitive. This formulation inherits a block diagonal structure, and can be decomposed into one or more sub-problems (i.e. one sub-problem for each customer order) and a master problem by applying Dantzig-Wolfe’s decomposition principles. To efficiently solve the original MILP, an exact Branch-and-Price algorithm was successfully developed. Various approximation algorithms were developed to further improve the runtime. Experiments conducted unequivocally show the efficiency of these algorithms compared to a commercial optimization solver. The existing literature addresses the static order acceptance problem for a single machine environment having regular capacity with an objective to maximize profits and a penalty for tardiness. This dissertation has solved the order acceptance and capacity planning problem for a job shop environment with multiple resources. Both regular and overtime resources is considered. The Branch-and-Price algorithms developed in this dissertation are faster and can be incorporated in a decision support system which can be used on a daily basis to help make intelligent decisions in a MTO operation.

Best Practices: Lessons Learned by a South Florida Non-Profit Community Based Organization while Designing and Implementing a Career Exploration Evidence Informed Framework in Urban Communities

All A’s was designed to support of the agency’s family strengthening initiatives in South Florida. All A’s uses evidence informed strategies poised to be an inclusive curriculum that teaches self-determination and adaptive behavior skills. The framework incorporates problem based learning and adult learning theory and follows the Universal Design for Learning. Since 2012, the agency has served over 8500 youth and 4,000 adults using the framework. The framework addresses educational underachievement and career readiness in at risk populations. It is used to enhance participants AWARENESS of setting SMART goals to achieve future goals and career aspirations. Participants are provided with ACCESS to resources and opportunities for creating and implementing an ACTION plan as they pursue and ACHIEVE their goals. All A’s promotes protective factors and expose youth to career pathways in Science, Technology, Engineering and Math (STEM) related fields. Youth participate in college tours, job site visits, job shadowing, high school visits, online college and career preparation assistance, service learning projects, STEM projects, and the Winning Futures© mentoring program. Adults are assisted with résumé development; learn job search strategies, interview techniques, job shadowing experiences, computer and financial literacy programs. Adults and youth are also given the opportunity to complete industry-recognized certifications in high demand industries (food service, general labor, and construction), and test preparation for the General Educational Development Test.

Hotel Profit Implications from Rising Wages and Inflation in the U.S.

Macroeconomic models based on the Phillips Curve predict that as the unemployment rate declines toward the long-run, natural rate, the pace of wage and price growth accelerates and inflation rises.1 In this paper I analyze the profitability prospects for the U.S. hotel industry in today’s relatively volatile economic environment, keeping in mind the Phillips Curve’s general principle that inflation and employment have an inverse, but relatively stable short-term relationship. Although employment and economic growth in the U.S. have been uneven in recent months, the unemployment rate has declined to less than 5 percent, which many economists believe is close to the natural rate. Growth in wages and salaries, as measured by the Employment Cost Index, has concurrently been moving upward between 2.5 and 3.0 percent during the past 12 months. At the same time, general inflation remains below levels that might typically be expected this late in the cycle, although core inflation is bumping up against the Federal Reserve’s 2-percent target. If the inflation rate continues to move upward as predicted by Phillips Curve models (and encouraged by the Federal Reserve), rising labor costs and other expenses will exert downward pressure on U.S. business profits. Backward movement up the Phillips Curve (with greater inflation) coincides with an expanding economy. In that scenario, prices of goods and services also will rise in real terms if their supply cannot keep up with demand, and producers have the ability to raise prices (absent fixed-price contracts such as leases).

IT Adoption and Usage in Non-Profit Organizations: a Cross-generational Case Study

A gulf has tended to develop between the adoption and usage of information technology by different generations, at the heart of which is different ways of experiencing and relating to the world around us. This research idea is currently being developed following data collection and feedback is sought on ways forward to enable impact. The research focuses on information technology in the form of multimedia. Multimedia meaning ‘media’ and ‘content’ that uses a combination of different content forms; or electronically integrated communication engaging all or most of the senses (e.g. graphic art, sound, animation and full-motion video presented by way of computer or other electronic means) mainly through presentational technologies. Although multimedia is not new, some organization’s particularly those in the non-profit sector do not always have the technical or financial resources to support such systems and consequently may struggle to adopt and support its usage amongst different generations. However non-profit organizations are being forced to pay more attention to the way they communicate with markets and the public due to the professionalism of communication everywhere in society. The case study used for this study is a church circuit comprising of 15 churches in the Midlands region of the United Kingdom which was selected due to the diverse age groups catered for within this type of non-profit organization. Participants in the study also had a range of skills, experiences and backgrounds which adds to the diversity of the population studied. Data gathered focused on the attitudes and opinions of the adoption and use of multimedia amongst different age groups. 395 questionnaires were distributed, comprising of 11 opinion questions and 4 demographic questions. 83% of the questionnaires were returned, representing 35% of the total circuit membership. Three people from each of the following age categories were also interviewed: 1920 – 1946 (Matures); 1947-1964 (Baby Boomers); 1965-1982 (Generation X); 1983-2004 (Net Generation). Results of the questionnaire and comments from the interviews were found not to tally with the widespread assumption that the younger generation is attracted by the use of multimedia in comparison to the older generation. The highest proportion of those who said that they gain more from a service enhanced by multimedia was from the Baby Boomers. Comments from interviews suggested that: ‘we need to embrace multimedia if we are to attract and retain the younger generation’; ‘multimedia often helps children to remain focused and clarifies the objective of the service’. However, because the younger generations’ world tends to be dominated by computer technology the questionnaire showed that they are more likely to have higher standards when it comes to the use of multimedia, such as identifying higher levels of equipment failing to work and annoying use of sounds compared to older age groups. In comparison problems experienced with multimedia for the Matures age group had the highest percentage of difficulty with the size of letters; the colour of letters and background and the sound not loud enough which is to be expected. Since every organization is unique any type of multimedia adopted and used should be specific to their needs, its stakeholders and the physical building in order to enhance that uniqueness and its needs. Giving thought to whether the type of multimedia is the best method for communicating the message to the particular audience alongside how technical and financial resources are best used can assist in accommodating different age groups that need to be catered for.

Influence of climate variability and stocking strategies on greenhouse gas emissions (GHGE), production and profit of a northern Queensland beef cattle herd

Previous studies of greenhouse gas emissions (GHGE) from beef production systems in northern Australia have been based on models of ‘steady-state’ herd structures that do not take into account the considerable inter-annual variation in liveweight gain, reproduction and mortality rates that occurs due to seasonal conditions. Nor do they consider the implications of flexible stocking strategies designed to adapt these production systems to the highly variable climate. The aim of the present study was to quantify the variation in total GHGE (t CO2e) and GHGE intensity (t CO2e/t liveweight sold) for the beef industry in northern Australia when variability in these factors was considered. A combined GRASP–Enterprise modelling platform was used to simulate a breeding–finishing beef cattle property in the Burdekin River region of northern Queensland, using historical climate data from 1982–2011. GHGE was calculated using the method of Australian National Greenhouse Gas Inventory. Five different stocking-rate strategies were simulated with fixed stocking strategies at moderate and high rates, and three flexible stocking strategies where the stocking rate was adjusted annually by up to 5%, 10% or 20%, according to pasture available at the end of the growing season. Variation in total annual GHGE was lowest in the ‘fixed moderate’ (~9.5 ha/adult equivalent (AE)) stocking strategy, ranging from 3799 to 4471 t CO2e, and highest in the ‘fixed high’ strategy (~5.9 ha/AE), which ranged from 3771 to 7636 t CO2e. The ‘fixed moderate’ strategy had the least variation in GHGE intensity (15.7–19.4 t CO2e/t liveweight sold), while the ‘flexible 20’ strategy (up to 20% annual change in AE) had the largest range (10.5–40.8 t CO2e/t liveweight sold). Across the five stocking strategies, the ‘fixed moderate’ stocking-rate strategy had the highest simulated perennial grass percentage and pasture growth, highest average rate of liveweight gain (121 kg/steer), highest average branding percentage (74%) and lowest average breeding-cow mortality rate (3.9%), resulting in the lowest average GHGE intensity (16.9 t CO2e/t liveweight sold). The ‘fixed high’ stocking rate strategy (~5.9 ha/AE) performed the poorest in each of these measures, while the three flexible stocking strategies were intermediate. The ‘fixed moderate’ stocking strategy also yielded the highest average gross margin per AE carried and per hectare. These results highlight the importance of considering the influence of climate variability on stocking-rate management strategies and herd performance when estimating GHGE. The results also support a body of previous work that has recommended the adoption of moderate stocking strategies to enhance the profitability and ecological stability of beef production systems in northern Australia.

Drivers of revenues and expenses in higher-education non-profit institutions

Double Degree