Statistical process control approach to reduce the bullwhip effect

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2007.Includes bibliographical references (leaves 66-68).The bullwhip effect is a pervasive problem in multi echelon supply chains that results in inefficient production operations and higher inventory levels. The causes of the bullwhip effect are well understood in industry and academia. Quantitative and qualitative solutions to attenuate this effect have been proposed in various research studies. In this research a quantitative solution in the form of a Statistical Process Control (SPC) based inventory management system is proposed that reduces the bullwhip effect while reducing inventory without compromising service level requirements for a variety of products. The strength of this methodology is in its effectiveness in reducing bullwhip for fast moving products in the mature phase of their lifecycles where improving production efficiency and lowering inventory investment are critical. However, fill rate issues are observed for slow moving products and therefore, the methodology is not recommended for such products. Finally, the application of this methodology to reduce the bullwhip effect is illustrated for a product family of a medical devices company. The results for the different classes of products in this family are discussed.by Harikumar Iyer [and] Saurabh Prasad.M.Eng.in Logistic

Is M&A Self-Dealing in the Context of Peer Benchmarking of CEO Pay?

We define two effects: (a) percentage difference between median CEO pay of compensation peers and their counterfactual peers (Peer pay effect, PPE), and (b) percentage difference between focal firm CEO pay and the median CEO pay of their compensation peers (CEO pay effect, CPE). We find a negative relation between M&A announcement period abnormal returns and pre-announcement PPE. The PPE (CPE) is lower (higher) in acquiring years relative to non-acquiring years. We show that the lower PPE is consistent with better governance and higher CPE is due to benchmarking against peers with higher median CEO pay and for completing acquisitions

Nonstandard Errors

In statistics, samples are drawn from a population in a data-generating process (DGP). Standard errors measure the uncertainty in estimates of population parameters. In science, evidence is generated to test hypotheses in an evidence-generating process (EGP). We claim that EGP variation across researchers adds uncertainty-nonstandard errors (NSEs). We study NSEs by letting 164 teams test the same hypotheses on the same data. NSEs turn out to be sizable, but smaller for more reproducible or higher rated research. Adding peer-review stages reduces NSEs. We further find that this type of uncertainty is underestimated by participants

Non-Standard Errors

In statistics, samples are drawn from a population in a data-generating process (DGP). Standard errors measure the uncertainty in estimates of population parameters. In science, evidence is generated to test hypotheses in an evidence-generating process (EGP). We claim that EGP variation across researchers adds uncertainty: Non-standard errors (NSEs). We study NSEs by letting 164 teams test the same hypotheses on the same data. NSEs turn out to be sizable, but smaller for better reproducible or higher rated research. Adding peer-review stages reduces NSEs. We further find that this type of uncertainty is underestimated by participants

The information content of an increase in federal funds rate from a zero lower bound environment

Purpose After a seven-year period of being stuck in the zero lower bound (ZLB) range, the target rate was raised by 25 basis points on December 16, 2015. Prior to the rate hike, the important issues that the Federal Reserve dealt with were the magnitude, timing, and the information conveyed by a first-time rate hike from the ZLB period. The purpose of this paper is to use the data from the ZLB period and simulate the impact of an increase in the proxies for the federal funds rate: effective federal funds rate and shadow rate, and measure the impact on the resulting changes in credit default swap (CDS) spreads across 11 industries. Increases in both proxies predict a significant decrease in CDS spreads which is indicative of an economic recovery. This prediction is confirmed by the announcement effect of the actual rate increase on December 16, 2015 and the three subsequent rate increases. Design/methodology/approach In the absence of target rate changes in the ZLB environment, the authors use a recursive vector autoregressive (VAR) model to simulate the rate increases in proxies for target federal rate and predict the impact on the economy by observing the reaction in CDS spreads and stock returns across 11 industries. Findings The impulse response indicates that an increase of one standard deviation in the effective rate (approximately 25 basis points) results in a statistically significant decrease in the spreads of CDS contracts in 8 of the 11 sectors studied in this research. Similar results obtain for an increase in shadow rate thus providing a robustness check. These results suggest a rate increase from the ZLB period and the resulting dynamics captured in the VAR system is indicative of an economic recovery. Originality/value Prior studies have used the event study methodology to evaluate the impact of rate changes on credit spreads. The ZLB environment does not contain data on target rate changes and renders the event study methodology as ineffective. This paper is the first to simulate the implications of a first-time rate increase from the ZLB environment in the context of a recursive VAR model. The results are very helpful to the Federal Reserve of countries experiencing a ZLB environment such as Japan and Europe. </jats:sec

Molecular Targets of Nutraceuticals Derived from Dietary Spices: Potential Role in Suppression of Inflammation and Tumorigenesis

Despite the fact cancer is primarily a preventable disease, recent statistics indicate cancer will become the number one killer worldwide in 2010. Since certain cancers are more prevalent in the people of some countries than others, suggests the role of lifestyle. For instance cancer incidence among people from the Indian subcontinent, where most spices are consumed, is much lower than that in the Western World. Spices have been consumed for centuries for a variety of purposes—as flavoring agents, colorants, and preservatives. However, there is increasing evidence for the importance of plant-based foods in regular diet to lowering the risk of most chronic diseases, so spices are now emerging as more than just flavor aids, but as agents that can not only prevent but may even treat disease. In this article, we discuss the role of 41 common dietary spices with over 182 spice-derived nutraceuticals for their effects against different stages of tumorigenesis. Besides suppressing inflammatory pathways, spice-derived nutraceuticals can suppress survival, proliferation, invasion, and angiogenesis of tumor cells. We discuss how spice-derived nutraceuticals mediate such diverse effects and what their molecular targets are. Overall our review suggests “adding spice to your life” may serve as a healthy and delicious way to ward off cancer and other chronic diseases