90,086 research outputs found
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A decision model for natural oil buying policy under uncertainty
A manufacturer, in a fast moving consumer goods industry, buys Natural oils from a number of oil suppliers world-wide. The prices of these oils are the major raw material cost in producing the consumer goods, which are also sold world-wide. The volatility in the international prices of the Natural oils has signiÂŻcant impact on the planning and budgets decisions. Since the oils are bought and the ÂŻnished products are sold in markets throughout the world, the manufacturer is exposed to a variety of market uncertainties and the resulting risks. These uncertainties are the raw material prices, the demand and the therefore the selling prices for the finished goods- all of which influence the profitability of the manufacturing firm. The risks can be minimised by entering into futures contract of appropriate duration, that is, by following a schedule of "forward"' purchase of oil (with specific series of future delivery dates) with the oil suppliers. We formulate this problem as a two-stage Stochastic Program (SP) using the futures and the spot prices for the Natural oil. This SP model gives robust decisions that hedge against the uncertainties in the Natural oil prices and the demand for the finished products. The uncertainty in the oil prices and the demand are
modelled through a scenario generator. We have constructed a decision support system (DSS) that integrates the SP model, the scenario generator and the solution algorithm. This DSS also provides the decision maker a profile of the risk and return exposures for different policies
STOCHASTIC EFFICIENCY ANALYSIS OF ALTERNATIVE BASIC MAIZE MARKETING STRATEGIES
The use of modern marketing strategies to minimize risk exposure is not a widely adopted practice under maize producers. The producers tend to use high risk strategies which include the selling of the crop on the cash market after harvested; while the current market requires innovative strategies including the use of Futures and Options as traded on SAFEX. However, due to a lack of interest and knowledge of producers understanding of modern, complicated strategies the study illustrates by using a SERF and CDF that the use of three basic strategies namely a Put-, Twelve-segment-, Three-segment- can be more rewarding. These strategies can be adopted by farmers without an in-depth understanding of the market and market-signals. The results obtained from the study illustrates that producers who tend to be more risk neutral would prefer using the Twelve-segment- or Spot-strategy while a risk averse producer would prefer the Three-segment-, or Put-strategy. It also indicates that no strategy can be labelled as the all-time best and that the choice between strategies depends on risk adverse characteristics of the producer. The purpose of the study is to prove that the adoption of a basic strategy is better than adopting no strategy at all and to convince producers to reconsider the adoption of modern marketing strategies.Marketing strategies, futures, options, SERF, Crop Production/Industries, Marketing,
THE FARMER'S GRAIN MARKETING GUIDE
Crop Production/Industries, Marketing,
HOW VIRGINIA DAIRYMEN CAN MANAGE PRICE RISK
Livestock Production/Industries,
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Art Investment Collections: A New Model for Museum Finance?
This article examines the conflicting views about whether to consider artwork as a financial asset and suggests a modified museum finance strategy that would not raise stakeholder concerns about selling art in the permanent collection. By encouraging museums to begin a separate investment collection, artworks may ethically be sold to generate operating or other expenses. This strategy brings up issues of governance, accountability, and conflicts of interest, but if done correctly, it could leverage the art market access of museums to create a hedge for other types of endowment assets, while still upholding museum association guidance that works in a museumâs permanent collection are never to be sold in order to fund operating expenses.LBJ School of Public Affair
The Need for Market Regulations and Hedge Funds Performance
The contemporary crisis has brought into attention the hedge funds activity, with respect to high performance achieved levels, management techniques employed and high professionalism of the management. Being focused on higher returns to the market indices, hedge funds differ substantially to traditional investment funds through the promoted investment strategies. In Europe, prior to the European Parliamentâs Directive on Alternative Investment Funds Administrators (November 2010), hedge funds activity has been the subject of many controversial financial discussions. Alternative investment funds, especially hedge funds, private equity funds and venture capital funds have been held responsible to some extent for the global financial crisis. An increased transparency, through a more rigorous control on their activity, applying common regulations for all investment funds operating in the European area, provides the circumstances for increased financial stability and for a limited risk and increased investor protection workframe. This study considers the need for market regulations on hedge funds activity, while analyzing the defining characteristics of adopted investment strategies and their performance. The analysis is performed using the comparison approach in order to compare hedge funds performance to classic investment funds and market indices performance. The analyzed time period is 2000 â 2010, in terms of managed assets and rates of return achieved, benefits and disadvantages in the investment process.Hedge funds, regulations, investment strategies, compared performance
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Network-constrained models of liberalized electricity markets: the devil is in the details
Numerical models for electricity markets are frequently used to inform and support decisions. How robust are the results? Three research groups used the same, realistic data set for generators, demand and transmission network as input for their numerical models. The results coincide when predicting competitive market results. In the strategic case in which large generators can exercise market power, the predicted prices differed significantly. The results are highly sensitive to assumptions about market design, timing of the market and assumptions about constraints on the rationality of generators. Given the same assumptions the results coincide. We provide a checklist for users to understand the implications of different modelling assumptions
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