The anatomy of an oil price shock

Oil price shocks do not cause inflation, no matter how close the connection seems to be in our practical experience. But they can cause significant price increases throughout the economy. Tracing the way a sharp increase in the price of crude oil affects prices in various industrial sectors of the U.S. economy suggests how big these increases are. Fortunately, our economy seems better prepared now to weather such shocks than in the 1970s and 1980s.Petroleum products - Prices ; Inflation (Finance)

Active management of multi-service networks.

Future multiservice networks will be extremely large and complex. Novel management solutions will be required to keep the management costs reasonable. Active networking enables management to be delegated to network users as a large set of independent small scale management systems. A novel architecture for an active network based management solution for multiservice networking is presented

A Demand Estimation Procedure for Retail Assortment Optimization with Results from Implementations

We consider the problem of choosing, from a set of N potential stock-keeping units (SKUs) in a retail category, K SKUs to be carried at each store to maximize revenue or profit. Assortments can vary by store, subject to a maximum number of different assortments. We view a SKU as a set of attribute levels and also model possible substitutions when a customer\u27s first choice is not in the assortment. We apply maximum likelihood estimation to sales history of the SKUs currently carried by the retailer to estimate the demand for attribute levels and substitution probabilities, and from this, the demand for any potential SKU, including those not currently carried by the retailer. We specify several alternative heuristics for choosing SKUs to be carried in an assortment. We apply this approach to optimize assortments for three real examples: snack cakes, tires, and automotive appearance chemicals. A portion of our recommendations for tires and appearance chemicals were implemented and produced sales increases of 5.8% and 3.6%, respectively, which are significant improvements relative to typical retailer annual comparable store revenue increases. We also forecast sales shares of 1, 11, and 25 new SKUs for the snack cake, tire, and automotive appearance chemical applications, respectively, with mean absolute percentage errors (MAPEs) of 16.2%, 19.1%, and 28.7%, which compares favorably to the 30.7% MAPE for chain sales of two new SKUs reported by Fader and Hardie (1996)

Marketing Military Service Benefits Segmentation Based on Generalized and Restricted Exchange

Willingness to engage in exchange is based on desired benefits. In typical commercial transactions, restricted exchange benefits dominate. However, public policy, social marketing situations might require consideration of both restricted and generalized exchange benefits. Applying factor analysis, cluster analysis and cross-tabulation, this paper reports research that has successfully segmented a young adult target market regarding interest in military service based on considerations of generalized and restricted exchange motivations. This research contributes to a growing body of literature on generalized exchange as a key conceptual element for social marketing. Results demonstrate the utility of the generalized exchange concept in identifying amarket segment distinguished by strong interest in military service and positive perceptions on several key generalized exchange factors

Campbell Soup\u27s Continuous Replenishment Program: Evaluation and Enhanced Inventory Decision Rules

Campbell Soup\u27s continuous replenishment (CR) program is a novel innovation designed to improve the efficiency of inventory management throughout the supply chain. With CR (1) retailers pay a constant wholesale price but continue to participate in consumer promotions, (2) retailers transmit to the supplier daily inventory information via electronic data interchange (EDI), and (3) the supplier assumes responsibility for managing retailer inventories, i.e., vendor managed inventories (VMI). We develop simple inventory management rules to operate CR, and we test these rules with a simulation using actual demand data provided by Campbell Soup. On this sample we find that retailer inventories were reduced on average by 66% while maintaining or increasing average fill rates. This improvement reduces a retailer\u27s cost of goods sold by ~1.2%, which is significant in the low profit margin grocery industry. Furthermore, these savings could have been achieved without VMI

Siderite concretions from nonmarine shales (Westphalian A) of the Pennines, England: Controls on their growth and composition

Back-scattered electron microscopy has been used to examine the microstructure of nonmarine-shale-hosted siderite concretions. The concretions are composed of 50-100 mu m, zoned crystallites, which exhibit no noticeable center-to-edge variation within any individual concretion. This indicates that siderite crystallites nucleated at virtually the same time across the entire concretion and that the concretions did not grow by radial addition of siderite layers around a central nucleus. Further siderite precipitation took place by crystal growth onto the nuclei. The total proportion of siderite in any part of the concretion bears no simple relationship to the porosity of the enclosing shale at the time of precipitation, and growth by passive precipitation in pore space is unlikely. Integration of microprobe data with bulk mineral-chemical and stable-isotope data suggests that the siderite crystallites are composed of an Fe-Mn-rich end member with a delta(13)C value of similar to +10 parts per thousand and a Mg-Ca-rich end member with a delta(13)C value of similar to 0 parts per thousand to -5 parts per thousand. The mineral-chemical and stable-isotope compositions of these concretions resulted from microbially mediated processes operating close (< 10 m) to the sediment-water interface, during methanogenesis. Methanogenesis can generate low-delta(13)C as well as high-delta(13)C carbonate cements, hence deep-burial diagenetic reactions, such as decarboxylation of organic matter, need not be invoked to generate solutes for siderite precipitation

What Explains Superior Retail Performance?

We analyze the performance of retail firms for the period 1978-97 using public financial data. Our performance measures are long-term stock returns and whether the firm filed for bankruptcy in the period of study. We assume that over a long time period of at least five years, stock returns are a reasonable measure of the overall success of a firm. We have found a very wide disparity in performance between firms. On the one hand, retailers like Wal-Mart, the Gap and Circuit City have had phenomenal success (nineteen year compounded stock returns of 31.2%, 29.5%, and 34.5%, respectively), while on the other, 17% of the public retail firms filed for bankruptcy. We investigate how the following levers managed by the CEO of a retail firm affect performance: return on assets, sales growth, inventory turns, gross margin, financial leverage, and selling, general, and administrative expenses. The nature of the analysis is contemporaneous, providing insights into managerial actions that correlate with success as measured by stock returns, but not a prediction of future stock returns. We find that (1) return on assets, sales growth, standard deviation of return on assets and financial leverage explain more than 50% of the variation in stock returns for periods of ten years or more; (2) retailers in different segmentsâ apparel, department stores, grocery and convenience stores, drugs and pharmaceuticals, jewelry, consumer electronics, home furnishings, toys, and variety storesâ achieve similar return on assets and return on equity by following very different strategies with respect to their gross margins and inventory turns; (3) even within the same segment, high gross margin correlates with low inventory turns, and with high selling, general, and administrative expenses; (4) risk of bankruptcy is related to the mismatch between how fast a firm attempts to grow versus what growth rate it realizes. We also test for a negative correlation between sales growth and return on assets, which is widely believed to be true but is not borne out by our data.Operations Management Working Papers Serie