Dakota, Minnesota and Eastern Railroad: 1997

Approximately twenty-five years ago, a majority of the railroads in the industry were either in or near bankruptcy. As a partial cure, a series of federal and state legislation was enacted which freed the industry from archaic laws passed in the days railroads enjoyed a virtual monopoly in U.S. transportation. One of the outcomes of this new legislation was the freedom granted major railroads to abandon or sell off excess trackage to entrepreneurs. The Dakota Minnesota & Eastern (DM&E) is a regional railroad that was spun off from the Chicago and North Western(C&NW) Railroad in 1986 and purchased by a group of entrepreneurs. The railroad’s mainline extends from the Mississippi River at Winona, Minnesota across southern Minnesota and central South Dakota to Rapid City. In 1996, the DM&E acquired more than 200 miles of track from Union Pacific Railroad, extending from Colony, Wyoming through Rapid City to Crawford, Nebraska. Grain currently accounts for more than 40 percent of the railroad’s 60,000 annual carloadings, which have increased more than 40 percent since 1987—DM&E’s first full year of operation. The DM&E began operations with 130 employees, 37 locomotives and no freight cars. The DM&E now employs 350 people, and owns or leases 70 locomotives and almost 30,000 freight cars. The case traces DM&E’s first eleven years of operations from its chaotic beginnings to its development as a profitable railroad, to its recent apparent unraveling. (Contact author for a copy of the complete report.)Strategic Mgmt, Regional Railroads

Private Moments

In October, 1996 Private Moments, an adult novelty store, opened for business in Huntsville, Texas. Huntsville had no ordinances in place to prevent the opening of this type of business. In fact, the local Small Business Development Center provided guidance and assistance to Edward Delagarza, the founder and owner of Private Moments. Many of the Huntsville citizens, unhappy with the opening of Private Moments, approached the City Council requesting that it be closed immediately and asked for legislation to prevent other Sexually Oriented Businesses (S.O.B.) from locating in Huntsville. After a hearing before the Planning and Zoning Commission to review alternative zoning restrictions, City Council passed an ordinance that outlined the process for obtaining a permit to operate as a S.O.B. and placed severe limitations on places a S.O.B. could locate. Private Moments, in existence when the ordinance was passed, was grandfathered. Sales at Private Moments have grown slowly, but business has been profitable. Since opening Private Moments, Mr. Delagarza has begun operating two other businesses: a tattoo parlor, which is adjacent to Private Moments, and a bar, located some distance away. He must now decide whether to remain in his current location and expand his operations by selling adult novelty items to other markets in other locations, redirect his effects toward internet sales or the wholesale distribution of S.O.B. products, or devote his time to his other two businesses. (Contact author for a copy of the complete report.)Small Busn Mgmt, Regulations

Grace Lutheran Church

Grace Lutheran Church, formed in 1963, has enjoyed stable growth. It is financially healthy and has a close-knit church community. In an effort to pro-actively plan, a long-term planning committee of approximately 50 members was formed. They chose the publication and workbook, Twelve Keys to an Effective Church by Kennon L. Callahan to guide them. Constrained by a book written by a Methodist and not always a good "fit" for their Lutheran denomination, they are sometimes frustrated with the planning process. They are further constrained by the admonition of the book to focus exclusively on "strengths to exploit and objectives to develop." Discouragement of any mention of weakness, problems, shortcomings or threats hindered their discussion. The work of the planning committee centered on the twelve keys to an effective church, as identified in the book. Focusing on the positive, they were able to identify many things they are doing well, and are determined to build on these strengths. By downplaying the negative, however, they find themselves questioning whether focusing on their strengths alone is enough. (Contact author for a copy of the complete report.)Strategic Mgmt, Non for profit org

Selection of the Argentine indicator region

Determined from available Argentine crop statistics, selection of the Indicator Region was based on the highest wheat, corn, and soybean producing provinces, which were: Buenos Aires, Cordoba, Entre Rios, and Santa Fe. Each province in Argentina was examined for the availability of LANDSAT data; area, yield and production statistics; crop calendars; and other ancillary data. The Argentine Indicator Region is described

The Interrelation between Audit Quality and Managerial Reporting Choices and Its Effects on Financial Reporting Quality

Two distinct lines of research have been dedicated to empirically testing how financial reporting quality (measured as the earnings response coefficient or ERC) is associated with management's choice of reporting bias and with audit quality. However, researchers have yet to consider how ERCs are affected by either the auditor's reaction to changes in the manager's reporting bias or the manager's reaction to changes in audit quality. Our study provides theoretical guidance on these interrelations and how changes in the manager's or the auditor's incentives affect both reporting bias and audit quality. Specifically, when the manager's cost (benefit) of reporting bias increases (decreases), we find that expected bias decreases, inducing the auditor to react by reducing audit quality. Because we also find that the association between expected audit quality and ERCs is always positive, changes in managerial incentives for biased reporting lead to a positive association between ERCs and expected reporting bias. When the cost of auditing decreases or the cost of auditor liability increases, we find that expected audit quality increases, inducing the manager to react by decreasing reporting bias. In this case, changes in the costs of audit quality lead to a negative association between ERCs and expected reporting bias. Finally, we demonstrate the impact of our theoretical findings by focusing on the empirical observations documented in the extant literature on managerial ownership and accounting expertise on the audit committee. In light of our framework, we provide new interpretations of these empirical observations and new predictions for future research

The Effects of Auditor Tenure on Fraud and Its Detection

We examine the strategic effects of auditor tenure on the auditor's testing strategy and the manager's inclination to commit fraud. Most empirical studies conclude that longer tenure improves audit quality. Proponents of restricting tenure argue that longer tenure impairs auditor independence and a "fresh look" from a new auditor results in higher audit quality. Validating this argument requires testing whether the observed difference in audit quality between a continuing auditor and a change in auditors is less than the theoretically expected difference in audit quality without impairment. Our findings provide the guidance necessary for developing such tests. Our results show that audit risk (the probability that fraud exists and goes undetected) is lower in both periods for the continuing auditor than with a change in auditors. More importantly, we show that across both periods, expected undetected fraud is lower for the continuing auditor than with a change in auditors

Bridal Gallery

The Bridal Gallery is in the business of pampering its clients with a full range of bridal products and services, from gowns to garters, shoes to jewels. Located in Huntsville, TX, this small business enjoys a well deserved reputation for offering high quality, competitively priced products. In addition, free one-on-one consultation services are provided to every client. One of the company’s flyers indicates that the Bridal Gallery is “Where expert advice saves you time and money.” Although the company is run by a very knowledgeable owner who is passionate about her business, the financial picture has been very mixed. The owner has not drawn a regular paycheck during the entire eight year history of the business, and the past year resulted in a record net loss. An expanded bridal product line plus diversifying into a prom dress line might generate additional revenue, but due to space constraints, a potentially cost prohibitive move into a larger building might be necessary.(Contact author for a copy of the complete report.)Small Business Mgmt

A new result on the Klein-Gordon equation in the background of a rotating black hole

This short paper should serve as basis for further analysis of a previously found new symmetry of the solutions of the wave equation in the gravitational field of a Kerr black hole. Its main new result is the proof of essential self-adjointness of the spatial part of a reduced normalized wave operator of the Kerr metric in a weighted L^2-space. As a consequence, it leads to a purely operator theoretic proof of the well-posedness of the initial value problem of the reduced Klein-Gordon equation in that field in that L^2-space and in this way generalizes a corresponding result of Kay (1985) in the case of the Schwarzschild black hole. It is believed that the employed methods are applicable to other separable wave equations

Jupiter: Its infrared spectrum from 10 to 40 microns

Spectral measurements of the thermal radiation from Jupiter in the 16-40 micrometer band were analyzed under the assumption that pressure broadened H2 transitions are responsible for the bulk of the infrared opacity over most of this spectral interval. Both the vertical pressure-temperature profile and the hydrogen mixing ratio were determined. The derived value of the molecular hydrogen mixing ratio, 0.89 + or - 0.11, is consistent with the solar value, 0.86

Priority queues

Extensive research has been carried out in the subject of Priority Queues over the past ten years, culminating in the book by Jaiswal [8], in this thesis, certain isolated problems which appear to have been omitted from the consideration of other authors are discussed. The first two chapters are concerned with the question of how priorities should be allocated to customers (or 'units') arriving at a queue so as to minimize the overall meaning waiting time [it is perhaps worth mentioning at the outset that following current usage, the terms 'queueing time' and ‘waiting time' will be used synonymously throughout; both refer to the time a unit waits before commencing service]. In previous treatments of this 'allocation of priorities problem it has always been assumed that on arrival, the service time requirement of a unit could be predicted exactly; the effect of having only imperfect information in the form of an estimated service time is considered here. Chapter l deals with the non-pre-emptive discipline; Chapter 2 with discretionary disciplines. Priority queues in which the arrival epochs of different types of units form independent renewal processes have only been solved under the assumption of random arrivals. However, if the following modified arrival scheme is considered. arrival epochs form an ordinary renewal process, and at any arrival epoch, independently of what happened at all previous epochs, with probability q1 the arrival is a priority unit and with probability q2 a non=priority unit (where ql+q2 =l) then the priority analogues of the ordinary single-server queues E(_b)/G/l and GI/M/1 can be solved (Chapters 3 and 4 respectively)" In conclusion, Chapter 5 is concerned with approximate methods: (v) section 1 is a review of previous work on deriving bounds for the mean waiting time in a GI/G/1 queue, section 2 extends this work to the GI/G/1 priority queue