Assessment of Acceptance Sampling Plans Using Posterior Distribution for a Dependent Process

In this study, performance of single acceptance sampling plans by attribute is investigated by using the distribution of fraction nonconformance (i.e., lot quality distribution (LQD)) for a dependent production process. It is the aim of this study to demonstrate that, in order to emphasize consumer risk (i.e., the risk of accepting a bad lot), it is better to evaluate a sampling plan based upon its performance as assessed by the posterior distribution of fractions nonconforming in accepted lots. Similarly, it is the desired posterior distribution that sets the basis for designing a sampling plan. The prior distribution used in this study is derived from a Markovian model of dependence

Multinational country risk: Exposure to asset holding risk and operating risk in international business

We address the phenomenon of country total risk, confounded by the risk of holding assets abroad and operating them in the foreign market. The findings point to deep differences in risk patterns as ownership of intangible assets exposes the holders to a higher risk. Indeed, the asset-specific risk is the dominant component of advance market volatility, explaining more than 80 percent of the cross-sectional variance. The model in the study accounts for the deficiencies in the related research streams and attempt to alleviate the typical problems in popular estimation methods

Gauging The Liability in Broken Trust: Relational Contracting and The Consequent Cost

If trust were purchasable, how much value you would attribute to it and be willing to incur a cost for safeguarding yourself from its breach? This question is the central theme of this article. The key issue in our discussion is that liability is part of all trust laden relationship and someone has to cover it. In our context, this obligation falls on the underdog. The conditions force the underdog to take a liability above the fair price level, just because the asymmetry of liabilities and limited information self-select the underdog. The adverse selection occurs due to individuals who opt out of insurance (because their willingness to pay is less than the average cost of the insurance). Those who opt out, distort mechanism which makes the price to be the fair price. The result allows the top dog to evade risk at someone else\u27s expense. The article argues, under certain conditions, broken trust breeds a set of strategic issues including over- or under-investment, contractual issues and agency problems