Applying the maximum NPV rule with discounted/growth factors to a flexible production scale model

This study examines the maximum net present value of the market entry and exit thresholds derived by the traditional net present value method and combines the real options approach for the project investment or disinvestment. The discounted and growth factors are incorporated into the proposed entry and exit models, facilitating the complicated calculations required to identify the discounted and growth rates so as to assess and determine the expected present value of uncertain cash flow streams. Consequently, this investigation successfully combines applying the maximum net present value method and the real options approach to decision-making with the simple consideration of the discounted and growth factors in the flexible production scale model.Maximum NPV Discounted and growth factors Flexible production scale Entry and exit Real options

Risk Management for the Optimal Order Quantity by Risk-Averse Suppliers of Food Raw Materials

In uncertain food safety environments, the suppliers of food raw materials (FRM) are facing crucial food safety issues. Therefore, this article aims to probe the risk-averse attitude of FRM suppliers in the face changing marketing environments, in order to establish a decision-making theory as a standard reference for optimization methods to satisfy the maximum expected profit and utility function for the optimal order quantity of FRM suppliers’ decision-making. We assume that urgent orders are permitted when products are out of stock, and surplus products will be sold at discounted prices, as based on the food safety circumstances and the differences of market acceptance (optimistic/normal/pessimistic), in order to affect the procurement costs and selling prices. The results of sensitivity analysis for the maximum expected profit show that the probability of imported FRM having no food safety problems when the external environment has no food safety problems is the most important parameter, with the importers fulfilling their responsibility for FRM source quality control. Meanwhile, a responsible attitude toward handling a crisis will reduce losses, transform the crisis into an opportunity, and win the trust of consumers, thereby, fostering corporate sustainability. Sensitivity analysis identifies the significant parameters that influence suppliers’ maximum utility function, and provides a reference by which food-related companies may formulate sustainable business policies

APPLYING REAL OPTIONS AND THE MAXIMUM NPV RULE TO MARKET ENTRY/EXIT STRATEGIES

This study applies the real options approach to examine the maximum net present value of the market entry/exit thresholds given uncertain cash flows. The discount and growth factors are determined in the proposed entry/exit models, facilitating the complex calculation of the discount and growth rates to determine the present value of cash flow streams. Accordingly, this work successfully combines the maximum net present value method and the real options approach for decision-making by simply considering the discount and growth factors.Real options, maximum NPV, discount factor, growth factor, entry/exit

Application of the modified Tobin's q to an uncertain energy-saving project with the real options concept

This paper is to develop a modified Tobin's q evaluation method which successfully combines the evaluation criteria of the traditional Tobin's q and the real options. This study provides flexible thinking for decision making criteria. That is, it clearly provides decision-makers with a reference in choosing enter or exit strategies, such as quantitative indicators references. The proposed model introduces two variables stochastic process in continuous time and explores the impact of the occurrence of unexpected events on the project value, so that, it can more authentically response to the project value. The studied issue deals with the firms that have not established energy-saving equipment yet. It attempts to figure out the optimal timing to adopt an energy-saving investment project when it is beneficial and the optimal timing to terminate it when the continuous operation of that business is unprofitable. The future discounted benefit-cost ratio, Q, follows the geometric Brownian motion with the Poisson jump process and the replacement of investment equipment. Except for the evaluation of energy-saving equipment investment project, the proposed model can be applied to other related project evaluation issues, such as energy-saving, CO2 emission reduction, or general investment projects.Energy-saving Real options Tobin's q

A Synergy Value Analysis of Sustainable Management Projects: Illustrated by the Example of the Aesthetic Medicine Industry

This study aims to construct a mathematical model to determine the dimensions of an economic, social, and environmental project with the goal of sustainable management. By identifying the optimal weights, the synergy values for sustainable management can be maximized. Taking aesthetic medicine companies as examples, this study attempts to construct the index projects of the economic, social, and environmental dimensions of sustainable management in an uncertain environment. Linear relationships (a combination of fixed synergistic values and varying synergistic values) are used to calculate the import optimal weight under optimistic, normal, and pessimistic circumstances. This study helped companies to introduce triple bottom line (TBL) indices to plan their issues under sustainable management and development, thus, enabling the parent company to achieve the optimal weight for the project costs to put in its subsidiaries. Additionally, this study prioritizes the weight of the influence on the management of the aesthetic medicine industry according to the risk probabilities, to minimize the uncertainties of risk management in corporate management and reduce the possibility of direct and indirect cost losses caused by financial distress, functional fluctuations, and negative impact on the medical equipment market, thereby maximizing the estimated total project value under sustainable management. This study constructs an aesthetic medicine-specific mathematical model concept using the triple bottom line model as the basis for sustainable corporate management and proposes an approach to obtain sustainable weight in uncertain conditions. By doing so, companies can add various managerial methods for the same industry, and new ideas are provided to the academic community to discuss the development of decision-making assessment criteria for risk assessments in sustainable management

Analysis of the Effects of Perceived Value, Price Sensitivity, Word-of-Mouth, and Customer Satisfaction on Repurchase Intentions of Safety Shoes under the Consideration of Sustainability

This study explored the effects of perceived value, price sensitivity, word-of-mouth, and customer satisfaction on the repurchase intentions of consumers who had purchased safety shoes. The survey was conducted from 15 December 2021 to 15 February 2022. A total of 621 valid questionnaires were analyzed by structural equation modeling. The empirical results show that perceived value significantly positively affected customer satisfaction, word-of-mouth, and repurchase intention. Customer satisfaction had a significant positive effect on word-of-mouth and repurchase intention. Price sensitivity and word-of-mouth had a significant positive effect on repurchase intention. Customer satisfaction and word-of-mouth partially mediated between perceived value and repurchase intention. However, there was no mediation effect between price sensitivity and repurchase intention. Thus, price sensitivity directly affected consumers’ repurchase intentions. Based on the results, this study proposed suggestions to practitioners, such as emphasizing the eco-design of safety shoes and promoting environmental sustainability to enhance consumers’ perceived value, as well as understanding the consumers’ price sensitivity to the product. The findings can provide practitioners with references regarding operational strategies to promote sustainable business operations globally amid the present environment, social, and governance wave

The venture capital entry model on game options with jump-diffusion process

This paper aims to apply game options to construct the optimal decision-making and management tool for venture capital (VC) firms. This model emphasizes the inferences with game options on the market structures formed by different competition and investment strategies of the two VC firms to reflect the investment returns. These market structures are classified into an entry-deterred game (specific monopoly), a leader's dominated strategies (duopoly), and simultaneous investment. It is considered how to select investment timing to avoid any potential competitive threats in order to provide the optimal expected threshold values for the investment decisions of VC firms.Venture capital Duopoly market Game options Jump-diffusion process

Exploring the Perspective of Bank Employees on the Impact of Green Process Innovation and Perceived Environmental Responsibilities on the Sustainable Performance of the Banking Industry

This research employs a questionnaire survey to examine the influence of the late phase of the pandemic on the sustainability performance of the banking industry in Taiwan. This research focuses on the perceptions of bank employees and explores the mediating role of fintech adoption (FTA) and green finance (GF). A total of 325 valid responses were collected, and structural equation modeling (CB-SEM) AMOS.21 software was applied to analyze the overall model, while the SPSS.21 PROCESS (2017) was applied to analyze the mediating effects. The empirical findings reveal that green process innovation (GI) significantly affects both green finance and banking sector sustainability performance (BSP), perceived environmental responsibility (PER) positively influence GF and FTA, and both FTA and GF positively impact BSP; however, GI had no direct impact on FTA, and FTA had no direct impact on GF. In terms of the mediating effects, PER has a complete mediating effect on BSP through FTA or GF, while GF partially mediates the relationship between GI, PER, and BSP