The Impact of New Product Announcements on Quick Service Restaurant Companies’ Stock Returns

This study seeks to answer two main questions: 1) Do product announcements impact quick service restaurant stock returns? 2) Do economic conditions impact the degree which product announcements impact quick service restaurant stock returns? 159 total product announcements were collected for 6 quick service companies: McDonald’s Corp., YUM! Brands Inc., The Wendy’s Co., AFC Enterprises Inc., Jack in the Box Inc., and Sonic Corp. 84 of these announcements were from 2005-2007 (Labeled “Pre-Recession”), and 75 were from 2009-2011 (Labeled “Post-Recession”). Using historical stock price data, an analysis of the overall trends of the mean-adjusted excess returns was conducted to determine whether or not product announcements impact the stock returns. Further analysis was conducted to determine whether the “Pre-Recession” results had different results from the “Post-Recession” results, demonstrating a difference between two different economic periods. The results showed that on average, the day following the product announcement had negative excess returns. In addition, there was a noticeable difference between “Pre-Recession” and “Post-Recession” post-announcement returns behavior. “Pre-Recession” results, on average, had positive excess returns in the 10 days following the product announcement, while “Post-Recession” results had negative excess returns in the 10 days following the product announcement

Profits and Competition in a Unionized Duopoly Model with Product Differentiation and Labour Decreasing Returns

In this paper, we aim at investigating if the conventional wisdom, that an increase of competition linked to a decrease in the degree of product differentiation always reduces firms’ profits, remains true in a unionized duopoly model with labour decreasing returns. In this context, mixed results emerge. In particular, we show that a decrease in the degree of product differentiation may affect wages, hence profits, differently, depending on both the mode of competition in the product market (Cournot or Bertrand competition) and the particular unionization structure (firm-specific or industry-wide union(s)). Interestingly, it is shown that the conventional wisdom can actually be reversed, even if under Bertrand competition only.unionized duopoly, labour decreasing returns, product differentiation, profits

Inventory Management with product returns: the value of information

This paper evaluates the impact of misinformation for inventory systems with product returns. Ifone could exactly know how much is going to be returned and when, one would certainly benefitfrom incorporating this perfect information a priori in the management of production, inventory,and distribution. In practice, one has to attempt to forecast the timing and the amount of productreturns, by hypothesizing about the return flow properties. To do so, historic data on demandand returns can be used. The available literature on information and inventory managementwith product returns commonly 1) assumes known return probabilities; or 2) considers specificcases where the most informed method does not necessarily lead to the best performance,investigating the impact on inventory related costs.product returns;forecasting;information management;inventory management

Stock market returns, volatility, and future output

In this article, Hui Guo shows that, if stock volatility follows an AR(1) process, stock market returns relate positively to past volatility but relate negatively to contemporaneous volatility in Merton’s (1973) Intertemporal Capital Asset Pricing Model. The model helps explain the recent finding that stock market volatility drives out returns in forecasting real gross domestic product growth because the predictive power of returns is hampered by their positive correlation with past volatility. If the positive relation between returns and past volatility is controlled for, however, the author finds that volatility provides no additional information beyond returns in forecasting output in the post-World War II sample.Stock market ; Capital assets pricing model

An Inventory Model with Dependent Product Demands and Returns

In this paper an inventory model for a single reusable product is investigated,in which the random returns depend explicitly on the demand stream. Further,the model distinguishes itself from most other research in this field by consideringleadtimes and a finite planning horizon. We show that neglecting the dependencybetween demands and returns of products may lead to bad performance with respectto total average relevant costs. Additionally, our results enable us to determine theminimal recovery probability or the minimal length of the planning horizon forwhich reuse is profitable.remanufacturing;Markov Chain;order-up-to policy;reusable products

Empirical evidence on the determinants of the stock market reaction to product and market diversification announcements

The announcement of product and market diversification projects lead to significant abnormal returns of 1.1%. However, the gains are higher for new products than for new markets, and for companies with high price-earnings ratios and low (or zero) dividend yields

Inventory control with product returns: the impact of (mis)information

Product returns are often characterized by a dual uncertainty on time and quantity. In the literature on inventory management with product returns, best forecasts have been associated with methods that use the most informationregarding product return history.In practice however, data is often scarce and unreliable. In this paper we investigate the impact of (mis)information on inventory performance. An exact analysis shows that in case ofmisestimation the most informed method does not necessarily lead to best performance. Further we provide an extensive simulation study to investigate the impact of misinformation w.r.t. inventory costs.This has relevant implications regarding the investments to make on product return information systems.Forecasting;Inventory control;Product returns;Information management

Learning How to Consume and Returns to Product Promotion

This paper presents the computational model of consumer behaviour. We consider two sources of product specic consumer skill acquisition, termed here as learning how to consume: learning by consuming and consumer socialization. Consumers utilize these two sources in order to derive higher valuations for products they are consuming. In this framework we discuss the behavior of returns to product promotion relative to the changes in product characteristics, such as quality and userfriendliness, as well as in case of varying intensity of consumer socialization. The main finding is that in case of duopoly the dependence of returns to advertising on product quality is not monotonic as it has been claimed by earlier studies. Additional important finding indicating the importance of the models with interacting agents is that returns to advertising exhibit qualitatively different behavior in case of zero intensity of consumer socialization.Consumer skills, learning by consuming, consumer socialization, product promotion, returns to advertising