Pub Date : 2022-11-16DOI: 10.1080/0013791X.2022.2139029
Paul M. Johnson, H. Baroud, C. Philip, M. Abkowitz
Abstract The U.S. inland waterways play a vital role in the domestic economy, but extreme weather events, especially floods, perennially threaten to disrupt their operations. Here, we develop a data-driven approach to analyzing economic risks due to flood closures along the inland waterways that combines agent-based, economic interdependence, and Bayesian modeling. We demonstrate our framework by evaluating economic impacts of various flood disruptions along the Upper Mississippi River and determining cases where a publicly operated, flood-resilient port located near the mouth of the river can reroute shipments and mitigate production losses for the region. We find that Illinois, Louisiana, Minnesota, and Missouri are the states that suffer the most production losses from flood disruptions and that agriculture and chemical manufacturing are the most impacted industries. However, during floods whose return periods exceed 30-years, the flood resilient port becomes cost-effective in mitigating losses for the region. Our methodology can be easily extended to other hazards and sections of the inland waterways.
{"title":"An integrated approach to evaluating inland waterway disruptions using economic interdependence, agent-based, and Bayesian models","authors":"Paul M. Johnson, H. Baroud, C. Philip, M. Abkowitz","doi":"10.1080/0013791X.2022.2139029","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2139029","url":null,"abstract":"Abstract The U.S. inland waterways play a vital role in the domestic economy, but extreme weather events, especially floods, perennially threaten to disrupt their operations. Here, we develop a data-driven approach to analyzing economic risks due to flood closures along the inland waterways that combines agent-based, economic interdependence, and Bayesian modeling. We demonstrate our framework by evaluating economic impacts of various flood disruptions along the Upper Mississippi River and determining cases where a publicly operated, flood-resilient port located near the mouth of the river can reroute shipments and mitigate production losses for the region. We find that Illinois, Louisiana, Minnesota, and Missouri are the states that suffer the most production losses from flood disruptions and that agriculture and chemical manufacturing are the most impacted industries. However, during floods whose return periods exceed 30-years, the flood resilient port becomes cost-effective in mitigating losses for the region. Our methodology can be easily extended to other hazards and sections of the inland waterways.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"68 1","pages":"2 - 19"},"PeriodicalIF":1.2,"publicationDate":"2022-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47490173","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-13DOI: 10.1080/0013791X.2022.2121883
M. Seifbarghy, M. Hamidi, W. Chattinnawat
Abstract The concept of Material Flow Cost Accounting (MFCA) was developed by a German textile company in late 1980s through their projects for environmental management. The major objectives of MFCA are to increase transparency of material flow and energy usage along with their environmental and financial impacts. MFCA traces a variety of measures from material productivity metrics to crucial environmental indexes. Most of the existing researches on MFCA focus on conceptual models. A major research gap is the lack of mathematical optimization models which use the MFCA logic to support managerial decisions. This is the first known study in which a comprehensive mathematical optimization model has been developed based on MFCA cost logic, i.e., positive and negative costs. The model is named MFCABOM (MFCA-Based Optimization Model) in this paper. In addition, we have incorporated the quality cost of raw materials into the MFCABOM. The MFCABOM determines the optimal quality level of raw materials in a production system with rework. A numerical example has been solved and discussed to assess the performance and validity of the MFCABOM. The results show that the MFCABOM can strongly support production managers in selecting the optimal quality level of raw materials based on MFCA cost logic.
{"title":"Optimizing the quality level of raw materials based on material flow cost accounting in a production system with rework","authors":"M. Seifbarghy, M. Hamidi, W. Chattinnawat","doi":"10.1080/0013791X.2022.2121883","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2121883","url":null,"abstract":"Abstract The concept of Material Flow Cost Accounting (MFCA) was developed by a German textile company in late 1980s through their projects for environmental management. The major objectives of MFCA are to increase transparency of material flow and energy usage along with their environmental and financial impacts. MFCA traces a variety of measures from material productivity metrics to crucial environmental indexes. Most of the existing researches on MFCA focus on conceptual models. A major research gap is the lack of mathematical optimization models which use the MFCA logic to support managerial decisions. This is the first known study in which a comprehensive mathematical optimization model has been developed based on MFCA cost logic, i.e., positive and negative costs. The model is named MFCABOM (MFCA-Based Optimization Model) in this paper. In addition, we have incorporated the quality cost of raw materials into the MFCABOM. The MFCABOM determines the optimal quality level of raw materials in a production system with rework. A numerical example has been solved and discussed to assess the performance and validity of the MFCABOM. The results show that the MFCABOM can strongly support production managers in selecting the optimal quality level of raw materials based on MFCA cost logic.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"288 - 305"},"PeriodicalIF":1.2,"publicationDate":"2022-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47319873","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-05DOI: 10.1080/0013791X.2022.2105463
Jaehun Sim, V. Prabhu
Abstract Because cash flow is a critical issue for companies, it is important to effectively operate cash flow to mitigate liquidity risks. However, compared with research on the bullwhip effect, few studies have analyzed the effects and causes of the cash-flow bullwhip in the supply chain. None has considered the influence of credit risk on the cash-flow bullwhip effect from downstream to upstream throughout the supply chain. Thus, this study develops a mathematical model to investigate the influence of credit risk on the cash-flow bullwhip. To achieve this, it analyzes the variability of each member’s account receivable, account payable, and cash level along with three financial performance measures: account receivable turnover, account payable turnover, and cash conversion cycle. The excessive inventory level created by the bullwhip effect is known to cause the cash-bullwhip effect, which leads to supply chain members experiencing liquidity problems. However, the results of this study demonstrate that a consideration of credit risk increases the amounts of account receivable, account payable, and cash from downstream members to upstream members. In addition, this study demonstrates that when considering the credit risk, the account receivable turnover index accurately illustrates the cash-bullwhip effect of each member throughout the supply chain.
{"title":"The impact of credit risk on cash-bullwhip in supply chain","authors":"Jaehun Sim, V. Prabhu","doi":"10.1080/0013791X.2022.2105463","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2105463","url":null,"abstract":"Abstract Because cash flow is a critical issue for companies, it is important to effectively operate cash flow to mitigate liquidity risks. However, compared with research on the bullwhip effect, few studies have analyzed the effects and causes of the cash-flow bullwhip in the supply chain. None has considered the influence of credit risk on the cash-flow bullwhip effect from downstream to upstream throughout the supply chain. Thus, this study develops a mathematical model to investigate the influence of credit risk on the cash-flow bullwhip. To achieve this, it analyzes the variability of each member’s account receivable, account payable, and cash level along with three financial performance measures: account receivable turnover, account payable turnover, and cash conversion cycle. The excessive inventory level created by the bullwhip effect is known to cause the cash-bullwhip effect, which leads to supply chain members experiencing liquidity problems. However, the results of this study demonstrate that a consideration of credit risk increases the amounts of account receivable, account payable, and cash from downstream members to upstream members. In addition, this study demonstrates that when considering the credit risk, the account receivable turnover index accurately illustrates the cash-bullwhip effect of each member throughout the supply chain.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"266 - 287"},"PeriodicalIF":1.2,"publicationDate":"2022-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46512461","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-03DOI: 10.1080/0013791X.2022.2078023
Bernardo León-Camacho, Andrés Mora-Valencia, Javier Perote
Abstract This paper introduces a new risk measure for portfolio choice and compares its performance with two related metrics, namely the behavioral variance and the modified variance by using a Taylor’s expansion. The methodology for our proposal naturally incorporates investor attitudes to risk related to skewness and kurtosis by assuming a Gram-Charlier return distribution. The so-obtained risk measures represent a more reliable description of portfolio risk and encompass the cases where high-order moments are not relevant characteristics (i.e. under normality). Our results show the outperformance of our proposal for different risk tolerance parameters considering the minimum variance and Sharpe ratio criteria by employing random portfolio optimization technique for 11 sets of stocks.
{"title":"Modified variance incorporating high-order moments in risk measure with Gram-Charlier returns","authors":"Bernardo León-Camacho, Andrés Mora-Valencia, Javier Perote","doi":"10.1080/0013791X.2022.2078023","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2078023","url":null,"abstract":"Abstract This paper introduces a new risk measure for portfolio choice and compares its performance with two related metrics, namely the behavioral variance and the modified variance by using a Taylor’s expansion. The methodology for our proposal naturally incorporates investor attitudes to risk related to skewness and kurtosis by assuming a Gram-Charlier return distribution. The so-obtained risk measures represent a more reliable description of portfolio risk and encompass the cases where high-order moments are not relevant characteristics (i.e. under normality). Our results show the outperformance of our proposal for different risk tolerance parameters considering the minimum variance and Sharpe ratio criteria by employing random portfolio optimization technique for 11 sets of stocks.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"218 - 233"},"PeriodicalIF":1.2,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42861957","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-03DOI: 10.1080/0013791X.2022.2107129
H. Nachtmann
This issue of The Engineering Economist covers several contemporary areas of engineering economic research, including portfolio optimization, supply chain management, and risk assessment. I would like to thank the reviewers who contributed to the peer-review process as well as area editors David Enke, Roy Kwon, and Chin Hon Tan for their contributions to this issue. The issue begins with an article entitled “Modeling Index Tracking Portfolio Based on Stochastic Dominance for Stock Selection” by Wu and Wang. The authors develop a portfolio construction model using the stochastic dominance approach on stock filtering. Their findings have implications for managers who are responsible for either bringing greater outcomes from tracking an index under the non-expected utility function or satisfying the investor’s preference for the different object. In “On a Holistic View of Supply Chain Financial Performance and Strategic Position” by Tsai, the research introduces an analytical approach relies on three popular machine learning models, forecasting, clustering, and classification, to provide a holistic view of target companies’ financial performance patterns to study their underlying supply chain strategies. Their approach is consistent and robust as it considers noise reduction, outlier detection, and feature selection functions. The technical note “Modified Variance Incorporating High-Order Moments in Risk Measure with Gram-Charlier Returns” by Le on, Mora, and Perote introduces a new risk measure for portfolio choice and compares its performance with two related metrics, behavioral variance and modified variance, by using a Taylor’s expansion. Their work considering minimum variance and Sharpe ratio criteria by employing random portfolio optimization technique for eleven sets of stocks. In the last article, Rosner, Yang, Rao, and Scott coauthor “Decisions on CapitalConstrained Supply Chains with Credit Guarantees and Bankruptcy Costs.” Their article contributes a supply chain financing model where the core supplier provides credit guarantee for the capital-constrained retailer to bank loans. The model takes the credit guarantee, bankruptcy costs, and salvage value of products into account and analyzes the decision-making behaviors of supply chain participants, including the bank. Their results show that the supplier can adjust the credit guarantee coefficient to increase its profit and lower the profit of the retailer, which may cause instability in the supply chain. The Engineering Economist journal publishes articles, case studies, surveys, and book and software reviews that represent original research, current practice, and teaching involving problems of capital investment. For questions or inquiries, please contact me at hln@uark.edu.
本期《工程经济学人》涵盖了工程经济研究的几个当代领域，包括投资组合优化、供应链管理和风险评估。我要感谢为同行评审过程做出贡献的评审员，以及区域编辑David Enke、Roy Kwon和Chin Hon Tan对本期的贡献。本期文章的开头是吴和王的一篇题为“基于随机优势的股票选择指数跟踪投资组合建模”的文章。作者利用股票过滤的随机优势方法建立了一个投资组合构建模型。他们的发现对那些负责在非预期效用函数下跟踪指数或满足投资者对不同对象的偏好的管理者具有启示意义。在蔡的《供应链财务绩效和战略地位的整体观》中，该研究引入了一种基于预测、聚类和分类三种流行的机器学习模型的分析方法，以提供目标公司财务绩效模式的整体观，从而研究其潜在的供应链战略。他们的方法是一致和稳健的，因为它考虑了降噪、异常值检测和特征选择功能。Le on、Mora和Perote的技术注释“将高阶矩纳入Gram-Charlier收益的风险度量的修正方差”介绍了一种新的投资组合选择风险度量，并通过使用泰勒展开将其性能与行为方差和修正方差这两个相关度量进行了比较。他们的工作考虑了最小方差和夏普比率标准，通过对11组股票采用随机投资组合优化技术。在上一篇文章中，Rosner、Yang、Rao和Scott合著了《具有信用担保和破产成本的资本约束供应链决策》。他们的文章提供了一个供应链融资模型，其中核心供应商为资本约束零售商提供银行贷款的信用担保。该模型考虑了产品的信用担保、破产成本和残值，并分析了包括银行在内的供应链参与者的决策行为。他们的结果表明，供应商可以调整信用保证系数来增加其利润，而降低零售商的利润，这可能会导致供应链的不稳定。《工程经济学人》杂志发表文章、案例研究、调查以及书籍和软件评论，代表涉及资本投资问题的原始研究、当前实践和教学。如有疑问或咨询，请联系我：hln@uark.edu.
{"title":"Letter from the editor","authors":"H. Nachtmann","doi":"10.1080/0013791X.2022.2107129","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2107129","url":null,"abstract":"This issue of The Engineering Economist covers several contemporary areas of engineering economic research, including portfolio optimization, supply chain management, and risk assessment. I would like to thank the reviewers who contributed to the peer-review process as well as area editors David Enke, Roy Kwon, and Chin Hon Tan for their contributions to this issue. The issue begins with an article entitled “Modeling Index Tracking Portfolio Based on Stochastic Dominance for Stock Selection” by Wu and Wang. The authors develop a portfolio construction model using the stochastic dominance approach on stock filtering. Their findings have implications for managers who are responsible for either bringing greater outcomes from tracking an index under the non-expected utility function or satisfying the investor’s preference for the different object. In “On a Holistic View of Supply Chain Financial Performance and Strategic Position” by Tsai, the research introduces an analytical approach relies on three popular machine learning models, forecasting, clustering, and classification, to provide a holistic view of target companies’ financial performance patterns to study their underlying supply chain strategies. Their approach is consistent and robust as it considers noise reduction, outlier detection, and feature selection functions. The technical note “Modified Variance Incorporating High-Order Moments in Risk Measure with Gram-Charlier Returns” by Le on, Mora, and Perote introduces a new risk measure for portfolio choice and compares its performance with two related metrics, behavioral variance and modified variance, by using a Taylor’s expansion. Their work considering minimum variance and Sharpe ratio criteria by employing random portfolio optimization technique for eleven sets of stocks. In the last article, Rosner, Yang, Rao, and Scott coauthor “Decisions on CapitalConstrained Supply Chains with Credit Guarantees and Bankruptcy Costs.” Their article contributes a supply chain financing model where the core supplier provides credit guarantee for the capital-constrained retailer to bank loans. The model takes the credit guarantee, bankruptcy costs, and salvage value of products into account and analyzes the decision-making behaviors of supply chain participants, including the bank. Their results show that the supplier can adjust the credit guarantee coefficient to increase its profit and lower the profit of the retailer, which may cause instability in the supply chain. The Engineering Economist journal publishes articles, case studies, surveys, and book and software reviews that represent original research, current practice, and teaching involving problems of capital investment. For questions or inquiries, please contact me at hln@uark.edu.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"171 - 171"},"PeriodicalIF":1.2,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45075544","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-25DOI: 10.1080/0013791X.2022.2079787
Bo Yan, Yanping Liu, Zijie Jin
Abstract A supply chain financing model that the core supplier provides credit guarantee for the capital-constrained retailer to bank loans is concerned. The model takes the credit guarantee, bankruptcy cost, and salvage value of products into account, and analyzes the decision-making behaviors of supply chain participants, including the bank. The optimal decisions of order quantity, wholesale price, loan interest rate and bankruptcy threshold are obtained, as well as the relationship between these decisions and other factors. Results show that the supplier can adjust the credit guarantee coefficient to increase its profit and lower the profit of the retailer, which will cause instability in the supply chain. Then the joint contract of revenue-sharing and fixed payment is designed. Under this contract, the profit of each supply chain member can be improved, but the revenue-sharing contract and the fixed payment contract alone cannot achieve this effect.
{"title":"Decisions on capital-constrained supply chains with credit guarantees and bankruptcy costs","authors":"Bo Yan, Yanping Liu, Zijie Jin","doi":"10.1080/0013791X.2022.2079787","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2079787","url":null,"abstract":"Abstract A supply chain financing model that the core supplier provides credit guarantee for the capital-constrained retailer to bank loans is concerned. The model takes the credit guarantee, bankruptcy cost, and salvage value of products into account, and analyzes the decision-making behaviors of supply chain participants, including the bank. The optimal decisions of order quantity, wholesale price, loan interest rate and bankruptcy threshold are obtained, as well as the relationship between these decisions and other factors. Results show that the supplier can adjust the credit guarantee coefficient to increase its profit and lower the profit of the retailer, which will cause instability in the supply chain. Then the joint contract of revenue-sharing and fixed payment is designed. Under this contract, the profit of each supply chain member can be improved, but the revenue-sharing contract and the fixed payment contract alone cannot achieve this effect.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"234 - 263"},"PeriodicalIF":1.2,"publicationDate":"2022-05-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48652127","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-23DOI: 10.1080/0013791X.2022.2077492
Chih-Yang Tsai
Abstract Measuring corporate financial performance is an essential task in many supply chain decisions, such as supply chain strategic positioning and partner selection. This study introduces an analytical approach that can quickly scan financial data of many companies and produce a summary measure for each company. The approach offers organizations a less wearing way to obtain a holistic view of all target companies’ financial performance patterns, which imply the underlying supply chain strategies. The strategy map, a two-dimensional representation of the summary, provides a comprehensible means to apprehend the relative strategic position and measure the similarity between companies. The approach relies on three popular machine learning models, forecasting, clustering, and classification. It takes multi-year, multi-variate financial time series from the three standard financial statements, learns the patterns from the data, and tunes model parameters to configure the final settings for future applications. The input data needed are relatively easy to obtain and the self-learning modules only require modest domain knowledge to apply the approach. Its noise reduction, outlier detection, and feature selection functions ensure a consistent and robust performance. The empirical test using data from all US manufacturers and traders listed on NYSE and NASDAQ demonstrates the efficacy of the approach.
{"title":"On a holistic view of supply chain financial performance and strategic position","authors":"Chih-Yang Tsai","doi":"10.1080/0013791X.2022.2077492","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2077492","url":null,"abstract":"Abstract Measuring corporate financial performance is an essential task in many supply chain decisions, such as supply chain strategic positioning and partner selection. This study introduces an analytical approach that can quickly scan financial data of many companies and produce a summary measure for each company. The approach offers organizations a less wearing way to obtain a holistic view of all target companies’ financial performance patterns, which imply the underlying supply chain strategies. The strategy map, a two-dimensional representation of the summary, provides a comprehensible means to apprehend the relative strategic position and measure the similarity between companies. The approach relies on three popular machine learning models, forecasting, clustering, and classification. It takes multi-year, multi-variate financial time series from the three standard financial statements, learns the patterns from the data, and tunes model parameters to configure the final settings for future applications. The input data needed are relatively easy to obtain and the self-learning modules only require modest domain knowledge to apply the approach. Its noise reduction, outlier detection, and feature selection functions ensure a consistent and robust performance. The empirical test using data from all US manufacturers and traders listed on NYSE and NASDAQ demonstrates the efficacy of the approach.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"195 - 217"},"PeriodicalIF":1.2,"publicationDate":"2022-05-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41821597","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-20DOI: 10.1080/0013791X.2022.2065395
T. Karabiyik, Alejandra J. Magana, B. Newell
Abstract Economic decisions are a crucial part of the engineering design process as designers aim to minimize the cost and maximize the system’s benefits. This study focuses on first-year undergraduate students’ economic decision-making process when they trade off costs and benefits during a design challenge. In addition, we characterized students’ patterns of outcomes derived from economic decisions using the cost-benefit analysis (CBA) method during the design process. Our results suggest that students took different approaches, such as being conservative, moderately conservative, moderate, and aggressive when they tradeoff their design goals. Implications of this study relate to (a) the characterization of different approaches for trading-off design goals and (b) the use of the cost-benefit analysis method as a tool to assess students’ final designs to decide which alternative design is better. In addition, students can use the CBA method to make informed decisions while designing to optimize their design solutions.
{"title":"First-year undergraduate students’ economic decision outcomes in engineering design","authors":"T. Karabiyik, Alejandra J. Magana, B. Newell","doi":"10.1080/0013791X.2022.2065395","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2065395","url":null,"abstract":"Abstract Economic decisions are a crucial part of the engineering design process as designers aim to minimize the cost and maximize the system’s benefits. This study focuses on first-year undergraduate students’ economic decision-making process when they trade off costs and benefits during a design challenge. In addition, we characterized students’ patterns of outcomes derived from economic decisions using the cost-benefit analysis (CBA) method during the design process. Our results suggest that students took different approaches, such as being conservative, moderately conservative, moderate, and aggressive when they tradeoff their design goals. Implications of this study relate to (a) the characterization of different approaches for trading-off design goals and (b) the use of the cost-benefit analysis method as a tool to assess students’ final designs to decide which alternative design is better. In addition, students can use the CBA method to make informed decisions while designing to optimize their design solutions.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"306 - 324"},"PeriodicalIF":1.2,"publicationDate":"2022-04-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43930012","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-04DOI: 10.1080/0013791X.2022.2047851
Liang-Chuan Wu, Yuju Wang, Liang-Hong Wu
Abstract We propose a three-step method using the stochastic dominance (SD) approach on stock filtering to determine the number and candidate stocks in a portfolio. We empirically prove that our model can be used to efficiently construct a partial tracking portfolio and replicate the return of the index. First, the low standard deviation feature is found in the proposed portfolio using SD for the risk avoider. Second, our model generates constituents for a portfolio and fills the gap in the index tracking strategy. Third, the portfolios chosen from the SD-based model outperform the FTSE index and traditional index trackers’ returns. Artificial intelligence algorithms of weighting constituents can be examined in future research.
{"title":"Modeling index tracking portfolio based on stochastic dominance for stock selection","authors":"Liang-Chuan Wu, Yuju Wang, Liang-Hong Wu","doi":"10.1080/0013791X.2022.2047851","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2047851","url":null,"abstract":"Abstract We propose a three-step method using the stochastic dominance (SD) approach on stock filtering to determine the number and candidate stocks in a portfolio. We empirically prove that our model can be used to efficiently construct a partial tracking portfolio and replicate the return of the index. First, the low standard deviation feature is found in the proposed portfolio using SD for the risk avoider. Second, our model generates constituents for a portfolio and fills the gap in the index tracking strategy. Third, the portfolios chosen from the SD-based model outperform the FTSE index and traditional index trackers’ returns. Artificial intelligence algorithms of weighting constituents can be examined in future research.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"172 - 194"},"PeriodicalIF":1.2,"publicationDate":"2022-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41897827","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-03DOI: 10.1080/0013791X.2022.2087848
H. Nachtmann
This issue of The Engineering Economist demonstrates the wide array of application domains that benefit from engineering economic analysis. I would like to thank the reviewers who contributed to the peer-review process as well as associate editors Jo Min, David Enke, Karen Bursic, and Kyoung-Kuk Kim for their contributions to this issue. The issue begins with an article entitled “A Methodology for Temperature Option Pricing in the Equatorial Regions” by Cabrales, Bautista, Galindo, and Madiedo. The authors develop a methodology for temperature option pricing in equatorial regions. In their approach, temperature is forecasted by combining deterministic and stochastic models. The methodology is calibrated with data gathered in Bogot a, Colombia, using Monte Carlo simulations. They find the use of third-degree Fourier series and mean reversion prove most accurate for pricing temperature options. In “The Influence of Gender-Diverse Boards on Post-Audit Practices: A UK SME Study” by Lefley, Maresova, Hamplov a, and Jane cek, the research shows differences between gender diverse boards and male-only boards in post-audit practices. This article is of relevance and general interest to engineering economists in an investment appraisal, post-audit, project management, and governance environment and can facilitate fostering diversity and equality in regulating corporate activities and assist practitioners and policymakers in understanding the importance of monitoring capital projects. The next article “Case Study: An Assessment of the Economic Service Life of Research Equipment in the Korean Public Research Institutes” by Lee, Lee, Ri, Kim, and Park assesses the economic life of R&D equipment empirically using data gathered from public R&D institutes in Korea. As the effective use of research equipment has been regarded as a prerequisite condition to maximize research and development outcomes, the problem of replacing aging or obsolete research equipment has become important. The authors developed a systematic model to apply traditional engineering economic concepts and estimate the economic service life of research equipment based on size and utilization purpose of the equipment. The study suggests a policy scheme for efficient replacement of research equipment based on our estimation results. In the last article, Babaei and Jassbi coauthor “Technical Note: Modified Simple Average Internal Rate of Return.” Their technical note presents the Modified Simple Average Internal Rate of Return criterion as a profitability index for calculating a unique rate of return for all various types of cash flow streams so that obtained results are consistent with the net present value method in accept/reject decisions. The presented method is simple to compute and is capable of resolving all known IRR defects including when the resulting rate is greater than 1. The Engineering Economist journal publishes articles, case studies, surveys, and book and software reviews that r
{"title":"Letter from the editor","authors":"H. Nachtmann","doi":"10.1080/0013791X.2022.2087848","DOIUrl":"https://doi.org/10.1080/0013791X.2022.2087848","url":null,"abstract":"This issue of The Engineering Economist demonstrates the wide array of application domains that benefit from engineering economic analysis. I would like to thank the reviewers who contributed to the peer-review process as well as associate editors Jo Min, David Enke, Karen Bursic, and Kyoung-Kuk Kim for their contributions to this issue. The issue begins with an article entitled “A Methodology for Temperature Option Pricing in the Equatorial Regions” by Cabrales, Bautista, Galindo, and Madiedo. The authors develop a methodology for temperature option pricing in equatorial regions. In their approach, temperature is forecasted by combining deterministic and stochastic models. The methodology is calibrated with data gathered in Bogot a, Colombia, using Monte Carlo simulations. They find the use of third-degree Fourier series and mean reversion prove most accurate for pricing temperature options. In “The Influence of Gender-Diverse Boards on Post-Audit Practices: A UK SME Study” by Lefley, Maresova, Hamplov a, and Jane cek, the research shows differences between gender diverse boards and male-only boards in post-audit practices. This article is of relevance and general interest to engineering economists in an investment appraisal, post-audit, project management, and governance environment and can facilitate fostering diversity and equality in regulating corporate activities and assist practitioners and policymakers in understanding the importance of monitoring capital projects. The next article “Case Study: An Assessment of the Economic Service Life of Research Equipment in the Korean Public Research Institutes” by Lee, Lee, Ri, Kim, and Park assesses the economic life of R&D equipment empirically using data gathered from public R&D institutes in Korea. As the effective use of research equipment has been regarded as a prerequisite condition to maximize research and development outcomes, the problem of replacing aging or obsolete research equipment has become important. The authors developed a systematic model to apply traditional engineering economic concepts and estimate the economic service life of research equipment based on size and utilization purpose of the equipment. The study suggests a policy scheme for efficient replacement of research equipment based on our estimation results. In the last article, Babaei and Jassbi coauthor “Technical Note: Modified Simple Average Internal Rate of Return.” Their technical note presents the Modified Simple Average Internal Rate of Return criterion as a profitability index for calculating a unique rate of return for all various types of cash flow streams so that obtained results are consistent with the net present value method in accept/reject decisions. The presented method is simple to compute and is capable of resolving all known IRR defects including when the resulting rate is greater than 1. The Engineering Economist journal publishes articles, case studies, surveys, and book and software reviews that r","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"67 1","pages":"95 - 95"},"PeriodicalIF":1.2,"publicationDate":"2022-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43640107","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：