Search results for: wholesale price contract

Authors: Dalin Si, Azizan Aziz, Bertrand Lasternas

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To encourage building owners to purchase electricity at the wholesale market and reduce building peak demand, this study aims to develop models that predict day-ahead hourly electricity consumption and demand using artificial neural network (ANN) and support vector machine (SVM). All prediction models are built in Python, with tool Scikit-learn and Pybrain. The input data for both consumption and demand prediction are time stamp, outdoor dry bulb temperature, relative humidity, air handling unit (AHU), supply air temperature and solar radiation. Solar radiation, which is unavailable a day-ahead, is predicted at first, and then this estimation is used as an input to predict consumption and demand. Models to predict consumption and demand are trained in both SVM and ANN, and depend on cooling or heating, weekdays or weekends. The results show that ANN is the better option for both consumption and demand prediction. It can achieve 15.50% to 20.03% coefficient of variance of root mean square error (CVRMSE) for consumption prediction and 22.89% to 32.42% CVRMSE for demand prediction, respectively. To conclude, the presented models have potential to help building owners to purchase electricity at the wholesale market, but they are not robust when used in demand response control.

Keywords: building energy prediction, data mining, demand response, electricity market

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Authors: Jefferson Hernandez, Juan Padilla

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Estimation of price elasticity of demand is a valuable tool for the task of price settling. Given its relevance, it is an active field for microeconomic and statistical research. Price elasticity in the industry of oil and gas, in particular for fuels sold in gas stations, has shown to be a challenging topic given the market and state restrictions, and underlying correlations structures between the types of fuels sold by the same gas station. This paper explores the Lotka-Volterra model for the problem for price elasticity estimation in the context of fuels; in addition, it is introduced multivariate random effects with the purpose of dealing with errors, e.g., measurement or missing data errors. In order to model the underlying correlation structures, the Inverse-Wishart, Hierarchical Half-t and LKJ distributions are studied. Here, the Bayesian paradigm through Markov Chain Monte Carlo (MCMC) algorithms for model estimation is considered. Simulation studies covering a wide range of situations were performed in order to evaluate parameter recovery for the proposed models and algorithms. Results revealed that the proposed algorithms recovered quite well all model parameters. Also, a real data set analysis was performed in order to illustrate the proposed approach.

Keywords: price elasticity, volume, correlation structures, Bayesian models

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Authors: Kettawa Boonprakarn, Jedsarid Sangkaphan, Bejapornd Deekhuntod, Nuntharat Suriyo

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This study aimed to investigate the existence of field corn networks on the Thailand-Burma border under the patron-client contract farming system. The data of this qualitative study were collected through in-depth interviews with nine key informants. The results of the study revealed that the existence of the field corn networks was associated with the relationship where farmers had to share their crops with protectors in the areas under the influence of the KNU (Karen National Union) and the DKBA (Democratic Karen Buddhist Army) or Burmese soldiers. A Mae Liang, the person who starts a network has a connection with a Thaokae, Luk Rai Hua Chai or the head of a group of farmers, and farmers. They are under the patron-client system with trust and loyalty that enable the head of the group and the farmers in the Burma border side to remain under the same Mae Liang even though the business has been passed down to later generations.

Keywords: existence, field-corn networks, patron-client system, contract farming

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Authors: Akm Shahidullah

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This paper assessed the medicinal plants production and related entrepreneurial and management aspects with a focus to understand the present medicinal plants-based supply chain of Bangladesh. It delineated the overall supply chain and the extent of benefit that the plant-producingagrientrepreneursderive out of the existing system of the chain. The key objective was to put forward innovative supply chain strategiesthatcan leverage the benefit of the rural farmer-entrepreneur of medicinal plants. A field-based investigation was carried out in the Natore district of northwest Bangladesh, where a total of 225 farmers and households from eight villages were engaged in the production of medicinal plant species. The research had a survey with the agrientrepreneurs of two of those villages and focus group discussions at a union level to gather information about the price, buyers, seasonality, and overall supply infrastructure and trading mechanisms of the plant products. The research also gathered explanations on the overall supply chain system of the plants and plant-based processed products through key informant interviews with the local and regional selling agents, stockists, wholesalers, and secondary processors. The findings revealed that, in the existing supply chain system, the primary and wholesale secondary markets were mostly dominated by middlemen who cause market distortions and inflated prices due to a lack of coordination between the primary producers and secondary processors. The discoordination and inefficiencies in the supply chain system could be offset by the producer-processor relationship integration that could result in a multitude of benefits to both the parties in terms of price, quality, lead time, and overall control of the supply chain. Therefore, to ensure the growth of medicinal plants production, the industry users, secondary processors, and policy stakeholders should ensure that the primary producers get the fair share of the benefit; the producer-processor relationship integration in the supply chain offers to ensure that fairness with maximum producer surplus.

Keywords: medicinal-plants, agrientrepreneur, supply chain, relationship integration, Bangladesh

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Authors: Karl Baker-Green, Ian Woolsey

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Historically, a variety of methods have been used to access the student voice within higher education, including module evaluations and informal classroom feedback. However, currently, the views articulated in student-staff-committee meetings bear the most weight and can therefore have the most significant impact on departmental policy. Arguably, these forums are exclusionary as several students, including those who experience severe anxiety, might feel unable to participate in this face-to-face (large) group activities. Similarly, students who declare a disability, but are not in possession of a learning contract, are more likely to withdraw from their studies than those whose additional needs have been formally recognised. It is also worth noting that whilst the number of disabled students in Higher Education has increased in recent years, the percentage of those who have been issued a learning contract has decreased. These issues foreground the need to explore the educational experiences of students with or without a learning contract in order to identify their respective aspirations and needs and therefore help shape education policy. This is in keeping with the ‘Nothing about us without us’, agenda, which recognises that disabled individuals are best placed to understand their own requirements and the most effective strategies to meet these.

Keywords: education, student voice, student experience, student retention

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Authors: M. Stoklasa, H. Starzyczna, K. Matusinska

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This article deals with the perceived quality of regional products in the Moravian-Silesian region in the Czech Republic. Research was focused on finding out what do consumers perceive as a quality product and what characteristics make a quality product. The data were obtained by questionnaire survey and analysed by IBM SPSS. From the thousands of respondents the representative sample of 719 for MS region was created based on demographic factors of gender, age, education and income. The research analysis disclosed that consumers in MS region are still price oriented and that the preference of quality over price does not depend on regional brand knowledge.

Keywords: regional brands, quality products, characteristics of quality, quality over price

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Authors: Cristian Păuna

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After the widespread release of electronic trading, automated trading systems have become a significant part of the business intelligence system of any modern financial investment company. An important part of the trades is made completely automatically today by computers using mathematical algorithms. The trading decisions are taken almost instantly by logical models and the orders are sent by low-latency automatic systems. This paper will present a real-time price prediction methodology designed especially for algorithmic trading. Based on the price cyclicality function, the methodology revealed will generate price cyclicality bands to predict the optimal levels for the entries and exits. In order to automate the trading decisions, the cyclicality bands will generate automated trading signals. We have found that the model can be used with good results to predict the changes in market behavior. Using these predictions, the model can automatically adapt the trading signals in real-time to maximize the trading results. The paper will reveal the methodology to optimize and implement this model in automated trading systems. After tests, it is proved that this methodology can be applied with good efficiency in different timeframes. Real trading results will be also displayed and analyzed in order to qualify the methodology and to compare it with other models. As a conclusion, it was found that the price prediction model using the price cyclicality function is a reliable trading methodology for algorithmic trading in the financial market.

Keywords: algorithmic trading, automated trading systems, financial markets, high-frequency trading, price prediction

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Authors: Ameen Alshugaa, Farrukh Habib

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Shariah (the Islamic law) sanctions a plethora of profit-sharing arrangements for financial transactions. However, when it comes to the practice of Islamic banking, it is felt by the scholars and practitioners that many of these arrangements often fail to compensate different parties of a financial transaction compared to conventional banking, due to the Riba (interest / usury) element. This issue is caused by the parties inability to codify these compensations in any contract so as to avoid Riba. Here, hibah (gift) may be regarded as one of the solutions. In essence, hibah is a unilateral charity contract where a party voluntarily gives away something to another party without any counter value. This paper attempts to analyse theoretical and practical aspects of hibah from the perspective of Islamic law, enunciating its legality and detailing its allowance in Islamic banking. It also discusses several practices evaluating the role of hibah in resolving issues related to Riba. In particular, these practices demonstrate the validity of hibah as a way to distribute revenues and compensate parties in Islamic financial transactions, while achieving competitive advantage over conventional banking, and avoiding the element of Riba.

Keywords: hibah (gift), Islamic Finance, Islamic Law of Contract, profit distribution, Shariah

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Authors: Ana Lambelho

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Nowadays is very common that an activity may be performed independently or dependently. In Portugal, the Labour Law exclusively protects the dependent labour relations. The independent work is regulated by civil law, where the autonomy of the will is the main principle. For companies is more advantageous to hire people under a service agreement since, in that case, the relation is not submitted to the limits established in Labour law and collective bargaining. This practice has nothing wrong, if the performance of work is, in fact, made autonomously. The problem is the increased frequency of the celebration of service agreements to hide a legal relation of subordination. Aware of this and regarding the huge difficulty to demonstrate the existence of subordinated work (that often runs against the employee), the Portuguese legislator devoted some legislative rules in order to facilitate the evidence of legal subordination and, on the other hand, to avoid the misuse of the provision of service agreements. This study focuses precisely on the analysis of this solution, namely the so-called presumption of ‘laboralidade’ and on the lawsuit to recognize the existence of a labour contract. The presumption of the existence of a labour contract is present in the Portuguese legal system since 2003, and received, with the 2009 Labour Code, a new redaction that, according to the doctrine and the jurisprudence, finally approached it to a legal presumption, with the consequent reversal of the burden of proof and, in consequence, made easier to proof the legal subordination, because the employee will just have to plead and prove the existence of two of the elements described in the law to use this presumption. Another change in the Portuguese legal framework is related with the competencies of the Authority for Working Conditions (AWC): now, if during an inspection, the Authority finds a situation that seems to be an undeclared employment situation, it may access the company and, if it does not regularize voluntarily the situation, AWC has a duty to communicate to the public prosecutor, who will begin the lawsuit for the recognition of the existence of an employment contract. To defend the public interest, the action to recognize the existence of an employment contract will follow its terms, even against the employee will. Although the existence of these mechanisms does not solve by itself the problem of evasion of labour law and false ‘green receipts’, it is undeniable that it is an important step in combating fraud in this field.

Keywords: independent work, labour contract, Portugal, service agreement

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Authors: Katerina Kormusheva

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Pricing plays a pivotal role in the marketing discipline as it directly influences consumer perceptions, purchase decisions, and overall market positioning of a product or service. This paper seeks to expand current knowledge in the area of discriminatory and differential pricing, a main area of marketing research. The methodology includes developing a framework and a model for determining how many price points to implement in differential pricing. We focus on choosing the levels of differentiation, derive a function form of the model framework proposed, and lastly, test it empirically with data from a large-scale marketing pricing experiment of services in telecommunications.

Keywords: marketing, differential pricing, price points, optimization

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Authors: Kozik Renata, Leśniak Agnieszka, Plebankiewicz Edyta

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Contracting authorities in the public sector are obligated to apply the principles provided for in the Polish law for the evaluation and selection of contractors. To analyze the methods of contractors, applied in practice by public clients, the notices of contract award results for construction works were analyzed. The analysis shows that the procedure selected more and more often is open to competitive bidding, where the assessment of the competence of contractors is not very precise, as well as non-competitive bidding, i.e. single source procurement. The share of procurement procedures, where the only criterion is price, is increasing. The solution to the problems existing here might be the introduction of one of the forms of pre-selection of contractors. The article also briefly discusses verification systems for companies applying for public contracts used in EU countries.

Keywords: certification, contractors selection, open tendering, public investors

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Authors: Kawsar Ahmed, Hong Wang

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The study's goal was to estimate the causal mediation impact of tobacco tax before and after price hikes among low-income male smokers, with a particular emphasis on the effect estimating pathways framework for continuous and dichotomous variables. From July to December 2021, a cross-sectional investigation of observational data (n=739) was collected from Bangladeshi low-wage smokers. The Quasi-Bayesian technique, binomial probit model, and sensitivity analysis using a simulation of the computational tools R mediation package had been used to estimate the effect. After a price rise for tobacco products, the average number of cigarettes or bidis sticks taken decreased from 6.7 to 4.56. Tobacco product rising prices have a direct effect on low-income people's decisions to quit or lessen their daily smoking habits of Average Causal Mediation Effect (ACME) [effect=2.31, 95 % confidence interval (C.I.) = (4.71-0.00), p<0.01], Average Direct Effect (ADE) [effect=8.6, 95 percent (C.I.) = (6.8-0.11), p<0.001], and overall significant effects (p<0.001). Tobacco smoking choice is described by the mediated proportion of income effect, which is 26.1% less of following price rise. The curve of ACME and ADE is based on observational figures of the coefficients of determination that asses the model of hypothesis as the substantial consequence after price rises in the sensitivity analysis. To reduce smoking product behaviors, price increases through taxation have a positive causal mediation with income that affects the decision to limit tobacco use and promote low-income men's healthcare policy.

Keywords: causal mediation analysis, directed acyclic graphs, tobacco price policy, sensitivity analysis, pathway estimation

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Authors: Saleh Alzahrani, Halim Boussabaine

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Many of Public Private Partnership (PPP) are developed based on a public project is to be awarded to a private party within a one contractual framework. PPP project risks typically include the development and construction of a new asset as well as its operation. Certainly the most severe consequences of risks through the construction period are price and time overruns. These events are among the most generally used situation in value for money analysis risks. The sources of risk change during the time in PPP project. In traditional procurement, the public sector usually has to cover all prices suffering from these risks. At least there is plenty to suggest that price suffering is a norm in some of the projects that are delivered under traditional procurement. This paper will find the impact of exogenous risk factors into actual construction price into PPP projects. The paper will present a brief literature review on PPP risk pricing strategies and then using system dynamics (SD) to analyses of the risks associated with the estimated project price. Based on the finding from these analyses a risk pricing association model is presented and discussed. The paper concludes with thoughts for future research.

Keywords: public private partnership (PPP), risk, risk pricing, system dynamics (SD)

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Authors: Lian Kösters, Wendy Smits, Raymond Montizaan

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The number of solo self-employed in the Netherlands has been increasing for years. The relative increase is among the largest in the EU. To explain this increase, most studies have focused on the supply side, workers who offer themselves as solo self-employed. The number of studies that focus on the demand side, the employer who hires the solo self-employed, is still scarce. Studies into employer behaviour conducted until now show that employers mainly choose self-employed workers when they have a temporary need for specialist knowledge, but also during projects or production peaks. These studies do not provide insight into the employers’ considerations for different contract types. In this study, interviews with employers were conducted, and available literature was consulted to provide an overview of the several factors employers use to compare different contract types. That input was used to set up a vignette study. This was carried out at the end of 2021 among almost 1000 business owners, HR managers, and business leaders of Dutch companies. Each respondent was given two sets of five fictitious candidates for two possible positions in their organization. They were asked to rank these candidates. The positions varied with regard to the type of tasks (core tasks or support tasks) and the time it took to train new people for the position. The respondents were asked additional questions about the positions, such as the required level of education, the duration, and the degree of predictability of tasks. The fictitious candidates varied, among other things, in the type of contract on which they would come to work for the organization. The results were analyzed using a rank-ordered logit analysis. This vignette setup makes it possible to see which factors are most important for employers when choosing to hire a solo self-employed person compared to other contracts. The results show that there are no indications that employers would want to hire solo self-employed workers en masse. They prefer regular employee contracts. The probability of being chosen with a solo self-employed contract over someone who comes to work as a temporary employee is 32 percent. This probability is even lower than for on-call and temporary agency workers. For a permanent contract, this probability is 46 percent. The results provide indications that employers consider knowledge and skills more important than the solo self-employed contract and that this can compensate. A solo self-employed candidate with 10 years of work experience has a 63 percent probability of being found attractive by an employer compared to a temporary employee without work experience. This suggests that employers are willing to give someone a less attractive contract for the employer if the worker so wishes. The results also show that the probability that a solo self-employed person is preferred over a candidate with a temporary employee contract is somewhat higher in business economics, administrative and technical professions. No significant results were found for factors where it was expected that solo self-employed workers are preferred more often, such as for unpredictable or temporary work.

Keywords: employer behaviour, rank-ordered logit analysis, solo self-employment, temporary contract, vignette study

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Authors: Abdulla D. Alblooshi

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The stock market is a representation of human behavior and psychology, such as fear, greed, and discipline. Those are manifested in the form of price movements during the trading sessions. Therefore, predicting the stock movement and prices is a challenging effort. However, those trading sessions produce a large amount of data that can be utilized to train an AI agent for the purpose of predicting the stock movement. Predicting the stock market price action will be advantageous. In this paper, the stock movement data of three DFM listed stocks are studied using historical price movements and technical indicators value and used to train an agent using KNN and SVM methods to predict the future price movement. MATLAB Toolbox and a simple script is written to process and classify the information and output the prediction. It will also compare the different learning methods and parameters s using metrics like RMSE, MAE, and R².

Keywords: KNN, ANN, style, SVM, stocks, technical indicators, RSI, MACD, moving averages, RMSE, MAE

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Authors: Fazıl Gökgöz, Fahrettin Filiz

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Electricity prices have sophisticated features such as high volatility, nonlinearity and high frequency that make forecasting quite difficult. Electricity price has a volatile and non-random character so that, it is possible to identify the patterns based on the historical data. Intelligent decision-making requires accurate price forecasting for market traders, retailers, and generation companies. So far, many shallow-ANN (artificial neural networks) models have been published in the literature and showed adequate forecasting results. During the last years, neural networks with many hidden layers, which are referred to as DNN (deep neural networks) have been using in the machine learning community. The goal of this study is to investigate electricity price forecasting performance of the shallow-ANN and DNN models for the Turkish day-ahead electricity market. The forecasting accuracy of the models has been evaluated with publicly available data from the Turkish day-ahead electricity market. Both shallow-ANN and DNN approach would give successful result in forecasting problems. Historical load, price and weather temperature data are used as the input variables for the models. The data set includes power consumption measurements gathered between January 2016 and December 2017 with one-hour resolution. In this regard, forecasting studies have been carried out comparatively with shallow-ANN and DNN models for Turkish electricity markets in the related time period. The main contribution of this study is the investigation of different shallow-ANN and DNN models in the field of electricity price forecast. All models are compared regarding their MAE (Mean Absolute Error) and MSE (Mean Square) results. DNN models give better forecasting performance compare to shallow-ANN. Best five MAE results for DNN models are 0.346, 0.372, 0.392, 0,402 and 0.409.

Keywords: deep learning, artificial neural networks, energy price forecasting, turkey

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Authors: K. C. Iyer, Yogita Manan Bindal, Sumit Kumar Bakshi

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Disputes and litigation are becoming inherent to the construction industry in India, and despite construction being one of the major drivers of growth, there have not been many reforms in the government construction contracts. Many of the disputes arising from the government contracts, can be avoided by the proper drafting of contracts and their administration. This study aims to 1) identify the best practices in the construction contract as reviewed from the research papers and additional literature on contract management, 2) obtain perspectives from the industry experts on the implementation of these best practices with regards to likely challenges and relative benefits for implementing the best practices in construction contracts. The best practices for disputes arising due to delay events have been identified through extensive literature survey. The industry perspective is gathered by way of a questionnaire survey to understand the applicability of the identified best practices, the benefits that are likely to be obtained and the challenges that are likely to be faced in the implementation of these practices. The study concludes with the recommended best practices that can be implemented based on the perspectives obtained from the survey. The findings of the study can be used by the industry professionals while drafting construction contracts with a view to avoid disputes related to delay events.

Keywords: best practices, construction contract, delay, dispute avoidance

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Authors: Kaoutar Abbahaddou, Mohammed Salah Chiadmi

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The need to find a relevant way to predict the next-day price of a stock index is a real concern for many financial stakeholders and researchers. We have known across years the proliferation of several methods. Nevertheless, among all these methods, the most controversial one is a machine learning algorithm that claims to be reliable, namely neural networks. Thus, the purpose of this article is to study the prediction power of neural networks in the particular case of Islamic finance as it is an under-looked area. In this article, we will first briefly present a review of the literature regarding neural networks and Islamic finance. Next, we present the architecture and principles of artificial neural networks most commonly used in finance. Then, we will show its empirical application on two Islamic stock indexes. The accuracy rate would be used to measure the performance of the algorithm in predicting the right price the next day. As a result, we can conclude that artificial neural networks are a reliable method to predict the next-day price for Islamic indices as it is claimed for conventional ones.

Keywords: Islamic finance, stock price prediction, artificial neural networks, machine learning

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Authors: Tehreem Fatima, Enjun Xia

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The research investigates the relationship between total oil consumption and transport oil consumption, GDP, oil price, and oil reserve in order to forecast future oil demand in China. Annual time series data is used over the period of 1980 to 2015, and for this purpose, an oil demand function is estimated by applying structural time series model (STSM). The technique also uncovers the Underline energy demand trend (UEDT) for China oil demand and GDP, oil reserve, oil price and UEDT are considering important drivers of China oil demand. The long-run elasticity of total oil consumption with respect to GDP and price are (0.5, -0.04) respectively while GDP, oil reserve, and price remain (0.17; 0.23; -0.05) respectively. Moreover, the Estimated results of long-run elasticity of transport oil consumption with respect to GDP and price are (0.5, -0.00) respectively long-run estimates remain (0.28; 37.76;-37.8) for GDP, oil reserve, and price respectively. For both model estimated underline energy demand trend (UEDT) remains nonlinear and stochastic and with an increasing trend of (UEDT) and based on estimated equations, it is predicted that China total oil demand somewhere will be 9.9 thousand barrel per day by 2025 as compare to 9.4 thousand barrel per day in 2015, while transport oil demand predicting value is 9.0 thousand barrel per day by 2020 as compare to 8.8 thousand barrel per day in 2015.

Keywords: china, forecasting, oil, structural time series model (STSM), underline energy demand trend (UEDT)

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Authors: Merkouche Wassila, Marchand Alain, Renaud Stéphane

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Organizations are facing competitive pressures constraining them to modify their practices and change initial work conditions of employees, however, these modifications have to sustain initial quality of work and engagements toward the workforce. We focus on the importance of promises in the perspective of psychological contract. According to this perspective, employees perceiving a breach of the expected obligations from the employer may become unsatisfied at work and develop organizational withdrawal behaviors. These are negative counterproductive behaviours aiming to damage the organisation according to the principle of reciprocity and social exchange. We present an integrative model of the determinants and manifestations of organizational withdrawal (OW), a set of behaviors allowing the employee to leave his job or avoid his assigned work. OW contains two main components often studied in silos: work withdrawal (delays, absenteeism and other adverse behaviors) and job withdrawal (turnover). We use the systemic micro, meso and macro sociological approach designing the individual at the heart of a system containing individual, organizational, and environmental determinants. Under the influence of these different factors, the individual assesses the type of behavior to adopt. We provide better lighting for understanding OW using both psychological contract approach through the perception of its respect by the organization and job embeddedness approach which explains why the employee does not leave the organization and then remains in his post while practicing negative and counterproductive behaviors such as OW. We study specifically cynicism as a type of OW as it is a dimension of burnout. We focus on the antecedents of cynicism to try to prevent it in the workplace.

Keywords: burnout, cynicism, job embeddedness, organizational withdrawal, psychological contract

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Authors: Ons Triki, Fathi Abid

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The basic objective of this paper is twofold. It resides in designing a model for a contingent convertible lease contract that can ensure the financial stability of a company and recover the losses of the parties to the lease in the event of default. It also aims to compare the convertible lease contract on inefficiencies resulting from the debt-overhang problem and asset substitution with other financing policies. From this perspective, this paper highlights the interaction between investments and financing policies in a dynamic model with existing assets and a growth option where the investment cost is financed by a contingent convertible lease and equity. We explore the impact of the contingent convertible lease on the capital structure. We also check the reliability and effectiveness of the use of the convertible lease contract as a means of financing. Findings show that the rental convertible contract with a sufficiently high conversion ratio has less severe inefficiencies arising from risk-shifting and debt overhang than those entailed by risky debt and pure-equity financing. The problem of underinvestment pointed out by Mauer and Ott (2000) and the problem of overinvestment mentioned by Hackbarth and Mauer (2012) may be reduced under contingent convertible lease financing. Our findings predict that the firm value under contingent convertible lease financing increases globally with asset volatility instead of decreasing with business risk. The study reveals that convertible leasing contracts can stand for a reliable solution to ensure the lessee and quickly recover the counterparties of the lease upon default.

Keywords: contingent convertible lease, growth option, debt overhang, risk-shifting, capital structure

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Authors: Huey-Kuo Chen

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This paper applies directional marginal productivity model to study the shadow price of emissions by transportation modes in the years of 2011 and 2013 with the aim to provide a reference for policy makers to improve the emission of pollutants. One input variable (i.e., energy consumption), one desirable output variable (i.e., vehicle kilometers traveled) and three undesirable output variables (i.e., carbon dioxide, sulfur oxides and nitrogen oxides) generated by road transportation modes were used to evaluate directional marginal productivity and directional shadow price for 18 transportation modes. The results show that the directional shadow price (DSP) of SOx is much higher than CO2 and NOx. Nevertheless, the emission of CO2 is the largest among the three kinds of pollutants. To improve the air quality, the government should pay more attention to the emission of CO2 and apply the alternative solution such as promoting public transportation and subsidizing electric vehicles to reduce the use of private vehicles.

Keywords: marginal productivity, road transportation modes, shadow price, undesirable outputs

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Authors: Sutanto, Alexander Christy, N. Sutrisno

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The demand of a product is linearly dependent on the price and quality of the product. It is analog to the demand of the employee in job-seeker problem. This paper address a closed-loop supply chain (CLSC) where a university plays role as manufacturer that produce graduates as job-seeker according to the demand and promote them to a certain corporation through a trial. Unemployed occurs when the job-seeker failed the trial or dismissed. A third party accomodates the unemployed and sends them back to the university to increase their quality through training.

Keywords: CLSC, price, quality, job-seeker problem

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Authors: R. M. Rajapaksa

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Construction industry is one of the key players in driving the economy of a country to achieve its prosperity. However, a dispute is one of the crucial factors which prevent the completion of construction contracts within the budgeted cost, scheduled time, and accepted quality. Disputes are inevitable in the construction contract. Accordingly, a study has been undertaken to identify the factors affecting contractual disputes in construction projects in Sri Lanka. The study was a mixed approach with major qualitative and minor quantitative. Qualitative study was set in the form of in-depth interviews with eighteen participants, and quantitative study was conducted using a questionnaire with twenty-four respondents from previously implemented projects by the National Water Supply & Drainage Board representing the employer, engineer and the Contractor to identify the factors affecting contractual disputes and to verify most critical factors respectively. Data analysis for qualitative and quantitative studies was carried out by means of transcribing, code & categorizeand average score methods, respectively. The study reveals that there are forty factors affecting the contractual disputes in construction contracts in Sri Lanka. The finding further illustrates that conflicting decisions by inexperience personnel in the higher position of the Employer, ambiguities resulting inadequate descriptions of the preliminary/general items in price schedule, unfair valuation and late confirmation of variations, unfair determination due to lack of experience of the Engineer/Consultant, under certification of progress payments, unfair grant of EOT & application of delay damages, unreasonable claims for variation of works, errors/discrepancies/ambiguities in the contract conditions and discrepancies & errors in designs & specifications are the most critical factors affecting contractual disputes. Finally, the study proposed remedial measures to most critical factors affecting contractual disputes.

Keywords: dispute, contractual, factors, employer, engineer, contractor, construction projects

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Authors: Tzu-Ching Weng, Hsin-Yi Chi

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This study examines the effect of family succession on the cost of bank loans and non-price contractual terms. We use a unique dataset from China and find that lending banks are likely to charge high-interest rates and offer tight contractual terms, such as loan maturity and collateral requirement, for family succession firms. These findings indicate that information and default risks may arise after subsequent family successions. We also find that family succession firms can reduce the cost of bank loans by hiring top-tier auditors to enhance financial reporting credibility. This finding suggests that professional and high-quality auditors can provide extremely valuable services to family succession firms.

Keywords: family succession, cost of bank loans, loan contract terms, top-tier auditor

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Authors: Zhuo Feng, Ying Gao

Abstract:

Public-private partnership (PPP), as an innovative way to provide infrastructures by the private sector, is being widely used throughout the world. Compared with the traditional mode, PPP emerges largely for merits of relieving public budget constraint and improving infrastructure supply efficiency by involving private funds. However, PPP projects are characterized by large scale, high investment, long payback period, and long concession period. These characteristics make PPP projects full of risks. One of the most important risks faced by the private sector is demand risk because many factors affect the real demand. If the real demand is far lower than the forecasting demand, the private sector will be got into big trouble because operating revenue is the main means for the private sector to recoup the investment and obtain profit. Therefore, it is important to study how the government compensates the private sector when the demand risk occurs in order to achieve Pareto-improvement. This research focuses on price compensation mechanism, an ex-post compensation mechanism, and analyzes, by mathematical modeling, the impact of price compensation mechanism on payoff of the private sector and consumer surplus for PPP toll road projects. This research first investigates whether or not price compensation mechanisms can obtain Pareto-improvement and, if so, then explores boundary conditions for this mechanism. The research results show that price compensation mechanism can realize Pareto-improvement under certain conditions. Especially, to make the price compensation mechanism accomplish Pareto-improvement, renegotiation costs of the government and the private sector should be lower than a certain threshold which is determined by marginal operating cost and distortionary cost of the tax. In addition, the compensation percentage should match with the price cut of the private investor when demand drops. This research aims to provide theoretical support for the government when determining compensation scope under the price compensation mechanism. Moreover, some policy implications can also be drawn from the analysis for better risk-sharing and sustainability of PPP projects.

Keywords: infrastructure, price compensation mechanism, public-private partnership, renegotiation

Procedia PDF Downloads 152

Authors: Masoud Rabbani, Majede Smizadeh, Hamed Farrokhi-Asl

Abstract:

We study jointly determining prices and production in a multiple period horizon under a general non-stationary stochastic demand with continuous prices. In some periods we need to increase capacity of production to satisfy demand. This paper presents a model to aid multi-period production capacity planning by quantifying the trade-off between product quality and production cost. The product quality is estimated as the statistical variation from the target performances obtained from the output tolerances of the production machines that manufacture the components. We consider different tolerance for different machines that use to increase capacity. The production cost is estimated as the total cost of owning and operating a production facility during the planning horizon.so capacity planning has cost that impact on price. Pricing products often turns out to be difficult to measure them because customers have a reservation price to pay that impact on price and demand. We decide to determine prices and production for periods after enhance capacity and consider reservation price to determine price. First we use an algorithm base on fuzzy set of the optimal objective function values to determine capacity planning by determine maximize interval from upper bound in minimum objectives and define weight for objectives. Then we try to determine inventory and pricing policies. We can use a lemma to solve a problem in MATLAB and find exact answer.

Keywords: price policy, inventory policy, capacity planning, product quality, epsilon -constraint

Procedia PDF Downloads 537

Authors: Jiemiao Chen, Shuoxun Xu

Abstract:

The main goal of our research is to apply the Vine copula measuring dependency between price, temperature, and precipitation indices to calculate a fair crop insurance premium. This research is focused on Worth, Iowa, United States, over the period from 2000 to 2020, where the farmers are dependent on precipitation and average temperature during the growth period of corn. Our proposed insurance considers both the natural risk and the price risk in agricultural production. We first estimate the distributions of crops using parametric methods based on Goodness of Fit tests, and then Vine Copula is applied to model dependence between yield price, crop yield, and weather indices. Once the vine structure and its parameters are determined based on AIC/BIC criteria and forecasting price and yield are obtained from the ARIMA model, we calculate this crop insurance premium using the simulation data generated from the vine copula by the Monte Carlo Simulation method. It is shown that, compared with traditional crop insurance, our proposed insurance is more fair and thus less costly for the farmers and government.

Keywords: vine copula, weather index, crop insurance premium, insurance risk management, Monte Carlo simulation

Procedia PDF Downloads 169

Authors: Erindi Allaj

Abstract:

This paper studies arbitrage pricing theory in financial markets with transaction costs. We extend the existing theory to include the more realistic possibility that the price at which the investors trade is dependent on the traded volume. The investors in the market always buy at the ask and sell at the bid price. Transaction costs are composed of two terms, one is able to capture the implicit transaction costs and the other the price impact. Moreover, a new definition of a self-financing portfolio is obtained. The self-financing condition suggests that continuous trading is possible, but is restricted to predictable trading strategies which have left and right limit and finite quadratic variation. That is, predictable trading strategies of infinite variation and of finite quadratic variation are allowed in our setting. Within this framework, the existence of an equivalent probability measure is equivalent to the absence of arbitrage opportunities, so that the first fundamental theorem of asset pricing (FFTAP) holds. It is also proved that, when this probability measure is unique, any contingent claim in the market is hedgeable in an L2-sense. The price of any contingent claim is equal to the risk-neutral price. To better understand how to apply the theory proposed we provide an example with linear transaction costs.

Keywords: arbitrage pricing theory,
transaction costs, fundamental theorems of arbitrage, financial markets

Procedia PDF Downloads 318

Authors: Daniel Mokatsanyane, Johnny Jansen Van Rensburg

Abstract:

The integral role oil-crushing companies play in sunflower oil production is often overlooked to offer high-quality oil to refineries and end consumers. Sunflower oil crushing companies in South Africa are exposed to price fluctuations resulting from the local and international markets. Hedging instruments enable these companies to hedge themselves against unexpected prices spikes and to ensure sustained profitability. A crushing company is a necessary middleman, and as such, these companies have exposure to the purchasing and selling sides of sunflower. Sunflower oil crushing companies purchase sunflower seeds from farmers or agricultural companies that provide storage facilities. The purchasing price is determined by the supply and demand of sunflower seed, both national and international. When the price of sunflower seeds in South Africa is high but still below import parity, then the crush margins realised by these companies are reduced or even negative at times. There are three main products made by sunflower oil crushing companies, oil, meal, and shells. Profits are realised from selling three products, namely, sunflower oil, meal and shells. However, when selling sunflower oil to refineries, sunflower oil crushing companies needs to hedge themselves against a reduction in vegetable oil prices. Hedging oil prices is often done via futures and is subject to specific volume commitments before a hedge position can be taken in. Furthermore, South African oil-crushing companies hedge sunflower oil with international, Over-the-counter contracts as South Africa is a price taker of sunflower oil and not a price maker. As such, South Africa provides a fraction of the world’s sunflower oil supply and, therefore, has minimal influence on price changes. The advantage of hedging using futures ensures that the sunflower crushing company will know the profits they will realise, but the downside is that they can no longer benefit from a price increase. Alternative hedging instruments like options might pose a solution to the opportunity cost does not go missing and that profit margins are locked in at the best possible prices for the oil crushing company. This paper aims to investigate the possibility of employing options alongside futures to simulate different scenarios to determine if options can bridge the opportunity cost gap.

Keywords: derivatives, hedging, price risk, sunflower, sunflower oil, South Africa

Procedia PDF Downloads 129