Profit Estimation Research Articles

Is the Organic System Economically Viable? The Case of Pineapple in India’s Northeast

ABSTRACTThis study intends to fill the gaps in the organic agriculture literature emerging from infrequent use of farm budget-related data, overlooking the imputed costs and non-existence of long-run return and profitability estimates. The results suggest that the organic system is economically unviable as the growers fail to recover their total production cost. However, growers’ returns exceed their ‘perceived’ production cost, which excludes their imputed expenses. Temporal, spatial, and size-based analysis also attests to this. On the contrary, cultivation in two sample villages where the household’s size, its head’s age, percentage of land, and yield are significantly higher, remain economically viable.

Assessing Farm’s Performance by Farm Typology in Albania

Assessing Farm’s Performance by Farm Typology in Albania

Regional Climate Change and Drainage Systems: Effects on Corn Productivity and Profitability in Campinas, Brazil

Abstract. Many natural systems are being affected by regional climate change. Regional climate change may affect the profitability and productivity of corn, which may require changes in the optimum design of drainage systems in the future. Our aim is to determine the effects of regional climate change on the relationship between drain spacing, corn productivity, and profitability and to derive estimates of productivity and profitability until the year 2100 using different future scenarios of climate simulation (CNTRL, HIGH, LOW, and MIDI). Our goal is to optimize drainage system designs that account for changes in climate using different drain spacing and types of soil in Campinas, Brazil. This study also evaluates the performance of the Eta regional climate model to simulate precipitation and air temperature for the study area. Evapotranspiration calculated with the Thornthwaite method (using observed and simulated data) and precipitation data were used as input for the SISDRENA model, which evaluates the performance of one-dimensional drainage systems. As output, the SISDRENA model provides information about drainage system design and indexes of water stress, productivity, and profitability. The general conclusion is that the Eta model is a good tool for studying the effects of climate change in the region because the simulations approximated the observed data. All sets of analyzed years indicated that a spacing of 20 m between drains was best, producing the highest average productivity and profitability. Clay loam soils tended to have higher productivity and profitability than clay soils, which translates to greater profit for the producer. However, the temperature and precipitation variations predicted by the Eta model showed that corn profitability may be reduced, changing the potential productivity in Campinas, Brazil.

Establishment and Production Costs for Southern Highbush Blueberry Orchards in Florida: Enterprise Budget and Profitability Analysis

The United States is the world’s largest producer of blueberries. Florida’s blueberry production represents a small fraction of total US production, but blueberries are nevertheless an important and valuable crop in the state because Florida growers benefit from the nation’s earliest market window. In fact, the average price for blueberries received by growers in Florida during the last three years was 2.5 times the US average. This 15-page fact sheet provides a summary of the enterprise budget developed for highbush blueberry production in Florida. The budget represents a typical operation and serves as an economic benchmark for growers, providing estimates of expenses and potential estimates of revenue and profit for a blueberry crop to help current and potential blueberry growers make informed decisions about blueberry production. Written by Ariel Singerman, Marina Burani-Arouca, Jeffrey G. Williamson, and Gary K. England, and published by the UF Department of Food and Resource Economics, November 2016. FE1002/FE1002: Establishment and Production Costs for Southern Highbush Blueberry Orchards in Florida: Enterprise Budget and Profitability Analysis (ufl.edu)

Technical and Economic Investigation and Comparison of Photovoltaic – Wind Energy – Hybrid Systems with Battery and Heat-storage Path

The paper presents results from a technical and economic investigation of a decentralized, grid-connected photovoltaic (PV) –small wind turbine (SWT) – hybrid system with lead-acid battery, lithium-ion battery and heat-storage path. Long-term measurement data of PV, wind and electricity consumption profiles for a household application are analysed. The supplementary nature of PV and wind power is demonstrated. The self-sufficiency achievable without energy storage is determined for different ratios of installed PV and SWT power and for six different types of SWT with varying hub heights. A novel peak-shaving-/power2heat-concept is introduced. Excessive and peak power of the PV and SWT plant is converted to heat, relieving grid and battery significantly. Drastic peak-shaving is possible without tremendous loss of utilizable electricity. A hybrid battery system is added aiming for an optimization of PV and wind energy self-consumption. It is demonstrated that the self-sufficiency can be increased up to 90% with a positive profit. Simulation results are presented for the scan of a multi-dimensional vector of PV and SWT plant sizes, battery capacities, peak-shaving threshold values and energy management parameters. An economic analysis of the overall hybrid system including investment costs, avoided electricity costs, revenues from feed-in-tariffs and an estimation of the total profit is presented.

Analisis Risiko Finansial Dengan Metode Simulasi Monte Carlo (Studi Kasus: Pt. Phase Delta Control)

AbstractBasically, the purpose of a company is make a profit and enrich the owners of the company. This is manifested by development and achievement of good performance, both in financial and operational perspective. But in reality, not all of companies can achieve good performance. One of them is because exposure of risk. This could threaten achievement of the objectives and existence of the company. Therefore, companies need to have an idea related to possible condition and financial projection in future periods that are affected by risk. One of the possible method is Monte Carlo Simulation. Research will be conducted at PT. Phase Delta Control with historical data related to production/sales volume, cost of production and selling price. Historical data will be used as Monte Carlo Simulation with random numbers that describe probability of each risk variables describing reality. The main result is estimated profitability of PT. Phase Delta Control in given period. Profit estimation will be uncertain variable due to some uncertainty

Shipping efficiency comparison between Northern Sea Route and the conventional Asia-Europe shipping route via Suez Canal

The continuous retreat of Arctic sea ice and seemingly appealing cost competitiveness of transarctic shipping routes are expected to boost shipping activities in the region. However, in reality, the number of Arctic transits remains meagre compared with major shipping routes. This study first develops a profit estimation model for containership sailing from an original port to a destination port with multiple port calls and a cost estimation model for oil tanker sailing from an origin port to a destination port. The authors then proceed to compare the shipping efficiency between the Northern Sea Route (NSR) and the Asia-Europe shipping route via Suez Canal by using the developed models and real shipping operational data. The results demonstrate that NSR shipping is not economically favored compared to traditional one in container shipping, but may be only appealing to small or medium-size tanker operators.

0382 Estimation of genetic progress and profitability of dairy herds using varying proportions of in-vitro produced sexed embryos

0382 Estimation of genetic progress and profitability of dairy herds using varying proportions of in-vitro produced sexed embryos

In Search of Accounting Conservatism at the Macroeconomic Level

We revisit evidence that conditional conservatism aggregates up from the firm level causing corporate profit estimates in the National Income and Product Accounts (NIPA) to be more sensitive to negative relative to positive aggregate return news. Our study delivers three main messages. First, annual estimates of NIPA corporate profits are designed to provide neutral estimates of income from current production regardless of whether times are good or bad. Second, we find spurious evidence of asymmetric sensitivity to aggregate return news in placebo test variables that are void of conditional conservatism, clearly indicating that an alternative explanation is in order. Third, we find that the variance of aggregate returns decreases with the level of economic activity. Although this return variance effect is unlikely to be attributed to accounting, it has the potential to generate spurious evidence of conditional conservatism at the macro level. Overall, our study highlights the importance of construct validity tests in archival studies and contributes to research in the properties of NIPA corporate profits.

From Micro to Macro: Does Conditional Conservatism Aggregate Up in the National Income and Product Accounts?

ABSTRACTWe revisit evidence that conditional conservatism aggregates up from the firm level causing corporate profit estimates in the National Income and Product Accounts (NIPA) to be more sensitive to negative relative to positive aggregate return news. Our study delivers three main messages. First, annual estimates of NIPA corporate profits are designed to provide neutral estimates of income from current production regardless of whether times are good or bad. Second, we find spurious evidence of asymmetric sensitivity to aggregate return news in placebo test variables that are void of conditional conservatism, clearly indicating that an alternative explanation is in order. Third, we find that the variance of aggregate returns decreases with the level of economic activity. Although this return variance effect is unlikely to be attributed to accounting, it has the potential to generate spurious evidence of conditional conservatism at the macro level. Overall, our study highlights the importance of construct validity tests in archival studies and contributes to research in the properties of NIPA corporate profits.JEL Classifications: M41; G12; E43; E52.Data Availability: Data are available from the sources identified in the text.

Learning, Termination, and Payout Policy in Dynamic Incentive Contracts

We study a principal–agent setting in which both sides learn about future profitability from output, and the project can be abandoned/terminated if profitability is too low. With learning, shirking by the agent both reduces output and lowers the principal’s estimate of future profitability. The agent can exploit this belief discrepancy and earn information rents, reducing his incentives to exert effort. The optimal contract controls information rents to improve incentives by distorting the termination decision. Our results capture the transition from a young, financially constrained firm to a mature firm that pays dividends. For young firms, poor performance permanently raises the termination threshold, as doing so lowers information rents. Mature firms pay smoothed dividends and have a fixed termination threshold. Dividend smoothing occurs because earnings surprises are used to adjust financial slack in line with profitability. When profitability only reflects the agent’s private ability, a simple equity contract is optimal.

Learning, Termination, and Payout Policy in Dynamic Incentive Contracts

We study a principal-agent setting in which both sides learn about future profitability from output, and the project can be abandoned/terminated if profitability is too low. With learning, shirking by the agent both reduces output and lowers the principal’s estimate of future profitability. The agent can exploit this belief discrepancy and earn information rents, reducing his incentives to exert effort. The optimal contract controls information rents to improve incentives by distorting the termination decision. Our results capture the transition from a young, financially constrained firm to a mature firm that pays dividends. For young firms, poor performance permanently raises the termination threshold, as doing so lowers information rents. Mature firms pay smoothed dividends and have a fixed termination threshold. Dividend smoothing occurs because earnings surprises are used to adjust financial slack in line with profitability. When profitability only reflects the agent’s private ability, a simple equity contract is optimal.

IPO valuation and profitability expectations: evidence from the Italian exchange

This paper analyses the valuation process of companies listed on the Italian Exchange in the period 2000–2009 at their initial public offering (IPO). One the most common valuation techniques declared in the IPO prospectus to determine the offer price is the discounted cash flow (DCF) method. We develop a ‘reverse engineering’ model to discover the short term profitability implied in the offer prices. We show that there is a significant optimistic bias in the estimation of future profitability compared to ex-post actual realization and the mean forecast error is substantially large. Yet we show that such error characterizes also the estimations carried out by analysts evaluating non-IPO companies. The forecast error is larger the faster has been the recent growth of the company, the higher is the leverage of the IPO firm, the more companies issued equity on the market. IPO companies generally exhibit better operating performance before the listing, with respect to comparable listed companies, while after the flotation they do not perform significantly different in term of return on invested capital. Pre-IPO book building activity plays a significant role in partially reducing the forecast error and revising expectations, while the market price of the first day of trading does not contain information for further reducing forecast errors.

A Two-Sided Entry Model with Manufacturer-Retailer Contracts

We investigate the economic determinants of contract structure and entry in an empirical setting with transfer contracts, which specify that manufacturers directly sell their products in retail stores while retailers collect the sales revenue and return a transfer to the manufacturers. Using a unique dataset describing the entry decisions of clothing manufacturers into a retail department store, we estimate a two-sided, asymmetric-information entry model. We then use this model to compare profit estimates under transfer contracts to counterfactual profit estimates obtained under common alternative contract formats. Results show that, when adverse selection is severe, transfer contracts dominate other contract formats from the retailer’s perspective; otherwise the common alternative contract formats dominate.

Developing a model of enterprise strategic potential estimation by means of mathematical programming

The aim of this study is developing a mathematical model of enterprise strategic potential estimation by means of mathematical programming. Estimation of enterprise strategic potential is considered estimation of maximum profit that can get the enterprise in the long planning period based on strategic adaptation, i. e. choosing investment strategies and program development. Proposed model allows estimate enterprise strategic potential and defining behavior principles of the enterprise (business strategy and investment program) that will realize this potential to the full. Set of alternative investment program of the enterprise is received in the input of the proposed model. Each of which corresponds to a sequence of investment projects. Optimal production program is calculated using the model for each alternative investment program. It ensures maximum profit in the long planning period. Optimal output vector is determined for this purpose in each time interval within the plan period by solving the problem of conditional optimization, which imposed restrictions on output current characteristics of enterprise resources. The dynamics of these characteristics of given enterprise resource is determined by investment projects. Set of investment projects that will be implemented in random time interval depends on the optimal output vector at this time interval.

Modeling and experimental results of an Archimedes screw turbine

A small hydro plant using an Archimedes screw is the focused of this work. This is an alternative solution to smallscale hydropower as it exploits unused resources such as small rivers or streams. Archimedes screw plants reverse the pump use principle and exploit the available stream power for energy production in very low head application. Based on the previous studies, the optimal sizing of Archimedes screws is discussed. Then, a numerical model is established to determine the mechanical efficiency according to its geometrical parameters, its rotational speed and its degree of filling. Simulation results are showed and validated with data from a real installation: this work reports experimental results of a 0.84-m diameter Archimedes screw delivering a torque of 250-N-m. This model is an essential part of the whole electromechanical plant modeling and therefore is useful for the estimation of efficiency, energy production and profitability.

Super Generics—First Step of Indian Pharmaceutical Industry in the Innovative Space in US Market

The $90 billion Indian pharma industry has been unable to develop a new drug for the US market despite spending millions in research, even though Indian generics constitutes 40 per cent of US generic drug imports. Ranbaxy and Zydus have been able to launch indigenously developed new drugs in domestic market, but none of the Indian pharmaceutical companies have launched a new drug approved by USFDA. Until a few years ago (2005–2012), Para IV filing opportunities in the US had engaged the Indian firms quiet significantly. Today, that option is no longer is attractive due to limited Para IV opportunities being targeted by numerous firms. Of late, super generics have emerged as the industry’s hope for the future. They have caught the attention of branded players as some categories enjoy a measure of patent protection (3–5 years) in US under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act (FFDCA). This article is aimed at studying the concept of incremental research in pharmaceutical industry, development cycle and regulatory pathway for super generics, profitability estimates and possibilities in future for Indian firms.

Long Term Examination of the Profitability Estimation Focused on Benefits

Strategic investment decisions are characterized by high innovation potential and long-term effects on the competitiveness of enterprises. Due to the uncertainty and risks involved in this complex decision making process, the need arises for well-structured support activities. A method that considers cost and the long-term added value is the cost-benefit effectiveness estimation. One of those methods is the “profitability estimation focused on benefits – PEFB”-method developed at the Institute of Management Cybernetics at RWTH Aachen University. The method copes with the challenges associated with strategic investment decisions by integrating long-term non-monetary aspects whilst also mapping the chronological sequence of an investment within the organization’s target system. Thus, this method is characterized as a holistic approach for the evaluation of costs and benefits of an investment. This participation-oriented method was applied to business environments in many workshops. The results of the workshops are a library of more than 96 cost aspects, as well as 122 benefit aspects. These aspects are preprocessed and comparatively analyzed with regards to their alignment to a series of risk levels. For the first time, an accumulation and a distribution of cost and benefit aspects regarding their impact and probability of occurrence are given. The results give evidence that the PEFB-method combines precise measures of financial accounting with the incorporation of benefits. Finally, the results constitute the basics for using information technology and data science for decision support when applying within the PEFB-method.

Damages in International Arbitration under Complex Long-term Contracts, by Herfried Wöss, Adriana San Román Rivera, Pablo T. Spiller, Santiago Dellepiane, edited by Loukas Mistelis

Damages in International Arbitration under Complex Long-term Contracts , by Herfried Woss, Adriana San Roman Rivera, Pablo T. Spiller, Santiago Dellepiane, edited by Loukas Mistelis, Oxford International Arbitration Series, 2014. Lamenting the fact that too little attention is paid to damages, Lucy Reed once proposed that parties in arbitration disputes begin with dessert—by hearing damages right after opening arguments—rather than leave them for the end.1 Notwithstanding that refreshing proposal, it remains true that damages are too often given short shrift, resulting in grumbling from all corners of the international arbitration community. Scholars, experts, and practitioners are dissatisfied with the way in which tribunals approach damages or fail to explain how they have reached their conclusions on damages.2 Arbitral tribunals are unhappy with certain party-appointed damages experts. One tribunal, after awarding the largest damages award in the history of international arbitration, observed that the claimants’ expert’s fees were ‘plainly excessive’ and that the claimants’ expert had been of ‘limited assistance to the Tribunal in its determination of Claimants’ damages’.3 Another tribunal, having noted with thanks the assistance of party-appointed damages experts, belied reliance on those experts in its damages analysis.4 More recently, a tribunal turned the tables on party-appointed experts by appointing its own damages expert, whose report the parties were required to address as the final round of a 12-year long investment arbitration dispute.5 The authors of Damages in International Arbitration under Complex Long - t erm Contracts address a number of causes for this current state of discontent. Their over-arching mission is to instruct practitioners and arbitrators on how to deal with uncertainty. According to the authors:This book underlines the fundamental necessity for arbitral tribunal to learn to deal with uncertainty and not to spare any effort to make a learned, fair and well-reasoned estimate of income profits lost, rather than taking a shortcut to reliance interest or ‘splitting the baby’. (11) The authors emphasize that the solution for uncertainty is not to … [↵][1]* Ruth Teitelbaum is a deputy general editor of Arbitration International and a senior associate in the international arbitration group of Freshfields Bruckhaus Deringer US LLP. The views expressed are hers only and do not reflect those of her employer. ruth.teitelbaum{at}freshfields.com [1]: #xref-corresp-1-1

A hybrid multi-stage stochastic programming-robust optimization model for maximizing the supply chain of a forest-based biomass power plant considering uncertainties

Electricity generated from forest-based biomass is an attractive source of renewable energy. However, the cost of generating heat and/or electricity from it is relatively high due to the low energy density of wood, high moisture content and variations in its quality and availability. Models have been developed to optimize the supply chain and reduce the cost per kilowatt hour generated. This paper focuses on incorporating uncertainty in the supply chain of such a model. The model considers the tactical supply chain planning of a power plant over a one-year time horizon with monthly time steps. Uncertain parameters which impact the net profit of the power plant include ‘biomass quality,’ namely moisture content and higher heating value, and ‘monthly available biomass’ from different suppliers. Robust optimization is used to model uncertainty in the quality of biomass. Then a hybrid, multi-stage, ‘stochastic programming-robust optimization’ model is presented in order to simultaneously include uncertainty in biomass quality and biomass availability. It is demonstrated that the hybrid model takes advantage of both modelling approaches to balance the profit estimates and the tractability to various circumstances. The model provides solution considering all instances of the uncertain parameters within the defined sets and scenario tree. The results revealed a major trade-off between profit and range of biomass quality. Profit decreased by up to 23% when there was ±13% variation in moisture content and ±5% change in higher heating value. The model achieved a biomass purchase cost that was lower than the current commercial costs at the power plant. Implementing the model could prevent production curtailment and undesirable fluctuation in storage levels which occurred in the past due to variations in biomass availability and quality.