Profit Improvement Research Articles

Operating mechanism for profit improvement of a smart microgrid based on dynamic demand response

A microgrid helps to reduce the consumption of fossil fuel by utilising distributed renewable energies (DREs). However, the stochastic nature of renewable energy makes it a big challenge for the microgrid operators to maximise the consumption of DREs while ensuring the balance between supply and demand. In order to improve the consumption of DREs and the profit of a microgrid efficiently, an operating mechanism consisting of two stages is proposed to dispatch DREs, responsive loads and plug-in hybrid electric vehicles (PHEVs) in a smart microgrid. In the first stage, we formulate the optimal unit commitment and the day-ahead time of use, which the operator concerns as a decentralised model. To address the model, the particle swarm optimisation algorithm and the interior point method are used, respectively, to minimise the operating cost and the electricity import. In the second stage, a dynamic incentive signal-based demand response for PHEVs is proposed to maximise the electricity export in the intra-day. Simulation studies are conducted on a smart microgrid, and the results have demonstrated that the proposed operating mechanism improves the consumption of DREs while satisfying the demand, meanwhile improves the average daily profit of the smart microgrid.

Price setting for extra-baggage service for a combination carrier using the newsvendor setup

Wide-body aircraft are frequently used to meet upsurges in passenger demand, resulting in the underutilization of the belly-hold capacity on many routes. In the existing literature, investigating this specific underutilization problem has not received much attention from scholars in this field. Therefore, in this paper, we study this problem with two main objectives. First, to propose an Extra-baggage service as a solution to the underutilization problem. Second, to provide the associated prices for the proposed extra-baggage service. For this purpose, we adopt the newsvendor-based pricing model that explores different prices, while combining different amounts of extra-baggage and cargo in the belly-hold space. To demonstrate the potential and feasibility of the proposed service, a numerical simulation has been performed. The simulation includes comparing the expected profit from cargo allocation with the expected profit from the allocation of a combination cargo with Extra-baggage. The simulation results show a significant profit improvement for the airlines, while using the Extra-baggage scheme. This is apparent as the profit increases by 25% over the current excess baggage scheme. Moreover, the results show a double profit improvement in various seasons. This performance echoes the importance of the extra-baggage service being implemented in real practice.

Assessing the Effects of Privatization on State Enterprises in Ghana

This paper examines the effects of privatization on state enterprises in Ghana. Vodafone Ghana and Universal Merchant Bank were selected for this study. Primary data was obtained from 287 respondents through survey questionnaires together with secondary data from the published annual financial reports of the two companies. The results of the study showed that factors such as weak internal controls, bribery and corruption, mismanagement of resources, political interference for self-reasons, and increased debts influence the privatization of state enterprises. The results also showed that non-financial effects of privatization include the improved efficiency in delivering services to consumers. Financially, privatization leads to significant improvement in profits, liquidity, solvency and investments stance of state enterprises. It is recommended that there must be a well-drafted strategic policy to manage the privatization of state enterprises in respective of the government in power. Capacity building through training must be offered to employees of state enterprises to revolutionise the innovative abilities and outputs. Effective internal controls must be institutionalize to bolster the operational efficiency of state enterprises. Keywords : Factors, Financial Ratio, Performance, Privatization, State Enterprise DOI : 10.7176/RJFA/10-8-14 Publication date : April 30 th 2019

A two step approach for improvement of economic profit and emission with congestion management in hybrid competitive power market

Integration of renewable energy with conventional energy sources is very challenging due to the uncertain nature of renewable energy, which creates imbalance and congestion in the system. Moreover, every market participant/player in deregulated power market wants to achieve the economic benefits within critical system constraints like congestion. Therefore, this paper presents a simple, efficient and reliable two-step optimization strategy to solve the congestion problem along with maximization of system profit, minimization of system generation cost, congestion cost and emission by optimal placement & numbers of Thyristor Controlled Series Compensator (TCSC) along with wind generators in a deregulated power market. Two new indices i.e. ‘Congestion Detection Index (CDI)’ and ‘Index of Total Congestion Cost (ITCC)’ have been proposed towards faster identification and reduction of system congestion effectively. The pool & bilateral deregulated market model has been considered for this study. The maximum system profit has been considerably achieved after optimal placement of wind generator and TCSC(s) in the system. The effectiveness of the proposed approach has been analyzed and tested in modified IEEE 14 bus and modified IEEE 118 bus test system. The proposed approach has been compared with the existing related approach for congestion mitigation, and better results have been achieved from the proposed approach.

Effect of Working Capital Management on Firm Performance: The Role of Ownership Structure

Current study investigates the effect of working capital management on firm performance with the moderating role of ownership structure. A random sample of 77 firms for the period 2011-2015 was selected. By using fixed effect model the study demonstrated statistically significant negative relationship of leverage, average collection period and quick ratio on firm performance, while current ratio, account payable and inventory turnover found with positive significant effect on Firm Performance. Further, the effect of working capital on firm performance was positively affected by Institutional ownership and negatively affected by Managerial ownership. Thus, the results suggest that the owner/manager needs to manage their limited resources efficiently for the improvement of profitability. It is also advised that investor and shareholder pay attention to the level of institutional and managerial ownership at the time of investment..

Liquidity profitability trade-off: Evidence from medium enterprises

Research Question: This paper examines the impact of liquidity on the profitability of the Serbian polluting medium sized enterprises. Motivation: We study the impact of traditional liquidity indicators and indicators based on cash flow on the profitability. In domestic literature, a contribution in the field of financial stability analysis based on cash-flow is rare, consequently we use cash flow indicators as a liquidity measure. Focus of this paper is on the medium sized enterprises in Serbia being the major sources of environmental pollution. Medium-sized enterprises are the main drivers of economic growth. For improving environmental performance and applying technologies and processes that meet environmental requirements, it is necessary the liquidity and profitability improvement. The progress in the area of environmental protection is the relevant part of the accession process of Serbia to the EU. Idea: The idea of this paper was to empirically examine the liquidity profitability trade-off of selected enterprises. The research was conducted using return on assets as the dependent variable, and three liquidity ratios and three cash flow based indicators as independent variables. Data: The financial analysis is based on the sample of 48 polluting medium-sized enterprises for the period 2010-2015. The official financial statements were taken from the Serbian Business Registers Agency. The data are used on an annual basis. Tools: We tested the panel regression model of profitability with the total number of observations being 288. We estimated the unbalanced panel because our dataset had missing values. It is used the standard pooled OLS estimator. Before estimated panel regression model, we did stationarity and cointegration analysis of sample data. Findings: The results of our study show a significant impact of quick liquidity ratio, cash flow operating margin and cash flow investing margin on profitability measured by return on assets. However, there are no significant effects of current liquidity ratio, operating cash flow liquidity ratio and cash flow financing margin on profitability. The conclusions of our paper refer to the selected enterprises in the observed periods. Contribution: This paper contributes both to the literature concerning liquidity and profitability analysis, since we use cash flow indicators as a liquidity measure.

Foreign Ownership, Agency Costs, and Long-Term Firm Growth: Evidence from Korea

This study examines the link between foreign ownership and firm value in the context of dividend payouts and long-term firm growth. Consistent with prior studies, we find that foreign ownership is positively related to firm value. Next, we find that changes in foreign ownership are negatively related to changes in agency costs, which is linked to the improvement of future firm profitability. We also find a positive relationship between foreign ownership and dividend payouts. We further find that dividend payouts are negatively related to 3-year-ahead and 5-year-ahead sales (or earnings) growth as a proxy for long-term firm growth. However, for firms with high foreign ownership, we find a positive relationship between dividend payouts and long-term firm growth. These findings indicate that foreign ownership has a moderating effect on dividend payouts and long-term firm growth. Overall, our results suggest that foreign investors are expected to provide managers with an incentive to pursue long-term value for the sake of shareholders by monitoring and disciplining managers. Our study contributes to a better understanding of the value-increasing effects of foreign ownership on firm value by demonstrating that the reduction in agency costs due to the foreign ownership effect is associated with higher growth rates and thus higher firm value. Our study also contributes to the literature on the foreign ownership–firm value nexus by showing that foreign investors play a crucial role in ensuring sustainable firm growth.

Application of Knowledge Management by Indigenous Contracting Firms for Construction Project Delivery

This study aims to assess readiness of Nigerian Indigenous Contractors (NIC) to adopt Knowledge Management (KM).This is achieved by identify in requirements for adopting KM; evaluating NICs preparedness to meet these requirements; and examining benefits of KM to NICs. Purposive sampling technique was adopted for the survey. Fifteen factor requirements for adoption of KM was identified from literature and structured into a questionnaire which was administered to NICs. Eighty-four copies of questionnaires were retrieved from the total sample size of 129, representing 65% response rate. Data was analyzed using percentages, and Relative Importance Index (RII). The factor requirements used for the survey achieved a Cronbach’s Alpha of 0.70 showing a high relationship between them. Results revealed that management’s strategic plan to adopt KM; and training/education of personnel are factors highly prioritized by NICs, but mechanism to enhance storing & retrieval of knowledge is yet to exist in 98% of the NICs sampled. Improvement of profitability and process enhancements are considered more important by NICs amongst derivable benefits from KM. The Study concluded that NICs are not yet prepared to adopt KM but are willing to explore its benefits for improved organisational performance.

Benefit and performance impact analysis of using hydrogen fuel cell powered e-taxi system on A320 class airliner

ABSTRACTThis paper presents the work carried out to evaluate the benefits and performance impacts of introducing a hydrogen fuel cell powered electric taxiing system to a conventional short-haul aircraft. Tasks carried out in this research and reported in this paper include the initial system design, hydrogen tank initial sizing, calculation of the impact on fuel burn and emissions and the evaluation of the effects on Direct Operating Cost (DOC). The Airbus A320 has been selected as the datum aircraft for sizing the system, and the benefits analysis is particularly focused on the fleet composition and financial data of a Europe-based, low-cost, large-scale A320 family operator in 2016. The maximum power capacity of 400 kW has been sized based on the rolling friction coefficient of 0.02. Based on the operator’s 2016 financial, up to 1% fuel reduction can be achieved using the proposed system and the reduction in total maintenance cost is expected to be up to 7.3%. Additionally, up to 5.97% net profit improvement is estimated in comparison with the annual after-tax profit of the datum operator in 2016.

The financial performance of firms participating in the EU emissions trading scheme

This study analyses the profitability of firms participating in the European Union Emissions Trading Scheme during the period from 2006 to 2014, covering the three phases of the scheme. The analysis covers a large dataset from 19 European Union countries and with five different modelling specifications. The examined models use firm-specific attributes, country-level data about the economic environment and energy-related characteristics. In particular, the influences of time/firm/country characteristics on profitability are examined by performing cross-classified multilevel modelling. The empirical results show that both economic and energy-related variables significantly influence firms' profitability. Measures such as reducing environmental impacts (verified emissions and allowances allocated) or increasing energy efficiency should be taken into consideration in decision-making for the firm's profitability improvement.

Profit inefficiency decomposition in a serial-structure system with resource sharing

Previous studies have used overall profit inefficiency (OPI) to assess the overall profit improvement of firms and decomposed OPI into technical and allocative components to identify the specific sources of overall potential gains. Resource sharing among the stages of the network structure system as a type of resource allocation is also a source of increasing system profit; however, this kind of source has not been identified and specified in previous works. Based on network data envelopment analysis (DEA), this study explores the OPI decomposition issue in a three-stage serial-structure system with resource sharing existing among stages. We prove that resource sharing among stages can bring potential gains. Using a multiplicative decomposition method based on the measure of profit ratios, we decompose the OPI into product of technical profit inefficiency (TPI), resource sharing profit inefficiency (RSPI), and free allocation profit inefficiency (FAPI), where the RSPI multiplies by FAPI is consistent with the allocative component in previous studies. A numerical example is used to illustrate our approach, and the results show that the overall potential gains can be decomposed into gains derived from removing technical inefficiency, resource sharing, and free allocation within the whole production possibility set.

Size Effects in Drivers of Profitability for Czech adn German Manufacturing Firms

Small and medium-sized enterprises (SMEs) represent the majority of firms within the manufacturing sector in Czechia and Germany; they play a very important role in the economic development and success of both countries. This paper presents a comparative analysis of size-specific profitability values among SMEs and large firms within the Czech and German manufacturing sectors. The data used were extracted from the BACH database of the European Union and cover the latest ten-year cycle (from 2008 to 2017). As with previous research in this field, an analytical model of common financial and accounting ratios is used to derive characteristic effects on profitability of empirically observed driver variables, including taxes, debt financing, asset structures and other aspects of operating profits. Structural differences in these underlying factors are tested for significance and are quantified to measure their impact on profitability. This approach provides valuable insights into the comparative advantages and disadvantages of the different size groups for the two countries. It presents effective starting points for specific benchmarking and the improvement of profitability.

Ensure optimum profit using linear programming a product-mix of textile manufacturing companies

An optimum profit is to be guaranteed for a rapidly changing manufacturing situation when the best product mix is produced. The product mix determination problem involves determining the optimal level of different products given a set of capacity limitations. This paper addresses a tool linear programming in operations research for determining the optimal allocation of limited resources in order to maximise profit. Fortunately, having well-formulated model, solution software package Excel Solver helps to determine the best combination of available resources. This paper considers a textile industrial unit in Ethiopia as a case study. In this company, the data gathered was used to estimate the parameters of the linear programming model. The findings of the study show that the profit of the company can be improved by 11.8% (= (66850232.79 ‒ 59793841.91 / 59793841.91)) if linear programming technique is used. This can be considered as a remarkable profit improvement. In addition, actual resource utilization can be significantly improved by adopting linear programming method.

State-wide soil health programs for education and on-farm assessment: Lessons learned

S oil health has received increased attention in recent years. The USDA Natural Resources Conservation Service (NRCS), state agencies, extension services, farm groups, nongovernmental organizations, and many others are working with farmers to provide education on and promote adoption of soil health systems. Farmers adapting the management of their operations to include these systems typically wish to measure improvements in profitability along with measurable improvements of soil health over time. Both the soil health assessment process and the educational programs require breadth and depth of knowledge from a team of people. The Indiana Conservation Cropping Systems Initiative (CCSI) is completing a comprehensive six year soil health project begun in 2012, involving 17 primary sites across the state in cooperation with numerous partners. Our experiences with this project, lessons learned, and recommendations for other projects of this type may be useful to groups just getting started with soil health education and on-farm assessment programs. Although some of our lessons learned are similar to those of the first three years of the Soil Health Partnership (Karlen et al. 2017), the CCSI project began two years earlier and was structured differently, with conservation partners as key drivers. Therefore, the lessons learned from both projects…

Knowledge Management for Professional Staffs in Hospital

In the era of National Health Security (NHS), every health service system is delivered under cost and quality controls so that efficient and effective health services could be achieved. Professional staffs of the hospital, including medical doctors, nurses, and midwives hold fundamental roles in hospital health services. Their fundamental roles are keys to the success of hospital perfomance. Hospital should realize the existance of professional staffs by paying attention to their knowledge, abilities, and skills. Development of knowledge, abilities, and skills is part of organization roles to manage knowledge resources in the hospital. The improvement of knowledge resources of professional staffs in the hospital provides key for the hospital to deliver the best services for the patients. Well-managed knowledge resources would improve knowledge management of hospital professional staffs and give the possibility of improving hospital perfomance. This literature study was focusing on how important knowledge management of hospital professional staffs in supporting hospital perfomance. Moreover, knowledge management would enable professional staffs learn continually by sharing experiences and improving themselves through continuing education so that improvement of service quality and profit of the hospital can be achieved. In the field of health, improvement of knowledge management for hospital staffs is expected to help understanding recent research and development, create good-quality services, decrease medical errors, and lower hospital costs, by which all of them are hoped to increase hospital competitiveness in the era of competition among hospitals. Keywords: Knowledge management, professional staff, hospital perfomance

Pathways to Profits: The Impact of Marketing vs. Finance Skills on Business Performance

This paper examines the impact of improvements in marketing skills relative to finance skills among small-scale entrepreneurs. It addresses three important questions: (1) What is the impact of marketing or finance skills on business profits? (2) How do improvements in marketing and finance skills respectively affect different business outcomes? (3) When are increases in marketing relative to finance skills more beneficial? Through a randomized control study of 852 firms in South Africa, the analysis finds significant improvements in profitability from both types of business skills training. However, the pathways to achieve these gains differ substantially between the two groups. The marketing group achieves greater profits by adopting a growth focus on higher sales, greater investments in stock and materials, and hiring more employees. The finance group achieves similar profit gains but through an efficiency focus on lower costs. Both groups show significantly higher adoption of business practices related to their respective training program. Consistent with a growth focus, marketing/sales skills are significantly more beneficial to businesses run by entrepreneurs with ex ante less exposure to different market contexts. In contrast and in line with an efficiency focus, it is the more established businesses that benefit significantly more from finance/accounting skills.Data and the online appendix are available at https://doi.org/10.1287/mnsc.2017.2920 .This paper was accepted by Eric Anderson, marketing.

Are farmer personality traits associated with farm profitability? Results from a survey of dairy farmers in England and Wales

Although the personality of the manager has been shown to predict performance in many fields, in agriculture, this relationship has not been studied in detail. In the study presented here, 59 dairy farm managers in England and Wales completed psychological assessments; on 40 of 53 measures, farmers were found to be distinct from the general working population norm. Significant correlations to farm profitability for four of the 53 measures were found. Almost 40% of the variation in farm profitability was predicted by a simple linear model with just three of these personality measures: ‘Detail Conscious’ and ‘Leadership’ measures positively and, ‘Relaxed’, negatively, predicted farm profitability. Though observational, and not demonstrating cause and effect, the associations are strong. These three measures are, thus, candidate variables for personality measures that drive farmer and farm manager performance. Longitudinal, or intervention studies, may demonstrate causality in the future. In the interim, being cognisant of these attributes during the hiring and training of farm staff, particularly those with management roles, may well result in improvements in farm profitability.

Developing User Perceived Value Based Pricing Models for Cloud Markets

With the rapid deployment of cloud computing infrastructures, understanding the economics of cloud computing has become a pressing issue for cloud service providers. However, existing pricing models rarely consider the dynamic interactions between user requests and the cloud service provider. Thus, the law of supply and demand in marketing is not fully explored in these pricing models. In this paper, we propose a dynamic pricing model based on the concept of user perceived value that accurately captures the real supply and demand relationship in the cloud service market. Subsequently, a profit maximization scheme is designed based on the dynamic pricing model that optimizes profit of the cloud service provider without violating service-level agreement. Finally, a dynamic closed loop control scheme is developed to adjust the cloud service price and multiserver configurations according to the dynamics of the cloud computing environment such as fluctuating electricity and rental fees. Extensive simulations using the data extracted from real-world applications validate the effectiveness of the proposed user perceived value-based pricing model and the dynamic profit maximization scheme. Our algorithm can achieve up to 31.32 percent profit improvement compared to a state-of-the-art approach.

Profit driven decision trees for churn prediction

Customer retention campaigns increasingly rely on predictive models to detect potential churners in a vast customer base. From the perspective of machine learning, the task of predicting customer churn can be presented as a binary classification problem. Using data on historic behavior, classification algorithms are built with the purpose of accurately predicting the probability of a customer defecting. The predictive churn models are then commonly selected based on accuracy related performance measures such as the area under the ROC curve (AUC). However, these models are often not well aligned with the core business requirement of profit maximization, in the sense that, the models fail to take into account not only misclassification costs, but also the benefits originating from a correct classification. Therefore, the aim is to construct churn prediction models that are profitable and preferably interpretable too. The recently developed expected maximum profit measure for customer churn (EMPC) has been proposed in order to select the most profitable churn model. We present a new classifier that integrates the EMPC metric directly into the model construction. Our technique, called ProfTree, uses an evolutionary algorithm for learning profit driven decision trees. In a benchmark study with real-life datasets from various telecommunication service providers, we show that ProfTree achieves significant profit improvements compared to classic accuracy driven tree-based methods.

Big Data in home healthcare: A new frontier in personalized medicine. Medical emergency services and prediction of hypertension risks

ABSTRACTThis paper provides an in-depth analysis of the Big Data application in the field of medicine. This innovative technology is a significant topic because Big Data introduces new opportunities for medical practitioners and patients, including the improvement of patients’ quality of life and healthcare systems, the mitigation of specific illnesses, and the reduction of state-level healthcare costs. This paper discusses implications relative to wearable sensing devices as well as personalised medicine. The advantages of the analytical capabilities of Big Data are also discussed. For instance, Big Data analytics can aid in the improvement of healthcare cost-efficiency and profit generating capabilities. The limitations and vulnerabilities of Big Data application in the healthcare field, such as the development of the domain-specific system architecture, are exposed. This paper examines the elements of architecture (data acquisition & transmission, cloud processing, and analytics) adapted to healthcare needs. A brief outline of the restrictions for official approval of the new devices and methodologies is presented. Specifically, the sensor data are heterogeneous and untagged. Previously, the implementation of clinical records into models was required. Currently, adaptation of machine-learning techniques is required. Ethical issues relative to the personal privacy involved in healthcare data acquisition, storage, and processing are considered.