Profit Improvement Research Articles

MERGERS AND ACQUISITIONS: A PRE AND POST FINANCIAL RATIO ANALYSIS EVALUATION. EVIDENCE FROM GREECE

The mergers and acquisitions are a modern phenomenon in the financial sector. Like every business, so are the Banks looking for opportunities and ways to become more competitive to cope with the changes in the market. In this article we examine the profitability, liquidity and operational financial ratios in a pre and post acquisition case study from the Greek Banking System. From the analysis of those ratios we try to find out if there is an improvement of them when the bidder bank takeovers a "bad" target bank, and if any improvement how many years after the acquisition observed. The case of a pre and post acquisition of Emporiki Bank of Greece by Alpha Bank of Greece is a representative case study for describing what happened in Greece during the before and after the financial crisis. For examine this case study we use financial analysis evaluation with the most significant financial ratios of the involved int acquisition Greek banks. The evaluation of the acquisition is made with the use of balance sheets and the financial reports of the banks pre and post the acquisition took place. The research is based on the use of liquidity profitability and operational ratios and so the performance of the involved banks is presented and analyzed before and after the acquisition. Presenting and analyzing the performance of the two involved in acquisition banks, with the help of financial data will lead to conclusions about whether the acquiring bank has achieved its objectives. Of course these objectives were the improvement of profitability liquidity and operation profit of the bidder Alpha Bank
 Keywords: Banks, Mergers & Acquisitions, Financial Ratio Analysis, Liquidity Profitability.
 JEL Classification: G21, G33, G34

Unsupervised parallel machines scheduling with tool switches

This paper addresses the problem of scheduling jobs on identical parallel machines with tool switches in a high-mix, low-volume manufacturing environment. Inspired by the initiatives on “lights-out factory” at our industry partner, our problem setting involves several complex features. For example, we consider unsupervised production hours (e.g., night shifts where operators are not available) in which tool switches cannot occur. Moreover, motivated by current practice, tool switches in our problem setting cause costs instead of delays. Also, a subset of jobs is prioritized to be completed within a scheduling horizon, and a job may consist of ordered operations due to reentry to machines. The objective is to maximize the profit generated by the manufacturing system, which is composed of revenue generated by the finished operations minus tool switching costs and penalty costs of unfinished priority jobs. The decisions involve assigning operations to machines, sequencing these operations, and determining a tool-switching plan. A mix-integer linear programming model is first formulated. We then propose a genetic algorithm to solve industry-size problem instances, in which tailored crossover and mutation mechanisms are introduced. We illustrate the performance of the proposed GA with industry case studies using real-world data. We also make the anonymized data set publicly available. Computational experiments reveal that approximately 26% profit improvement can be achieved by using the proposed GA instead of the current way of scheduling at our industry partner. Moreover, we find that the proposed GA brings higher benefits when the duration of the unsupervised shifts gets longer, and there is high pressure on prioritizing jobs in the schedule.

Network design with consideration of hours‐of‐service regulation and drop‐and‐swap trailer operations

AbstractThis research, motivated by collaboration with a leading manufacturer and distributor of building products, introduces two distribution network design models considering federally mandated hours of service restrictions on truck drivers and drop‐and‐swap trailer operations. A key feature of the drop‐and‐swap transport mode is the decoupling of linehaul and last‐mile delivery operations, which enables geographic extension of last‐mile delivery routes while complying with hours of service driver regulations and providing next‐day delivery service. The models simultaneously determine the profit‐maximizing size, number, and location of order fulfillment facilities and satellite drop‐and‐swap terminals, and systemwide transportation flows. A case study of the firm's distribution network reveals that the new location models improve profitability by approximately 5% when compared with traditional network design approaches. An experimental study of five marketing and operational characteristics shows when the models are most advantageously applied. Overall, profit improvements range from 2.32% to 10.97% on a set of 288 test problems. The research provides new insights for integrated facility location and transportation strategic design. The potential application of the models in a variety of e‐commerce scenarios is promising.

Private Shareholder Engagements on Material ESG Issues

We study private shareholder engagements with 2,465 listed firms about environmental, social, and governance (ESG) issues from 2007 to 2020. We examine the extent to which private engagements address financially material ESG issues and contribute to firm performance. We find that material engagements succeed more often than immaterial engagements and that the targets of successful material engagements significantly outperform their peers by 2.5% over the next 14 months. Further, we find that material engagements are more often associated with improvements in profitability and cost ratios than immaterial engagements. Finally, our evidence indicates that a decrease in CO2e emission intensity accompanies environmental engagements.

A collaborative approach based on Shapley value for carriers in the supply chain distribution

This paper addresses the problem of horizontal collaboration between carriers at the tactical planning level of the supply chain distribution. The study focuses on the relationship between a shipper and many carriers used to serve the transport requests of several geographically distributed customers. A profit sharing mechanism based on game theory is proposed in order to implement win-win collaboration between the carriers. The Shapley value is used to fairly share the profit of the grand coalition between the carriers. The collaboration is supported by mixed-integer linear programming model for the transport planning of all possible coalitions consisted by the carriers. The transport plans and the profit of each carrier can be generated by model simulation. The validity of the collaboration is checked by the super-additivity property of the game in each experiment. According to the subcontracting is allowed or not, the experimentations are carried out in two different contexts with realistic data sets. The experimental results show that each carrier's profit improvement is significant for all experiments, and that the collaboration also improves the customer service rate.

Pricing and Coordination for the Leasing and Recycling of Construction Machinery in a Supply Chain Based on Industrial Internet Platform

Leasing and recycling are important methods for developing the low-carbon sustainability of the construction machinery industry. However, there are some dilemmas caused by the extreme limitations of product service life. There has been little research on construction machinery leasing thus far and a lack of description of its unique characteristics in previous models. Focusing on the problem of pricing and coordination, a two-stage model of a leasing closed-loop supply chain based on the practical application of an Industrial Internet platform was proposed. Under centralized and decentralized decision-making scenarios, the prices of leasing and selling, maintenance effort, and recovery rate were calculated, respectively. By using the Shapley value method to optimize the selling price, and the two-part pricing contract to calculate the compensation fee, global profits can be reasonably distributed, while the supply chain can be improved. The effects of different contracts on the improvement of supply chain profit were investigated. Additionally, the correlation among parameters was explored via sensitivity analysis and numerical simulation. The findings show that the maintenance and recycling of construction machinery can be improved by using an Industrial Internet platform while achieving supply chain coordination via contracts. The enhancement of maintenance effort can decrease remanufacturing costs, which are positively correlated with the selling price and leasing price of products, further promoting the recovery rate of used products. The findings of this paper show that manufacturers can take advantage of the Industrial Internet platform to improve recycling efficiency as well as to decrease product prices and remanufacturing costs by promoting remanufacturing technologies. On the other hand, leasers need to enhance the maintenance of construction machinery. Strengthening cooperation via contracts can jointly promote leasing and recycling in the construction machinery industry and help achieve low-carbon sustainable development.

컴파운딩 업체의 TDABC 적용사례 연구: K사 TDABC 적용 및 수익성 개선

Purpose - The purpose of this study is to find out how a company can do reasonable cost calculations in a simple way and establish profitability improvement strategies based on the results. Design/methodology/approach - In this study, a case that compounding company K applied TDABC was studied. A case study was conducted on the process of company K reviewing and applying TDABC and the process of implementing the cost calculation for each product by applying TDABC, and establishing a profitability improvement strategy for each product based on the results. Findings - Company K rearranged the production standard information of the compounding industry such as productivity and batch size of each product to apply TDABC. Cost calculation was performed for each product according to the revised production standard information. After the cost calculation for each product was carried out, Company K established a strategy to improve profitability of each product. The profitability improvement strategy was implemented in two ways: a cost reduction strategy and a product price increase strategy. As a result of the final strategy execution, the profitability of each product was improved. Research implications or Originality - This study found a reasonable costing standard in consideration of the specificity of the research target company, and applied it to cost calculation cost for each product. It contains the process of establishing production and sales strategies for each product based on the cost calculation results. It is expected that this case study will serve as a good reference material for establishing cost calculation and profitability improvement strategies in similar businesses.

Porcelain Supply Chain Coordination Considering the Preferences of Consumers against the Background of E-Commerce

In e-commerce transactions, the packaging level of porcelain, to a certain extent, determines the loss rate of goods in the transportation process. Therefore, encouraging decisionmakers to improve the packaging level is key to coordinating the supply chain of porcelain. Considering consumers’ preferences for packaging level, this paper constructs three kinds of porcelain supply chain decision-making models, including the impact of the packaging level on porcelain transport losses and after-sales problems caused by transport losses. Using Stackelberg game knowledge, the equilibrium decision and supply chain profit under three decision models are compared and analyzed. The main findings are as follows: the decision and profit are better in the centralized decision-making mode. In the decentralized decision-making model, the profit of the leader is higher than that of the follower. Consumers’ preferences for porcelain packaging and the value coefficient of packaging protection have a positive effect on the improvement of supply chain profits and the level of porcelain packaging. In addition, in view of the decentralized decision-making model led by suppliers, this paper introduces a joint contract to encourage the members of the supply chain to improve the packaging level of porcelain and achieve the perfect coordination of the supply chain.

CausalViT: Domain generalization for chemical engineering process fault detection and diagnosis

Fault detection and diagnosis (FDD) is a promising technology for safe operation, quality control, and profitability improvement in chemical process systems. In practice, chemical process systems usually switch among operating conditions in response to market demands, fatigue, malfunctions of components and environments. However, FDD models often deteriorate when transferred from one operating condition to another. Current widely used FDD models are trained and tested in identical domains (or operating conditions) without emphasis on the capability of domain generalization. Furthermore, they ignore the causality that remains invariant among domains but excessively rely on statistical correlation that varies from domain to domain. This paper presents an FDD model named CausalViT. Causality and a gradient reversal operation are designed to enhance domain generalization. In CausalViT, a Causal Layer is constructed to discover the causal mechanism in features to purify superfluous domain-specific statistical correlation. Then, a domain classifier cooperating with gradient reversal layers is developed to further enhance the domain invariance. To evaluate the CausalViT, comparisons have been made between it and other advanced FDD models in six domains/modes in Tennessee Eastman Process. CausalViT shows superiority from the perspectives of both fault detection ratio and domain generalization, obtaining an average 16% improvement on domain generalization. Dimension reduction visualization shows the significance of domain generalization and gives a deeper insight into CausalViT. Furthermore, the convergence of the model and the effectiveness of components in the model have been analyzed and demonstrated.

Profit-oriented High-speed Railway Network Line Planning with Capacity Limitations

Abstract: Line planning is the transportation service's fundamental, which directly affects the subsequent operation plans. It is better to focus on the operational profit when considering the market competition for transportation operation plans. This paper aims to maximize the operational profit when optimizing the high-speed railway network line plan by constructing a mixed integer nonlinear programming model. The model integrates line planning and passenger route choice behaviors. An adaptive simulated annealing algorithm with neighborhood search is applied based on a given line pool. A heuristic passenger assignment method is developed to ensure a high level of passenger satisfaction. The proposed model and algorithm are experimentally evaluated. The instance results show that the operational profit and capacity utilization can be significantly improved. Compared with the designed greedy heuristic algorithm, the proposed algorithm performs better in operational profit improvement and has high efficiency.

FOAM ACID FRACTURE AS AN ALTERNATIVE TO STANDARD FRACKING AND LIQUID-LESS METHODS OF ROCKS LIQUIDATION

The article discusses the issue of the resource potential of tight terrigenous gas-saturated reservoirs, which lie at significant depths within the central part of the Dnipro-Donetsk oil and gas-bearing region, and ways to solve problems related to the methods of development of these deposits, since they are non-convective and cannot be extracted by the classical method. Within the scope of this issue, the article considers the method of hydraulic fracturing as one of the most effective ways of causing the inflow of hydrocarbons from the productive horizon and intensifying the development of hard-to-extract deposits. An overview of fracturing substances used for the process of densification of rocks, in particular, liquids based on water, hydrocarbon, acid bases, liquid-free methods and foam systems, was performed. The compositions of the reagents, the features of their use, and their main disadvantages are listed. Examples of world experience in the use of well-known fracturing fluids and fluid-free methods of reservoir densification are given.In this work, attention is focused on increasing the permeability of rocks through the use of foam acid systems, since, as experience shows, they are highly effective in conditions of tightand heterogeneous reservoirs due to their selectivity, they can be adapted to rocks of various lithological and mineralogical composition and a wide range thermo-baric conditions, they have satisfactory transport properties and the ability to cause self-cleaning of the well.The main reasons for popularizing the use of methods of loosening rocks with a minimum liquid content in the composition of explosive substances for unconventional gas deposits of Ukraine are highlighted. It is recommended to carry out work on the creation of more effective, ecological and economically profitable new or improvement of existing disintegrants, especially foam systems.

A game-theoretic model for crowd-shipping operations with profit improvement strategies

Taking advantage of app-based platform technologies to connect consignees and shippers, individual-based crowd-shipping (CS) services have become an emerging solution to intra-city deliveries. Compared with conventional logistics (CL) services, the individual-based CS service incentives ordinary people to use social networking to behave collaboratively for alternative deliveries. However, the interactions among several players in the intra-city delivery market with both CS and CL services are not fully investigated, so as the mutual attraction on consignees and shippers and their influences on the CS operations. Motivated by this, we propose a game-theoretic model to explore the CS operations, where indirect network effects are considered to model the mutual attractions between demands and supplies. The optimal strategies of different players are derived from this model, including the price decisions of the CS platform (fare charged from consignees and compensation paid to shippers) and the choice decisions of consignees (CS vs. CL services) and shippers (CS delivery vs. alternative activity). Results show that the indirect network effects reshape the intra-city delivery market with positive effects on the CS market share and the CS platform's profit. Viable policy implications and managerial insights for promoting CS development such as selecting target markets to launch CS services, expanding CS businesses, stimulating CS supplies, and enhancing CS services are proposed.

Profitability Assessment of Windfarm Overplanting in Spain

The efforts made by European institutions to decarbonise the electricity system over the last decade have led Spain to become the fifth country in the world in terms of wind power plant capacity in 2021. This major achievement is still far from being able to contain and limit CO2 emissions. By 2030, it is expected that, together with photovoltaic energy, Spain will reach 74 % of renewable generation in its electricity system. Wind technology is currently very mature in onshore wind farms and its relatively low cost makes this technology attractive to investors. However, the best wind sites were the first places to be occupied by the first turbine generations. On the other hand, newer wind farms occupy sites with less wind resource but have more efficient turbines. To improve the profitability of the wind farm and increase its production, the feasibility of other alternatives such as overplanting or storage is beginning to be investigated. Overplanting aims to optimise the use of the transmission system by increasing wind capacity above the transmission capacity limit. In this work, we measure the profitability of an overplanting strategy by quantifying the parameters that make profitable the investment. The developed model optimised the production of energy taking into account technical and financial parameters in order to cover a wide range of situations. We analysed the case of a specific site with 25 2 MW turbines with the Python tool PyWake. The results obtained show that for each new turbine the annual energy produced (AEP) grows by around 3.87 GWh per turbine added (a cut of 1.69 GWh due to congestion of the transmission system). The study shows improvements in profitability when the electricity price exceeds 70 €/MWh.

Productivity and profitability improvement of fodder maize under combined application of indigenously prepared panchagavya with organic and inorganic sources of nutrient

Irrational use of chemical fertilizers creates harmful effects on soil health and thus, led to a drop in crop productivity in the Indo-Gangetic Plains region (IGPR) of India. Organic nutrient sources such as Panchagavya and PGPR can be used to replace some proportion of chemical fertilizers to sustain productivity and soil health in the IGPR belt. This study was undertaken to determine the effect of integrated use of chemical fertilizers, organic manures and bio-fertilizers such as Panchagavya and PGPR on the productivity and economic feasibility of different maize cultivars. Results indicated that the J-1006 cultivar showed significantly higher fodder yield, nutrient use efficiencies and profitability than P-3396 and African Tall during both years. Though, nutrient content and accumulation were statistically at par with J-1006 and P-3396, but superior over African Tall. Among nutrient management, the maize fertilized with 75% RDF + PGPR +Panchagavya spray showed significantly higher fodder yield, nutrient content, accumulation, nutrient use efficiencies and net returns compared to control and 100% RDF. Overall, the growing of maize cv. J-1006 with the application of 75% RDF + PGPR + Panchagavya spray can be recommended to enhance fodder productivity, nutrient accumulation and profitability in the IGPR belt of India.

Manufacturer encroachment on a green supply chain with environmental labeling

AbstractThis paper investigates manufacturer encroachment on a green supply chain wherein alternative environmental labels are utilized to disclose the hidden product greenness attribute. We show that both self‐ and government labels facilitate and adjust the promotion effect of encroachment on product greenness, stimulating green demand and retail prices for profitability improvement and raising wholesale prices for investment sharing. The difference is that self‐labeling's low credibility and complete self‐interest features only induce inferior greenness increments and coordination effects. Government labeling outperforms self‐labeling in simultaneously optimizing the interests of the manufacturer, retailer, and society, presuming the benefits of greenness improvement reimburse investments.

Modelling the effects of metro and bike-sharing cooperation: Cost-sharing mode vs information-sharing mode

Bike-sharing provides a key role in offering a solution to the first- and last-mile problem, and thus extends the service catchment areas of public transport and facilitates low-carbon travel in urban transport systems. Despite the fact that it has become popular for metro and bike-sharing operators to cooperate to improve their services in recent years, the effect of cooperation modes has largely been neglected in the literature. We thus develop a metro-lead Stackelberg game model to investigate the strategic interaction and potential integration between a bike-sharing operator and a metro operator under different cooperation modes; i.e., the cost-sharing mode (CS mode) and the information-sharing mode (IS mode). We analytically and numerically examine the impact of the CS and IS modes on the participants’ pricing and effort decisions. This paper highlights the value of a carefully designed cooperation mode on benefiting operators (profits) and society (demand for green travel). Specifically, the IS mode enables both operators to gain a profit increment, leading to a win-win situation from the profit point of view. This superior performance of the IS mode remains robust, regardless of whether the bike-sharing operator is fairness-neutral or fairness-concerned. The CS mode benefits the metro operator yet hurts the profitability of the bike-sharing operator. Interestingly, the CS mechanism can effectively promote the demand for connecting travel, which might explain the adoption of the CS mode by bike-sharing operators in practice. That is, the increased demand created by the CS mode caters to bike-sharing operators whose primary goal is to capture markets, commonly for new entrants. Essentially, the IS mode also has a positive effect on increasing demand, and the dominance of these two cooperation modes regarding the promotion of demand is sensitive to the cost efficiency of each operator. Additionally, we find that a greater degree of fairness concern weakens (strengthens) the superiority of the IS (CS) mode in both demand promotion and profit improvement. Our results provide novel insights into how cooperation mechanisms impact the integrated operation of metro and bike-sharing systems.

PROFITABILITY IN ECUADORIAN PRIVATE BANKING AND FINANCIAL INCLUSION

In recent years, financial inclusion has taken importance worldwide, in this sense this research aimed to analyze the relationship between the profitability of Ecuadorian private banking and financial inclusion. The type of research used was quantitative due to it involves data from 15 banking entities between 2002 - 2019, in addition, some linear regression models were applied the same that allowed establishing the relationship among the variables, which showed a positive relationship between bank profitability and inclusion. Financial. The results obtained show that financial inclusion positively affects the profitability of banks in Ecuador. it is concluded that an increase in financial inclusion can generate an improvement in bank profitability, showing a direct and positive relationship between Loans / GDP, Financial Intermediation, Return on assets, Return on equity , Financial Net Margin, it is worth mentioning that financial inclusion allows improving the profitability of banks

The Brushing Game in Online Marketplaces

ABSTRACT We study a pervasive fraudulent strategy, called “brushing,” employed by retailers operating in e-commerce platforms: Retailers place fake orders of their own products to inflate sales and boost the visibility of their store links in search results. Using a duopolistic pricing game with heterogeneous consumer search behavior, we show that the retailer at a more prominent position in product listing enjoys greater profit as well as an advantage in future position allocation if the platform charges a per-sale commission fee and uses a sales-based ranking mechanism to display store-link positions. To fight for better visibility, retailers may employ brushing to boost their sales metrics. We characterize the equilibrium brushing behavior for the position competition game between the retailers. Under a sufficiently high commission rate, the game has a pure-strategy equilibrium and entails no-brushing outcome. Otherwise, retailers fully engage in brushing activity and the brushing equilibrium exists only in mixed strategies. Model extensions incorporating heterogeneities in wholesale cost and product quality show that retailers with cost and quality advantages are able to gain profit improvement at a less prominent position and thereby have less incentive to invest in brushing. Our results provide platform managers and retailers with economic insights to better understand the logic for brushing fraud and strategic decisions in online marketplaces.

Demand Learning Through Social Media Exposure in the Luxury Fashion Industry: See Now Buy Now Versus See Now Buy Later

Recently, luxury fashion brands can webcast fashion shows and analyze market feedback from social media exposure (SME). See now buy now (SNBN), a new product introduction system that allows consumers to purchase products after fashion shows, has been deemed a revolutionary movement in the fashion industry. Whether SNBN can replace see now buy later (SNBL), the traditional system in which consumers purchase products several months after fashion shows, is unclear. In this article we evaluate the value of demand learning through SME for SNBL and SNBN. We develop a stylish two-period model to characterize SNBL and SNBN with SME. We find that when the feedback accuracy and holding cost are sufficiently low, SNBN performs better than SNBL with SME. Furthermore, for SNBL, when the consumer valuation is relatively low, learning market responses from SME is effective and profit improvement with SME decreases. For SNBN, SME is not always effective. Our results imply that brands, such as Gucci, should sell trendy and fashionable items via SNBL without SME and classic products (products with high consumer preference) via SME. Brands, such as Burberry, should sell low holding cost products (e.g., shirts) through SNBN and high holding cost products (e.g., leather bags) through SNBL.

The standard reverse approach for decomposing economic inefficiency

The traditional approach decomposing profit inefficiency into the sum of its technical and its allocative components identifies first the frontier projection of each firm based on the exogenous choice of a specific technical measure, e.g., based on slacks, directional, etc. However, in real life situations, firms and organizations are interested in benchmarking themselves against competitors representing the largest feasible profit improvement given market prices. Resorting to the recently defined general direct approach decomposition of profit inefficiency, which decomposes profit loss into the profit technical gap existing between the firm and its frontier projection, and a remaining profit allocative gap, we introduce a decomposition that endogenizes the technical component. This is achieved by securing technical inefficiency reductions that, simultaneously, search to maximize the profit of the projected benchmark. The proposal defines a new measure of technical inefficiency that corresponds to a monetized version of the weighted additive model. We also present a normalized version of the reversed decomposition that is units’ invariant through the definition of a suitable normalization factor.