Showing papers by "HEC Montréal published in 2002"

A Tabu Search Heuristic for the Static Multi-Vehicle Dial-a-Ride Problem

Abstract: This article describes a tabu search heuristic for the dial-a-ride problem with the following characteristics. Users specify transportation requests between origins and destinations. They may provide a time window on their desired departure or arrival time. Transportation is supplied by a fleet of vehicles based at a common depot. The aim is to design a set of least cost vehicle routes capable of accommodating all requests. Side constraints relate to vehicle capacity, route duration and the maximum ride time of any user. Extensive computational results are reported on randomly generated and real-life data sets.

The Corruption of Managerial Techniques by Organizations

Abstract: Public sector organizations are under pressure to adopt private sector tools to sustain legitimacy despite uncertainty about the compatibility of the techniques with this context. We explore the consequences of the misfit between the theories underlying two widely adopted managerial techniques (strategic planning and quality management) and the pluralistic power structure and values of public hospitals. We identify four scenarios of adaptation and use qualitative data to examine their empirical prevalence. We suggest that when the compatibility gap is large, there is greater likelihood that formalized techniques will be captured by and integrated into existing organizational dynamics (corruption of the technique) than that the technique will change these dynamics in a way consistent with its objectives (transformation of the organization). We examine the implications of our observations for understanding the role of managerial techniques in organizational change.

Hybrid stockless: a case study

Abstract: Due to the diversity of its players, the American healthcare sector has experimented with different types of integrated supply chain management systems for medical supplies. In the 1980s, US distributors were offering customers the so‐called stockless replenishment method, whereby the distributor picks and packs products according to the particular needs of each patient care unit and, in most cases, delivers them directly. By the late 1990s, stockless agreements had run out of steam, as distributors sought to optimize the balance between their efforts expended in hospital replenishment and the hospitals’ inventory savings. Among the various reflections and initiatives aimed at finding such a new balance, we focused on the experience of a Quebec (Canada) hospital adopting a hybrid version of the stockless system, under which the distributor supplied high‐volume products for the patient care unit in case quantities, leaving the institution’s central stores to break down bulk purchases of low‐volume products into point‐of‐use format (eaches). The study reveals marginal benefits from the hybrid method for both the institution and the distributor. However, it also reveals the importance of the manufacturer’s role with respect to packing formats, and demonstrates that the rearrangement of storage areas can generate substantial savings, opening the way to means for improving the healthcare sector supply chain.

Understanding consumer reactions to premium‐based promotional offers

Abstract: Reports the results of a three‐study research program whose purpose is to gain a better understanding of consumer reactions to premium‐based promotional offers. In the first study, elaborates and evaluates a comprehensive typology of premium‐based promotional offers with respect to its content and predictive validity. In the next study, explores the semantics that are used by consumers when they are presented with premium promotions and develops a series of research hypotheses from qualitative interviews with 12 consumers. In the final study, conducts a survey of 182 adult consumers to test these research hypotheses. The results reveal that consumer appreciation of premium‐based promotional offers is more positive when the premium is direct than when it is delayed, when there is a relatively lower quantity of product to purchase, when the value of the premium is mentioned, when brand attitude is positive, when interest in the premium is great, and when consumers are characterized by deal‐proneness and compulsive buying tendencies. Consumers’ perception of manipulation intent is affected mainly by directness of the premium, mention of the value of the premium, interest in the premium, and deal‐proneness.

A resource-based analysis of IT sourcing

Abstract: This paper studies the relationships between the choice of a sourcing mode for information systems, the value of the resources used in systems development activities and the presence of those resources at a sufficient level within the firm. The objective is to better understand the factors underlying the decision to keep the development of an information system inside the firm or to entrust it to an outside partner. A sourcing model is proposed using the resource-based theory. A case study is used to illustrate the concepts included in the research model. Data from this case illustrate how the model could be used to predict the appropriate sourcing mode, given the availability of the necessary resources and their strategic value.

Do We Need CAPM for Capital Budgeting

Abstract: A key input to the capital budgeting process is the cost of capital. Financial managers most often use the CAPM for estimating the cost of capital for which they need to know the market risk premium. Textbooks advocate using the historical value for the U.S. equity premium as the market risk premium. The CAPM as a model has been seriously challenged in the academic literature. In addition recent research indicates that the true market risk premium might have been as low as half the historical U.S. equity premium during the last two decades. If business finance courses have been teaching the use of the wrong model along with wrong inputs for twenty years, why has no one complained? We provide an answer to this puzzle.

Capital Structure and Asset Prices: Some Effects of Bankruptcy Procedures

Abstract: This paper examines the impact of the U.S. bankruptcy procedures on the valuation of corporate securities and capital structure decisions. We provide closed-form solutions for the values of corporate debt and equity when defaulting firms can either liquidate their assets or renegotiate outstanding debt under the Court protection. The paper shows that the possibility to renegotiate the debt contract (i) has an ambiguous impact on leverage choices and (ii) unambiguously increases credit spreads on corporate debt. The analysis also reveals that the sharing rule of cash flows during bankruptcy has a large impact on optimal leverage. By contrast, credit spreads on corporate debt show little sensitivity to this very parameter.

What makes contact employees perform? Reactions to employee perceptions of managerial practices

Abstract: Which type of managerial control makes bank contact employees more likely to perform so called prosocial behavior toward their customers (i.e. behaviors which contribute to the bank’s positive image, perceived good service and customers’ satisfaction)? Four types of formal controls are considered here: training, behavioral control, pay administration and managerial orientation. An empirical study performed in six branches of a charter bank shows that pay management has the strongest effect on service employee prosocial behavior. Training also affects prosocial behavior significantly, but not as strongly as does perceived pay fairness. In addition it is shown that pay is the primary contributor to these employees’ perceived workplace fairness.

The Statement of Corporate Governance Practices (SCGP) A Voluntary Disclosure and Corporate governance Perspective

Abstract: Corporate governance has recently given rise to concern and public debate in Canada and on the international scene. Reaction in Canada has focused on extending the regulation of corporate disclosure with regard to corporate governance. Following the recommendation of the Dey Report, companies are now required by the TSE to provide a Statement of Corporate Governance Practices (SCGP). The need for regulation to influence corporate governance structure and disclosure is often challenged in the literature. This study contributes to the debate by providing empirical evidence to regulators on the incentives for some corporations to engage in better quality SCGP than others. The existing voluntary disclosure and corporate governance literatures are used to develop hypotheses about explanatory variables. The CICA's published ratings for 1996 and 1997 of firms' SCGP serve as benchmarks for disclosure quality, the dependant variable. Except for size and, to a lesser extent, ownership structure, we did not find consistent and significant relations between the SCGP quality and firm performance or other corporate governance variables such as the proportion of unrelated director, the CEO's plurality of offices and the level of financing activity. Thus, our study falls short of providing a basis for further regulatory action in the area of corporate governance disclosure.

Managing IT Outsourcing Risk: Lessons Learned

Abstract: Risk is inherent to almost any business decision. New product development, capital investments, and implementation of state of the art technology are often used as examples of risky business ventures; while they may lead to major benefits, they may also result in important losses. Outsourcing decisions, and contractual arrangements of the type required by an IT outsourcing deal, are another example of a risky business endeavor. While it can lead to lower costs, economies of scale, access to specialized resources, and new business ventures (Gupta and Gupta, 1992 ; Huff, 1991), outsourcing can have unwanted outcomes such as escalating costs, diminishing service levels, and loss of expertise, to name a few (Earl, 1996; Gack, 1994 ; Lacity and Hirschheim, 1993).

An optimization model for a real-time flight scheduling problem

Abstract: Although airlines plan aircraft routes and crew schedules in advance, perturbations occur everyday. As a result, flight schedules may become infeasible and would need to be updated. This Day of Operations Scheduling problem impacts the entire system of an airline as the decisions enforced are final. When perturbations are relatively small, the airline may be able to at least preserve the planned aircraft and crew itineraries. We propose a model that determines new flight schedules based on planned crew transfers, rest periods, passenger connections, and maintenance. Its dual is shown to be a network model, hence solvable in a real-time environment. In addition, it can be used in more sophisticated operational and planning systems.

Workers' Compensation, Moral Hazard, and the Composition of Workplace Injuries

Abstract: This paper provides evidence that workers' compensation insurance (WC) affects not only the occurrence but also the composition of reported injuries. In our theoretical approach, WC is the source of two interrelated moral hazard problems: underprovision of accident-preventing efforts by the insured worker (ex ante moral hazard) and false reporting of injuries (ex post moral hazard). Our model predicts that, under certain assumptions, the impact of WC benefits is stronger on the probability of reporting a difficult-to-diagnose injury than on the probability of reporting an injury that is easy to diagnose. Panel data on 9,800 workers in the Quebec construction industry over each month of the period 1977-86, combining administrative data from the Quebec Construction Board with data from the Quebec Workers' Compensation Board, are used for the estimates. The parameters of the model are estimated using a threealternative logit kernel [hybrid multinomial probit (MNP)] framework with individual random effects. Our results confirm our theoretical pre

The Justification of Knowledge Tracking the Translations of Quality

Abstract: Current theories of organizational learning that emphasize knowledge creation and transformation assume, but fail to problematize, the justification of belief in new knowledge, although they admit it is an essential enabling condition for the dissemination and integration of innovative ideas and practices into organizational practice. The present article aims to correct this imbalance by (1) developing a theoretical framework for the study of organizational justification of belief, and (2) reporting on an empirical study of the processes by which quality management progressively became accepted as a solution to the economic problems encountered by enterprise during the decade of the 1980s. Grounded in a constructivist view of knowledge, we demonstrate that what Nonaka and Takeuchi refer to as a managerial intention is in fact the product of a process of learning, involving the play of both external and internal influences, channeled through the continuing association and disassociation of interests that r...

Marriage Market, Divorce Legislation, and Household Labor Supply

Abstract: This paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply. In our approach, the sex ratio in the marriage market and the rules governing divorce are examples of "distribution factors." These factors are defined as variables that affect the household members' bargaining position but not preferences or the joint budget set. We extend the collective labor supply model developed by Chiappori to allow for distribution factors. We show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process. The model is estimated using PSID data for the year 1988. Our results do not reject the restrictions imposed by the model. Also, the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects.

L’éclatement de l’emploi traditionnel : les défis posés par la diversité des emplois typiques et atypiques

Abstract: L’emploi traditionnel eclate de plus en plus pour donner naissance a une grande diversite d’emplois atypiques. Ce nouveau phenomene, qui est encore mal connu, pose de nombreux defis tant aux gestionnaires qu’aux travailleurs et a la societe. Un des problemes majeurs pour gerer ces enjeux est la difficulte de cerner adequatement l’ampleur et la nature des transformations actuelles parce que les differentes formes de travail atypique n’ont pas encore ete clairement definies. La contribution de cet article est de clarifier les differentes formes de travail a l’aide de deux typologies, une typologie des formes de travail et une typologie des travailleurs. L’etude revele que plusieurs defis importants poses par cette nouvelle realite dependent a la fois de la forme de travail atypique concernee et des caracteristiques des travailleurs.

An application of simulation to analyse resource sharing among health‐care organisations

Abstract: In the field of inventory management, it is a well‐known fact that centralisation, by sharing the risk between several entities, helps reduce the inventory required to provide a certain level of service. In practice, centralisation can be difficult to accomplish, because improvements to the system’s general performance may be achieved at the expense of some of the entities involved. This paper describes a simulation‐based methodology used to study the impacts of equipment pooling on a group of local community service centres (CLSCs) in the Montreal (Canada) region. In addition to quantifying the benefits of the pooling process, the approach allowed the stakeholders to reach an agreement by appraising various pooling scenarios and identifying the conditions that would help ensure fairness.

Design of Balanced MBA Student Teams

Abstract: In some schools and universities, students must sometimes be divided into several teams in such a way that each team provides a good representation of the classroom population. In this paper, two different ways of measuring the balance among teams are proposed: min-sum and min-max objective functions. For the first function and the L1-norm used in the space of attributes, an exact solution method based on a set partitioning formulation and on the enumeration of all possible team patterns is presented. For the second objective function, a set partitioning formulation is also considered, but as an approximation. In order to solve large problem instances, we have also developed metaheuristics based on variable neighbourhood search. Models and methods are tested on data from an MBA programme.

Filtering for Current Analysis

Abstract: This paper shows how existing band-pass filtering techniques and their extension can be applied to the common current-analysis problem of estimating current trends or cycles.

Tests of serial independence based on Kendall's process

Abstract: The authors propose new rank statistics for testing the white noise hypothesis in a time series. These statistics are Cram´ er-von Mises and Kolmogorov-Smirnov functionals of an empirical distribution function whose mean is related to a serial version of Kendall's tau through a linear transform. The authors determine the asymptotic behaviour of the underlying serial process and the large-sample distribution of the proposed statistics under the null hypothesis of white noise. They also present simulation results showing the power of their tests.

R&D in Markets with Network Externalities

Abstract: We study how network externalities affect research and development (R&D) investments by a non-cooperative duopoly that offers compatible products. We find that multiple R&D equilibria may arise when network externalities are non linear in the number of consumers. The lowest R&D equilibrium corresponds to the case where network externalities are absent. However, even in the presence of network externalities, firms may be trapped in a low-R&D equilibrium where output, and therefore consumers' valuation of the network size, is low. We derive the conditions under which the highest-R&D equilibrium Pareto dominates.

An Affine-Invariant Multivariate Sign Test for Cluster Correlated Data

Abstract: The author presents a multivariate location model for cluster correlated observations He proposes an affine-invariant multivariate sign statistic for testing the value of the location parameter His statistic is an adaptation of that proposed by Randles (2000) The author shows, under very mild conditions, that his test statistic is asymptotically distributed as a chi-squared random variable under the null hypothesis In particular, the test can be used for skewed populations In the context of a general multivariate normal model, the author obtains values of his test's Pitman asymptotic efficiency relative to another test based on the overall average He shows that there is an improvement in the relative performance of the new test as soon as intra-cluster correlation is present Even in the univariate case, the new test can be very competitive for Gaussian data Furthermore, the statistic is easy to compute, even for large dimensional data The author shows through simulations that his test performs well compared to the average-based test He illustrates its use with real data L'auteur presente un modele de position multivarie pour donnees correlees en grappes Il propose une statistique du signe multivarie affine-invariant permettant de tester la valeur du vecteur de position Sa statistique est une adaptation de celle proposee par Randles (2000) L'auteur montre que sous des conditions peu restrictives, la loi asymptotique de sa statistique sous l'hypothese nulle est celle du khi-deux En particulier, le test peut ětre utilise avec des populations asymetriques Dans le cadre d'un modele multinormal general, l'auteur calcule les valeurs de l'efficacite asymptotique de Pitman de son test par rapport a un autre test base sur la moyenne globale Ses resultats montrent que la performance du nouveau test s'ameliore en presence de correlation intra-grappe Měme dans le cas univarie, le nouveau test s'avere tres performant pour des donnees gaussiennes De plus, la statistique se calcule facilement, měme en haute dimension L'auteur montre par simulation que son test se comporte bien par rapport a celui fonde sur la moyenne globale Il en illustre l'emploi au moyen de donnees reelles

Statistical Analysis of Value-of-Life Estimates Using Hedonic Wage Method

Abstract: This research analyses the variability of value-of-life estimates. We find evidence that this variability may in large part be explained by differences in the methodologies used to estimate the value of life. Income elasticity for the value of life is found to be in the 1.07 to 1.72 interval, a result similar to that obtained by Miller (2000) and de Blaeij et al. (2000). We also analyze the relationship between the value of life and the initial probability of a fatal accident, often used in the literature as a proxy for the variation in the probability of death. We show that although the willingness to pay may increase with the probability of death, the value of life will decrease with this probability if the initial probability is less than one half. We draw conclusive evidence of such a relationship from a sample of 38 value-of-life estimates based on the hedonic-wage method.

Economic effects and spin-offs in a small space economy: the case of Canada.

Abstract: Canada, through a well-focused space program (telecommunications, earth observation, robotics), has succeeded in developing a space industry largely based on SMEs. The result has been significant economic benefits and technological spin-offs. In this article, the results of two programs, the ESA (European Space Agency) and the STEAR (Strategic Technologies in Automation and Robotics), are compared. The ESA program has generated significant indirect effects and spin-offs for Canadian exports. ESA's reputation and network have enabled SMEs to increase export sales of both space products and other commercial products derived from space technologies. The STEAR program has been highly successful in promoting a new generation of SMEs for space robotics, encouraging both spin-in and spin-offs of technologies. The analysis highlights the complementarity of mission- and diffusion-oriented programs in the technology transfer process.

The CG Formalism as an Ontolingua for Web-Oriented Representation Languages

Abstract: The semantic Web entails the standardization of representation mechanisms so that the knowledge contained in a Web document can be retrieved and processed on a semantic level. RDF seems to be the emerging encoding scheme for that purpose. However, there are many different sorts of documents on theWeb that do not use RDF as their primary coding scheme. It is expected that many one-to-one mappings between pairs of document representation formalisms will eventually arise. This would create a situation where a young standard such as RDF would generate update problems for all these mappings as it evolves, which is inevitable. Rather, we advocate the use of a common Ontolingua for all these encoding formalisms. Though there may be many knowledge representation formalisms suited for that task, we advocate the use of the conceptual graph formalism.

Habit Formation and the Persistence of Monetary Shocks

Abstract: This paper studies the persistent effects of monetary shocks on output. Previous empirical literature documents this persistence, but standard general equilibrium models with sticky prices fail to generate output responses beyond the duration of nominal contracts. This paper constructs and estimates a general equilibrium model with price rigidities, habit formation, and costly capital adjustment. The model is estimated via Maximum Likelihood using US data on output, the real money stock, and the nominal interest rate. Econometric results suggest that habit formation and adjustment costs to capital play an important role in explaining the output effects of monetary policy. In particular, impulse response analysis indicates that the model generates persistent, hump-shaped output responses to monetary shocks.

Has monetary policy become less powerful

Abstract: Recent vector autoregression (VAR) studies have shown that monetary policy shocks have had a reduced effect on the economy since the beginning of the 1980s. This paper investigates the causes of this change. First, we estimate an identified VAR over the pre- and post-1980 periods, and corroborate the existing results suggesting a stronger systematic response of monetary policy to the economy in the later period. Second, we present and estimate a fully specified model that replicates well the dynamic response of output, inflation, and the federal funds rate to monetary policy shocks in both periods. Using the estimated structural model, we perform counterfactual experiments to quantify the relative importance of changes in monetary policy and changes in the private sector in explaining the reduced effect of monetary policy shocks. The main finding is that changes in the systematic elements of monetary policy are consistent with a more stabilizing monetary policy in the post-1980 period and largely account for the reduced effect of unexpected exogenous interest rate shocks. Consequently, there is little evidence that monetary policy has become less powerful.

Les qualités psychométriques du PSA-A

Abstract: Cette etude a pour objectif de valider la version abregee du Profil socio-affectif ou PSA-A (LaFreniere et al, 1992), questionnaire concu pour evaluer tant la competence que les inadaptations sociales chez les enfants d'âge prescolaire Les 1 145 enfants qui composent l'echantillon (569 filles et 576 garcons d'âge prescolaire) ont ete evalues a l'aide du PSA-A et 412 d'entre eux (218 filles et 194 garcons) ont en outre ete evalues a l'aide d'instruments de mesure cognitive (Lollipop et WPSSI-R) De plus, le rendement scolaire de 181 de ces enfants a ete evalue a la fin de la premiere annee Les resultats indiquent que le PSA-A est homogene et stable dans le temps et qu'il presente une bonne validite de construit

Habit Formation and the Persistence of Monetary Shocks

Abstract: This paper studies the persistent effects of monetary shocks on output. Previous empirical literature documents this persistence, but standard general equilibrium models with sticky prices fail to generate output responses beyond the duration of nominal contracts. This paper constructs and estimates a general equilibrium model with price rigidities, habit formation, and costly capital adjustment. The model is estimated via Maximum Likelihood using US data on output, the real money stock, and the nominal interest rate. Econometric results suggest that habit formation and adjustment costs to capital play an important role in explaining the output effects of monetary policy. In particular, impulse response analysis indicates that the model generates persistent, hump-shaped output responses to monetary shocks.

A Firm's-Eye View of Commercial Policy and Fiscal Reforms in Cameroon

Abstract: After decades of high trade restrictions, fiscal distortions, and currency overvaluation, Cameroon implemented important commercial and fiscal policy reforms in 1994. Almost simultaneously, a major devaluation cut the international price of Cameroon's currency in half. This article examines the effects of those reforms on the incentive structure faced by manufacturing firms. Did the reforms create a coherent new set of signals? Did they reduce dispersion in tax burdens? Was the net effect to stimulate the production of tradable goods? The results of applying a cost function decomposition to detailed firm-level panel data suggest that the reforms created clear new signals for manufacturers, as effective protection rates fell by 80 to 120 percentage points. In contrast, neither the tax reforms nor the devaluation had a major systematic effect on profit margins. The devaluation did shift relative prices dramatically in favor of exportable goods, causing exporters to grow relatively rapidly.