Showing papers on "Capacity utilization published in 2015"

State-dependent effects of fiscal policy

Abstract: We investigate the effects of government spending on US output with a threshold structural vector autoregressive model. We consider Bayesian model comparison and generalized impulse response analysis to test for nonlinearities in the responses of output to government spending. Our empirical findings support state-dependent effects of fiscal policy, with the government spending multiplier larger and more persistent whenever there is considerable economic slack. Based on capacity utilization as the preferred threshold variable, the estimated multiplier is large (1.6) for a low-utilization regime that accounts for more than half of the sample observations from 1967 to 2012 according to the estimated threshold level.

Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry

Abstract: We explore how changes in ownership affect the productivity and profitability of producers. Using detailed data from the Japanese cotton spinning industry at the turn of the last century, we find that acquired firms’ production facilities were not on average less physically productive than the plants of the acquiring firms before acquisition. They were much less profitable, however, due to higher inventory levels and lower capacity utilization—differences that reflected problems in managing the uncertainties of demand. After acquisitions, less profitable acquired plants saw drops in inventories and gains in capacity utilization that raised both their productivity and profitability levels. (JEL D24, G32, G34, L11, L25, L66, N65) The influence of changes in corporate control of assets on productivity has been a focus of theoretical and empirical research for some time. In principle, mergers and acquisitions can reallocate control of productive assets to entities that are able to apply them more efficiently. Besides increasing the productivity of the individual production units that are merged or acquired, a broader process of such reallocations can also lead to aggregate productivity growth. Such a mechanism therefore has the potential to explain patterns of productivity at both the micro- and macro-levels. Implicit in the story of this mechanism—though not often treated explicitly in the empirical work on the subject—is the notion that productivity growth occurs when changes in ownership and control put assets in more able managers’ hands. 1

Combined effects of capacity and time on fares: insights from the yield management of a low-cost airline

Abstract: Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-based theories predict, it emerges that fares monotonically and substantially increase with flight occupancy. After controlling for capacity utilization, our analysis also supports time-based theories, indicating a U-shaped temporal profile over a two-month booking period, as well as a sharp increase in fares in the two weeks prior to departure.

A system-of-equations two-stage DEA approach for explaining capacity utilization and technical efficiency

Abstract: In this paper we develop a system-of-equations two-stage approach to explain the simultaneous effect of a number of contextual variables on technical efficiency and capacity utilization, which were derived using Johansen measure of capacity utilization and DEA. The model is applied to a sample of public hospitals in Greece and provides estimates of capacity utilization and optimal input usage. Our results indicate that the sample hospitals operated with excess capacity and by underutilizing doctors and nursing personnel. We also found some variation in capacity and variable input utilization across urban and non-urban hospitals. The results from the second stage SUR system of equations show that hospital size and location have a positive effect on hospital capacity utilization while the average length of stay a negative one.

Ownership Structure and Firm Performance in the Egyptian Manufacturing Sector

Abstract: We use the World Bank enterprise survey for the Egyptian manufacturing sector to study the correlation between the ownership structure (private vs. public, Egyptian vs. Arab foreign vs. non-Arab foreign) and firm performance, which we measure as sales per worker, capacity utilization, and net profit rate. Our main findings indicate that (1) productivity differences between Egyptian private and public firms are not significant, but firms with public ownership have a lower capacity utilization and a lower net profit rate than private firms, (2) firms with private Arab and private non-Arab foreign ownership are significantly more productive and have a higher capacity utilization than purely Egyptian owned firms, and (3) differences between Arab and non-Arab foreign ownership are not significant for productivity and capacity utilization, but firms with non-Arab foreign ownership have a higher net profit rate than firms with Arab foreign or Egyptian owners.

Aggregating electric cars to sustainable virtual power plants: the value of flexibility in future electricity markets

Abstract: Electric vehicles will play a crucial role in balancing the future electrical grid, which is complicated by many intermittent renewable energy. We developed an algorithm that determines for a fleet of electric vehicles, which EV at what price and location to commit to the operating reserve market to either absorb excess capacity or provide electricity during shortages (vehicle-2-grid). The algorithm takes the value of immobility into account by using carsharing fees as a reference point. A virtual power plant autonomously replaces cars that are committed to the operating reserves and are then rented out, with other idle cars to pool the risks of uncertainty. We validate our model with data from a free float car-sharing fleet of 500 electric vehicles. An analysis of expected future developments (2015, 2018, and 2022) in operating reserve demand and battery costs yields that the gross profits for a carsharing operator increase between 7-12% with a negligible decrease in car availability (<0.01%).

Capacitated qualification management in semiconductor manufacturing

Abstract: In semiconductor manufacturing, machines are usually qualified to process a limited number of recipes related to products It is possible to qualify recipes on machines to better balance the workload on machines in a given toolset However, all machines of a toolset do not have equal uptimes and may further suffer from scheduled and unscheduled downtimes This may heavily impact an efficient recipe-to-machine qualification configuration In this paper, we propose indicators for recipe-to-machine qualification management based on the overall toolset workload balance under capacity constraints The models, deployed in industry, demonstrate that the toolset capacity must be considered while managing qualifications Industrial experiments show how capacity consideration leads to an optimal qualification configuration and therefore capacity utilization

Public health capacity in the provision of health care services

Abstract: In this paper, we assess the capacity of Florida's public health departments. We achieve this by using bootstrapped data envelopment analysis (DEA) applied to Johansen's definition of capacity utilization. Our purpose in this paper is to measure if there is, theoretically, enough excess capacity available to handle a possible surge in the demand for primary care services especially after the implementation of the Affordable Care Act that includes provisions for expanded public health services. We measure subunit service availability using a comprehensive data source available for all 67 county health departments in the provision of diagnostic care and primary health care. In this research we aim to address two related research questions. First, we structure our analysis so as to fix budgets. This is based on the assumption that State spending on social and health services could be limited, but patient needs are not. Our second research question is that, given the dearth of primary care providers in Florida if budgets are allowed to vary is there enough medical labor to provide care to clients. Using a non-parametric approach, we also apply bootstrapping to the concept of plant capacity which adds to the productivity research. To preview our findings, we report that there exists excess plant capacity for patient treatment and care, but question whether resources may be better suited for more traditional types of public health services.

Production Factor Returns: The Role of Factor Utilization

Abstract: Short-term increasing returns to production factors are usually found in empirical studies. We argue they can be due to omitted variables, particularly the intensity of factor utilization. Thanks to original French firm-level data (1992–2008), we show how increasing returns to scale disappear when working time, capacity utilization rate, and, particularly, capital operating time are introduced in the production function.

Demand uncertainty and hospital costs: an application to Portuguese public hospitals.

Abstract: In this paper, we evaluate the effect of demand uncertainty on hospital costs. Since hospital managers want to minimize the probability of not having enough capacity to satisfy demand, and since demand is uncertain, hospitals have to build excess capacity and incur the associated costs. Using panel data comprising information for 43 Portuguese public hospitals for the period 2007–2009, we estimate a translog cost function that relates total variable costs to the usual variables (outputs, the price of inputs, some of the hospitals’ organizational characteristics) and an additional term measuring the excess capacity related to the uncertainty of demand. Demand uncertainty is measured as the difference between actual and projected demand for emergency services. Our results indicate that the cost function term associated with the uncertainty of demand is significant, which means that cost functions that do not include this type of term may be misspecified. For most of our sample, hospitals that face higher demand uncertainty have higher excess capacity and higher costs. Furthermore, we identify economies of scale in hospital costs, at least for smaller hospitals, suggesting that a policy of merging smaller hospitals would contribute to reducing hospital costs.

Quantifying the Potential Impacts of Flexibility Reserve on Power System Operations

Abstract: Power system operators schedule additional capacity above or below the amount required to meet the expected demand at any time interval to ensure reliable operation. This excess capacity is known as operating reserve. This reserve helps protect against the inherent variability and uncertainty found in the system. As more variable generation resources are connected to the system, the amount of variability and uncertainty is expected to increase. To hedge against this, new operating strategies are being explored. These strategies include developing additional ancillary services and modifying scheduling strategies. This paper presents the results of simulating an additional operating reserve product, referred to as "flexibility reserve," on the IEEE 118-bus test system, and it presents the operational implications on costs, reliability, and pricing that this additional operating reserve may produce.

Evaluation of Investment in Modern Manufacturing Equipment Using Discrete Event Simulation

Abstract: Decisions to invest in manufacturing systems represent a strategic decision making process affecting long-term success, competitiveness and profitability of a company. The paper deals with a comprehensive analysis of the benefits generated by actual investment in modern manufacturing equipment covering all relevant effects related to the investment, including cost savings, reduced production lead times, decreased level of work in progress, balanced equipment capacity utilization, and improved product quality. Comparison of the existing method of manufacturing with the newly proposed investment in flexible manufacturing equipment is designed for a defined product mix, product demand and product flow using dynamic discrete simulation. A simulation model is primarily used to estimate the operating characteristics, such as idle time, capacity utilization, lead times and productivity. The evaluation of operating parameters of the new manufacturing equipment is subsequently completed by the assessment of its financial impacts.

Factors Affecting Preconditioned Calf Price Premiums: Does Potential Buyer Competition and Seller Reputation Matter?

Abstract: Feeder-calf prices are determined by the interaction of many factors. This study uses transaction data from Iowa preconditioned and regular feeder-calf auction sales to quantify the impact of a wide variety of factors, several of which have not been used in previous studies on feeder-calf prices. Notably, market premiums for preconditioned sales versus regular sales, feedlot capacity utilization, and seller reputation are found to be significant factors affecting feeder-calf prices. Estimated coefficients are then used to predict prices to demonstrate how this information can be used in making management and marketing decisions.

Sold electricity quantity prediction method based on inventory capacities and business expansion characteristics

Abstract: The invention discloses a sold electricity quantity prediction method based on inventory capacities and business expansion characteristics. The method includes the steps that inventory capacity extraction is conducted according to the procedures of fuzzy extraction, business expansion mining clustering and fine calibration; the quantity of electricity generated by inventory loads is predicted by means of corrected inventory capacities; business expansion capacity utilization characteristics are extracted on the basis of a data statistics and data mining business expansion user electricity utilization growth curve, and the quantity of electricity generated by business expansion capacities of the ensuing year is predicted by means of the business expansion capacity utilization characteristics; the predicted value of the electricity quantity of the ensuing year can be obtained by adding the obtained quantity of the electricity generated by the inventory loads and the predicted quantity of the electricity generated by the business expansion capacities of the ensuing year. According to the method, starting from a power utilization source, capacity utilization characteristics and business expansion characteristics of different members of a selling market are extracted, internal reason and external driving factors of electricity selling market electricity quantity development and change are disclosed for dealing with the current economic situation which changes complicatedly, and scientific judgment bases are provided for the future electricity selling market development trend.

Cost- and Price Dynamics of Solar PV Modules

Abstract: This paper develops a model framework and a corresponding empirical inference procedure for estimating long-run marginal cost in industries where production costs decline over time. In the context of the solar photovoltaic module industry, we rely on firm-level financial accounting data to estimate the long-run marginal cost of PV modules for the years 2008 -2013. During those years, the industry experienced both sharp price declines and significant expansions of manufacturing capacity. By comparing the trajectory of average sales prices with the long-run marginal cost estimates, we are in a position to quantify the extent to which actual price declines were attributable to excess capacity as opposed to reductions in production costs. While we find a significant effect attributable to excess capacity for some quarters in our sample period, the dynamics of this industry also points to a rate of cost reductions that is even faster than the 80% learning curve which has described the trajectory of average sales prices over the past three decades.

Strategic Investment in Merchant Transmission: The Impact of Capacity Utilization Rules

Abstract: In this paper we look at the relative merits of two capacity utilization regimes in the merchant electricity transmission network: Must offer (Mo) where the entire capacity installed is made available for transmission and Non Must Offer (NMo) where some capacity could be withheld. We look at two specific cases: (i) Demand for transmission varies across time, and (ii) Vertical integration is allowed between investors in transmission network and electricity generators. In the case of time-varying demand under Mo, we find that a monopolist may underinvest in transmission when compared to NMo, although NMo may lead to more capacity withholding. In the case of vertical integration, we find that when the market power is with the generators of the exporting node, without vertical integration no welfare-enhancing merchant investment would occur. Further, if the generators in the importing node have market power, which of the two regimes is welfare enhancing depends on the parameter values. In case vertical integration is better, then Mo is better than NMo. Finally, we also argue that the incentive to collude among various transmission network investors is mitigated with Mo in place.

Wind Power and Electricity Markets - A study of wind power capacity, trade and prices on the Nordic electricity market.

Abstract: Global wind power capacity has greatly increased in the last decades and is in certain areas constituting a significant share of generating capacity. This thesis examines wind power production data along with prices and inter-regional trade volumes on the Nordic electricity market Nord Pool Spot to deduce the effects of wind power on the grid. The research focused on Denmark, since it gets a very large fraction of its energy from wind power and keeps excellent energy data available for research. By computing measures of the state of the energy market and looking at the developments of these over time as well as their correlation to wind power capacity, conclusions were drawn on the role of wind power in the electricity market. It was found that investments in wind power capacity had not experienced decreasing marginal returns but that wind power had reduced the capacity utilization of conventional Danish power plants. Wind energy was found to be sold on average at 10 % lower prices than conventional energy and Danish prices were found to have increased relative to Norwegian prices, although causation in wind power expansion could not be proven. Spot price standard deviation did not increase notably during the time span examined. As wind power capacity increased, wind power production became an increasingly accurate predictor of electricity export and Danish trade balance did worsen, although not in a statistically significant manner. Neither transmission capacity nor profits made by operators of transmission cables increased during the period. Subsidies were found have expanded rapidly during the 21st century and were shown to be good predictors of wind power capacity expansion, with a lag of 1-2 years. Around 20 % of Danish wind power subsidies were exported during the period studied. The thesis concludes that the Nordic electricity market has incorporated large volumes of intermittent power capacity without any radical effects on trade or prices, plausibly due to large hydro-electric capacity, and with a likely decrease in CO2 emissions.

Capacity Utilization and Productivity Analysis in the Canadian Food Manufacturing Industry

Abstract: CAPACITY UTILIZATION AND PRODUCTIVITY ANALYSIS IN THE CANADIAN FOOD MANUFACTURING INDUSTRY Zili Lai Advisor: University of Guelph, 2015 Prof. Getu Hailu Food processing is Canada’s largest manufacturing employer, accounting for 236,000 jobs and the second largest manufacturing industry overall by revenue. However, the industry has recently experienced a considerable number of plant restructurings and a diminishing national trade surplus in processed food. The purpose of this study is to measure capacity utilization and multifactor productivity in order to examine the contribution of capacity utilization to change in productivity in the Canadian food manufacturing industry. I use data envelopment analysis and the Malmquist productivity index to measure capacity utilization and multifactor productivity in food manufacturing industry over the period 1990-2012 at provincial level. The results show every province (except Newfoundland) experienced a slowdown in multifactor productivity growth since 2000, the extent of which varies considerably by province. Capacity under-utilization is one important reason for Atlantic and Prairie Provinces’ productivity growth slowdown.

Production Factor Returns: The Role of Factor Utilization

Abstract: Short-term increasing returns to production factors are usually found in empirical studies. We argue they can be due to omitted variables, particularly the intensity of factor utilization. Thanks to original French firm-level data (1992–2008), we show how increasing returns to scale disappear when working time, capacity utilization rate, and, particularly, capital operating time are introduced in the production function.

Entrepreneurship, Employment and Sustainable Development in Nigeria

Abstract: This paper investigated the potency of entrepreneurship to generate employment, thus, underscoring the quintessence, significance and relevance of this sub-sector in the sustainable development of any given economy. The objective of the paper is to examine entrepreneurship, employment and sustainable development nexus in Nigeria. Data sourced from Central Bank statistical Bulletin, National Bureau of statistics, World Development Indicators and CIA Fact Sheet and other institutional publications to provide empirical basis for the study spanned from 1980-2013. The methodology adopted in this research is the use of co integration and Vector Error Correction Mechanism (VECM) which established the long-run and short-run estimates of the parameters. On the long-run estimates, employment (LEMPL) and average capacity utilization (LCAP) are found to be statistically significant implying that employment and capacity utilization can be generated through entrepreneurship for sustainable development. Industrial Production index (LINPI) on the other hand is wrongly signed implying that it does not contribute to LHDI (sustainable development) for the period under review. The short-run estimates also show the significance of the parameters in respect to LEMPL and LINPI. The error correction mechanism (ECM) is rightly signed and significant. It shows that the speed of adjustment of the model from short-run distortions to long-run equilibrium is about 12.7%. The diagnostic tests of unit root showed that the variables are integrated of order one, I (1). This means that though individually the variables are non-stationary, a linear combination of the variables was stationary, hence they are co-integrated. Based on the findings the study recommends that if the Nigerian government must revitalize its economy, reduce unemployment progressively, and generate more employment opportunities for sustainable development, a paradigm shift in policy that is critical to effective entrepreneurship development becomes imperative. This can be done through building more capacity utilization and creation of enabling environment for industries to thrive.

Growth without Normal Capacity Utilization and the Meaning of the Long-Run Saving Ratio

Abstract: The ratio of saving to income over a long period is analyzed here in a theoretical context that takes account of the role of aggregate demand in the growth process, and in which it is not assumed that the economy must operate at a normal rate of capacity utilization in the long run. The very notion of the long-run saving rate is therefore redefined with respect to the one found in the literature where normal utilization is assumed. We argue that the long-run saving ratio must be conceived as the result of the interaction of many different influences and can therefore be similar in radically different circumstances and different in similar circumstances with respect both to the incentive to accumulate and to the pattern of saving decisions.

Utilizing unused power budget to increase network capacity in practical PON deployments by introducing flexible modulation

Abstract: The actual use of power budgets in a PON typically varies widely. Utilizing 4-PAM modulation for ONUs that have high power margins can increase network capacity utilization without investing in expensive optics. We demonstrate that the capacity can increase 79%.

Assessing the Significance of Modularizing Contract Manufacturing Organizations

Abstract: Assessing the Significance of Modularizing Contract Manufacturing Organizations