To improve meat quality and consistency, cattle feeders have moved towards implementing end-point marketing strategies (EPM) based on visual estimates of physiological characteristics. A commonly used 0.5 inch backfat target was used in this analysis. Recognizing that physiological targets will not necessarily result in profit maximization; this research developed a profit maximization rule (PMR) that accounts for the dynamics of animal growth, output prices and costs. A natural field experiment was conducted in Iowa to evaluate the potential for the PMR. One hundred twenty three fed cattle were randomly assigned into two treatments (PMR and EPM). Realized profit results indicate that EPM outperformed the PMR methodology by $24.35 per head. However, simulations that relax some experimental constraints resulted in the PMR outperforming EPM by $102.06 per head. Interestingly, the PMR did not negatively affect carcass quality. Therefore, relaxing PMR constraints in future experimental studies is expected to improve realized profitability.

Doctor of Philosophy / Department of Agricultural Economics / Vincent R. Amanor-Boadu / This dissertation is composed of two essays in applied microeconomics. Using farm level data, the first essay applied nonparametric methods to test the adherence of individual farm’s production choices to profit maximization objective. Results indicate that none of the farms consistently satisfy the joint hypothesis of profit maximization. The study took into account the uncertainty prevalent in agricultural production by systematically modeling the optimization behavior of farms. Departures of observed data of individual farms from profit maximization objectives were attributed more due to stochastic influences caused by output production decisions than input use decisions. Results also support the existence of technological progress during the study period for Kansas farms. At an alpha level of 5%, assuming both input and output quantities as stochastic, only 5.3% of the farms violated the joint hypothesis of profit maximization with standard error exceeding 10%. Whereas when only input quantities are considered stochastic, a total of 71.73% and 2.09% of the farms had minimum standard errors of greater than 10% and 20% respectively required for the joint profit maximization hypothesis to hold. When only output quantity measurements were assumed as stochastic, a total of 80.10 % and 18.84 % of the farms had minimum standard errors of greater than 10% and 20% respectively required for the profit maximization hypothesis to hold. The second essay examines the demand for alcoholic beverages (beer, wine and distilled spirits) for the U.S. using time series data from 1979-2006. The estimation is done using an error correction form of the Almost Ideal Demand System . Results indicate that there is a significant difference between short run and long run elasticity estimates. The paper addresses the exogeneity of log of prices and log of real expenditures. For the beer and wine equations, the hypothesis of joint exogeneity of price index and real expenditure cannot be rejected at all the conventional levels of significance. For the spirits equation, the tests strongly reject the simultaneous exogeneity of price index and real expenditure. When independently tested, price index appears to be endogenous variable where as real expenditure seems exogenous variable. Based on these results, the real expenditure was considered as an exogenous variable, where as the price index for spirits as an endogenous variable.

Este estudo teve como objetivo principal desenvolver um modelo de mensuração do desempenho financeiro e econômico para empresas em rede. A justificativa para tal desenvolvimento foi, justamente, uma lacuna verificada nos textos de organização industrial, nova economia institucional e modelos de mensuração do desempenho de empresas e cadeias de suprimentos. Estas pesquisas, até o momento, não enfatizaram, diretamente, questões de cunho financeiro: faltou discutir a dinâmica da variável dinheiro nos modelos. Seguindo este argumento, foi desenvolvido um modelo matemático para otimização do lucro e do EVA (Economic Value Added) levando-se em consideração, além do custo e receita operacional, os custos e receitas financeiras, o tipo de cadeia que a empresa está inserida (atividade), o tipo de estrutura de governança (mercado, rede ou hierarquia) adotado e o seu segmento (elo) de atuação dentro da cadeia. Para validar o modelo, foram coletados dados contábeis de 109 empresas do agronegócio brasileiro, entre os exercícios de 2001 a 2005. Aplicou-se um teste MANOVA (ANOVA Multivariado) para verificar a interferência dos fatores (segmento, cadeia, estrutura e constituição jurídica) sobre a variação dos valores dos indicadores de desempenho financeiro (margem bruta, relação entre exigível de longo prazo sobre patrimônio líquido, retorno sobre ativos e sobre o patrimônio líquido e ciclo de caixa) e econômico (EVA). Pelos resultados, pode-se concluir que todos os fatores apresentaram interferência significativa na variação dos indicadores financeiros e somente o fator segmento interferiu no EVA das empresas. / The aim of this study was to develop an economic and financial performance measurement model for companies in network, since there is a gap in the literature texts of industrial organization, new institutional economy and models of performance measurements of companies and supply chains. In the related literature, these researches did not emphasize the questions related to financial matter, in a direct way, since there is a lack of discussion concerning to the dynamics of the \"money\" in the models. Therefore, a mathematical model was developed with the purpose of maximization of the profit and EVA (Economic Value Added) with emphasis in the financial cost and financial incomes. Moreover, the kind of the company\'s supply chain (business), governance\'s form (market, network or hierarchy) and its segment (actor) in the supply chain was studied. For this purpose, 109 Brazilian agribusiness companies had their accounting and financial data collected, during the period of 2001 and 2005. The statistical test MANOVA was used to detect the interference of the factors (segment, network, governance and legal nature) regarding the economic (EVA) and financial performance drivers range (gross margin, long term liability/net assets, return on assets (ROA) and return on net assets). Within the limits of the present study, we may conclude that all the factors provide significant (a<=0.05) interference in the range of the financial performance drivers. In addition, regarding to the economic performance, the segment was the factor that presented significant differences (a<=0.05), affecting the EVA of the companies.

With increasing demand of electric power in the context of deregulated electricity markets, a good strategic planning for the growth of the power system is critical for our tomorrow. There is a need to build new resources in the form of generation plants and transmission lines while considering the effects of these new resources on power system operations, market economics and the long-term dynamics of the economy. In deregulation, the exercise of generation planning has undergone a paradigm shift. The first stage of generation planning is now undertaken by the individual investors. These investors see investments in generation capacity as an increasing business opportunity because of the increasing market prices. Therefore, the main objective of such a planning exercise, carried out by individual investors, is typically that of long-term profit maximization. This thesis presents some modeling frameworks for generation capacity expansion planning applicable to independent investor firms in the context of power industry deregulation. These modeling frameworks include various technical and financing issues within the process of power system planning. The proposed modeling frameworks consider the long-term decision making process of investor firms, the discrete nature of generation capacity addition and incorporates transmission network modeling. Studies have been carried out to examine the impact of the optimal investment plans on transmission network loadings in the long-run by integrating the generation capacity expansion planning framework within a modified IEEE 30-bus transmission system network. The work assesses the importance of arriving at an optimal IRR at which the firm’s profit maximization objective attains an extremum value. The mathematical model is further improved to incorporate binary variables while considering discrete unit sizes, and subsequently to include the detailed transmission network representation. The proposed models are novel in the sense that the planning horizon is split into plan sub-periods so as to minimize the overall risks associated with long-term plan models, particularly in the context of deregulation.

With increasing demand of electric power in the context of deregulated electricity markets, a good strategic planning for the growth of the power system is critical for our tomorrow. There is a need to build new resources in the form of generation plants and transmission lines while considering the effects of these new resources on power system operations, market economics and the long-term dynamics of the economy. In deregulation, the exercise of generation planning has undergone a paradigm shift. The first stage of generation planning is now undertaken by the individual investors. These investors see investments in generation capacity as an increasing business opportunity because of the increasing market prices. Therefore, the main objective of such a planning exercise, carried out by individual investors, is typically that of long-term profit maximization. This thesis presents some modeling frameworks for generation capacity expansion planning applicable to independent investor firms in the context of power industry deregulation. These modeling frameworks include various technical and financing issues within the process of power system planning. The proposed modeling frameworks consider the long-term decision making process of investor firms, the discrete nature of generation capacity addition and incorporates transmission network modeling. Studies have been carried out to examine the impact of the optimal investment plans on transmission network loadings in the long-run by integrating the generation capacity expansion planning framework within a modified IEEE 30-bus transmission system network. The work assesses the importance of arriving at an optimal IRR at which the firm’s profit maximization objective attains an extremum value. The mathematical model is further improved to incorporate binary variables while considering discrete unit sizes, and subsequently to include the detailed transmission network representation. The proposed models are novel in the sense that the planning horizon is split into plan sub-periods so as to minimize the overall risks associated with long-term plan models, particularly in the context of deregulation.

Practical inventory settings often include multiple generations of the same product on hand. New products often arrive before old stock is exhausted, but most inventory models do not account for this. Such a setting gives rise to the possibility of inter-generational substitution between products. We study a retailer that stocks two product generations and we show that from a cost perspective the retailer is better off stocking only one generation. We proceed with a profit scheme and develop a price-setting profit maximization model, proving that in one and two generation profit models there exists a unique solution. We use the profit model to show that there are cases where it is more profitable to stock two generations. We discuss utility and preference extensions to the profit model and present the general n-product case.

This paper’s aim is to discover the impact of economical, demographic and traditional determinants on clubs’ on-pitch success in UEFA Champions League. Generally it is assumed by people that financially strong clubs tend to win on the pitch most of the time. Is it really true? Is it always the same wealthy teams which win in the end? Football is a type of entertainment and people would like to see games with uncertain outcomes and a balanced competitiveness between two sides. In this way they can enjoy this entertainment. In that case, how uncertain is the outcome and how balanced is the competition in UEFA Champions League? In order to answer all these questions a multiple regression analysis is built including economic, demographic and traditional variables both at club and country level. These mentioned explanatory variables are GDP per capita of the home country, population of the host city, total market value of the team’s players, capacity of the stadium, country’s participation in international tournaments, club’s age, rank of the next best team from the same country and country’s hosting an international tournament. It turned out that financially advantageous clubs which have stadiums with larger capacities and located in more populated cities have more chances of winning than the others. Then again, it is observed that countries’ football tradition and dedication does not have a significant impact on clubs’ on-pitch success in UEFA Champions League.

Practical inventory settings often include multiple generations of the same product on hand. New products often arrive before old stock is exhausted, but most inventory models do not account for this. Such a setting gives rise to the possibility of inter-generational substitution between products. We study a retailer that stocks two product generations and we show that from a cost perspective the retailer is better off stocking only one generation. We proceed with a profit scheme and develop a price-setting profit maximization model, proving that in one and two generation profit models there exists a unique solution. We use the profit model to show that there are cases where it is more profitable to stock two generations. We discuss utility and preference extensions to the profit model and present the general n-product case.

Este estudo teve como objetivo principal desenvolver um modelo de mensuração do desempenho financeiro e econômico para empresas em rede. A justificativa para tal desenvolvimento foi, justamente, uma lacuna verificada nos textos de organização industrial, nova economia institucional e modelos de mensuração do desempenho de empresas e cadeias de suprimentos. Estas pesquisas, até o momento, não enfatizaram, diretamente, questões de cunho financeiro: faltou discutir a dinâmica da variável dinheiro nos modelos. Seguindo este argumento, foi desenvolvido um modelo matemático para otimização do lucro e do EVA (Economic Value Added) levando-se em consideração, além do custo e receita operacional, os custos e receitas financeiras, o tipo de cadeia que a empresa está inserida (atividade), o tipo de estrutura de governança (mercado, rede ou hierarquia) adotado e o seu segmento (elo) de atuação dentro da cadeia. Para validar o modelo, foram coletados dados contábeis de 109 empresas do agronegócio brasileiro, entre os exercícios de 2001 a 2005. Aplicou-se um teste MANOVA (ANOVA Multivariado) para verificar a interferência dos fatores (segmento, cadeia, estrutura e constituição jurídica) sobre a variação dos valores dos indicadores de desempenho financeiro (margem bruta, relação entre exigível de longo prazo sobre patrimônio líquido, retorno sobre ativos e sobre o patrimônio líquido e ciclo de caixa) e econômico (EVA). Pelos resultados, pode-se concluir que todos os fatores apresentaram interferência significativa na variação dos indicadores financeiros e somente o fator segmento interferiu no EVA das empresas. / The aim of this study was to develop an economic and financial performance measurement model for companies in network, since there is a gap in the literature texts of industrial organization, new institutional economy and models of performance measurements of companies and supply chains. In the related literature, these researches did not emphasize the questions related to financial matter, in a direct way, since there is a lack of discussion concerning to the dynamics of the \"money\" in the models. Therefore, a mathematical model was developed with the purpose of maximization of the profit and EVA (Economic Value Added) with emphasis in the financial cost and financial incomes. Moreover, the kind of the company\'s supply chain (business), governance\'s form (market, network or hierarchy) and its segment (actor) in the supply chain was studied. For this purpose, 109 Brazilian agribusiness companies had their accounting and financial data collected, during the period of 2001 and 2005. The statistical test MANOVA was used to detect the interference of the factors (segment, network, governance and legal nature) regarding the economic (EVA) and financial performance drivers range (gross margin, long term liability/net assets, return on assets (ROA) and return on net assets). Within the limits of the present study, we may conclude that all the factors provide significant (a<=0.05) interference in the range of the financial performance drivers. In addition, regarding to the economic performance, the segment was the factor that presented significant differences (a<=0.05), affecting the EVA of the companies.

Companies are faced with challenges constraining the achievement of set budgets, goals, profit and cost of product, to name a few, on a daily basis. These challenges influence value creation and sustainable value creation. Value-based management is an integrated management tool which may assist in achieving sustainable value creation within a company. Achieving sustainable value creation will result in benefits for both the shareholders and the various stakeholders. In 2008 and 2009 Eskom, South Africa’s sole electricity provider announced a major shortage of electricity and consequently major price increases. Since electricity consumption is a crucial part of the production process, this announcement had a devastating effect on mining companies. The primary objective of the current study is to investigate whether a local mining company is focusing on applicable endeavours to overcome the electricity constraint and price hikes in order to sustain value creation. This was done by studying the company’s financial & management reports, public announcements and media coverage, in conjunction with a quantitative study, collecting primary data by using standardised questionnaires distributed among the mining company’s employees. The results from this study indicate that the selected company is focusing on relevant projects to overcome the electricity constraints. Further, the conclusion made from the results of the questionnaires shows that the higher staff levels are more informed and aware of value-based management. It also points out that the lower levels and employees from the production and mining departments are less informed and aware of value-based management. / Thesis (MBA)--North-West University, Potchefstroom Campus, 2012