The calculation of shadow prices for industrial wastes using distance functions: An analysis for Spanish ceramic pavements firms
Article Abstract:
This paper deals with the calculation of shadow prices for two industrial wastes generated on their production processes by 18 firms belonging to the Spanish ceramic pavements industry. These prices are then used to calculate an extended productivity index which takes into consideration wastes going with the production of marketable goods. We follow the methodological approach first proposed by Fare et al. (The Review of Economics and Statistics 75 (1993)). A negative correlation is found between absolute shadow prices and wastes production intensity, reflecting a greater marginal cost of eliminating wastes for those firms using less contaminant production processes. Differences between a conventional labour productivity index and an extended productivity index are also statistically related to firms characteristics such as size, previous investments in cleaner technologies and affiliation to a Technological Institute. Keywords: Shadow prices; Distance functions; Ceramic pavements industry; Environment; Productivity
Publication Name: International Journal of Production Economics
Subject: Engineering and manufacturing industries
ISSN: 0925-5273
Year: 2001
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A two-echelon inventory model with lost sales
Article Abstract:
Almost all multi-echelon inventory models assume that demand not satisfied immediately can be back ordered. In some situations this assumption may not be realistic. For example, it may be more representative to model stockouts as lost sales when the retailers are in a competitive market and customers can easily turn to another firm when purchasing the good. Assuming lost sales at the retailers, we consider a one warehouse several retailers inventory system. Using the well-known METRIC-approximation as a framework, we present a heuristic for finding cost effective base-stock policies. In a numerical study we find that the cost of the policies suggested by the heuristic is on average 0.40% above the cost of the optimal (S - 1, S) policy. Keywords: Inventory; Multi-echelon; Lost sales; METRIC
Publication Name: International Journal of Production Economics
Subject: Engineering and manufacturing industries
ISSN: 0925-5273
Year: 2001
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