Journal of Modelling in Management

Aviantara, Ryan

2023 Journal of Modelling in Management

doi: 10.1108/jm2-01-2020-0017

PT Garuda Indonesia (GIAA) Persero Tbk is the one only pride airline of Indonesian sovereignty. Although the bird achieved abundant international awards and certifications, the bird is dying and needs a remedy immediately. The frequent annual turnover of board executives did not make impact to the financial performance; this seems to be tip of the iceberg, peculiar with the number of restatement over the past decade. Therefore, this paper aims to address the issue through the function of five red flags model which known as Altman Z-score, Sprigate S-score, Grover G-score, Beneish M-score and Dechow F-score.Design/methodology/approachThis is exploratory study of univariate analysis using financial distress and fraudulent financial statement approach, while the type of data is secondary taken from Indonesia Stock Exchange during 12 years observation from 2007 to 2018.FindingsAltman, Springate and Grover produce strong indication of GIAA’s financial distress; all models score the same distress indication by 14 times. All distress models agreed that only 2011 and 2012 classify to the safe zone when GIAA performed the corporate actions. Beneish scores fraud indication by eight times. Dechow scores slightly higher by nine times. The number of fraud predictions in this research are in line with the number of restatement, which proves the assumption that restatement can be used as a signal of the financial statement fraud. When GIAA categorized in safe zone, both Beneish and Dechow score no to fraud, this indicates the fraud occurence during health period is lower.Research limitations/implicationsThe motivation behind the financial statement fraud is not discuss through this research but from the primary theory of the fraud triangle. Financial distress possesses strong relationship with pressure factor; therefore, exit from financial crisis is one of the best solution to mitigate the financial statement fraud.Practical implicationsThe average of Beneish score is −2,26, slightly above the manipulator threshold which is −2,22. This must be marked as an ample conjecture of GIAA’s fraud inclination and been a highlight for the auditor both internal and external when performing control testing, attestation and other assurance services.Social implicationsAll models in this study can apply to any other corporate issues, especially for evaluating the government company who has loosen the public trust recently in Indonesia such as PT Asuransi Jiwasraya and PT Asabri. Moreover, the pandemic COVID-19 has brought the world to the new unprecedented risk, especially the economic turmoil which lead the possibilities of corporate distress and fraud. By applying these scores, public might have tools as pre-elemenary assessment to serve a decision where to put trust in a company.Originality/valueThis paper reveals a combination from various models of financial distress and financial statement fraud in order to generate the financial solutions named « DDCC » Debt Restructuring, Debt Conversion, Capex Management and Cost Cutting.

K., Jagan Mohan Reddy; A., Neelakanteswara Rao; Lanka, Krishnanand; Gopal, PRC

2023 Journal of Modelling in Management

doi: 10.1108/jm2-06-2020-0168

Pull production systems have received much attention in the supply chain management environment. The number of Kanbans is a key decision variable in the pull production system as it affects the finished goods inventory (FGI) and backorders of the system. The purpose of this study is to compare the performance of the fixed and dynamic Kanban systems in terms of operational metrics (FGI and backorders) under the demand uncertainty.Design/methodology/approachIn this paper, the system dynamics (SD) approach was used to model the performance of fixed and dynamic Kanban based production systems. SD approach has enabled the feedback mechanism and is an appropriate tool to incorporate the dynamic control during the simulation. Initially, a simple Kanban based production system was developed and then compared the performance of production systems with fixed and dynamic controlled Kanbans at the various demand scenarios.FindingsFrom the present study, it is observed that the dynamic Kanban system has advantages over the fixed Kanban system and also observed that the variation in the backorders with respect to the demand uncertainty under the dynamic Kanban system is negligible.Research limitations/implicationsIn a just-in-time production system, the number of Kanbans is a key decision variable. The number of Kanbans is mainly depended on the demand, cycle time, safety stock factor (SSF) and container size. However, this study considered only demand uncertainty to compare the fixed and dynamic Kanban systems. This paper further recommends researchers to consider other control variables which may influence the number of Kanbans such as cycle time, SSF and container size.Originality/valueThis study will be useful to decision-makers and production managers in the selection of the Kanban systems in uncertain demand applications.

Fakhr Mousavi, Seyed Mohamad; Amirteimoori, Alireza; Kordrostami, Sohrab; Vaez-Ghasemi, Mohsen

2023 Journal of Modelling in Management

doi: 10.1108/jm2-09-2020-0228

As returns to scale (RTS) describes the long run connection of the changes of outputs relative to increases in the inputs, the purpose of this study is to answer the following questions: If the proportionate changes exist in the inputs, what is the rate of changes in outputs with respect to the inputs’ variations in the two-stage networks over the long term? How can the authors investigate quantitative RTS in the two-stage networks? In other words, the purpose of this research is to introduce a different approach to estimate the performance, RTS and scale economies (SE) in network structures.Design/methodology/approachThis paper proposes a novel non-radial approach based on data envelopment analysis to analyze the performance and to investigate RTS and SE in two-stage processes.FindingsThe findings show that the range adjusted measure (RAM)/RTS approach can identify reference sets for overall systems and each stage. In addition, the models presented in this paper can classify decision-making units and determine the increasing/decreasing trends of RTS.Originality/valueThe majority of previous RTS studies have been examined in black-box structures and have been discussed in a radial framework. Therefore, in this study, RTS and SE in the two-stage networks are dealt with using an extended RAM approach. Actually, the efficiency and RTS for each stage and the overall model are calculated using the proposed technique.

Tursyngaliyeva, Gulim; Sagindykov, Kakim; Konyrkhanova, Assem; Niyazova, Rozamgul; Sydykova, Ainur

2023 Journal of Modelling in Management

doi: 10.1108/jm2-11-2020-0308

The problem of ethnic conflicts and unrest is at the forefront in a diverse world today. This paper aims to identify ways of resolving social conflicts and establishing a balanced way of taking into account the diverse interests of a multinational society.Design/methodology/approachModeling of dynamical ethnic processes in the Republic of Kazakhstan was based on the Parson's sociological scheme and the Nash equilibrium theory. The model consists of differential equations describing the development of four ethnic subsystems: political system, economic system, societal community and Institute of the Assembly of the People of Kazakhstan. This model allows investigating how the interests of various ethnic groups change over time and identifying the states of equilibrium in which the interests of all groups are satisfied.FindingsThe results of computer simulation showed that one of the solutions to the problem of social stability is establishing social equilibrium. For this, the Institute of the Assembly of the People of Kazakhstan (APK Institute) must take changes that occur within ethnic groups into account. The proposed model can reveal states of equilibrium with respect to positive and negative dynamic processes that exist between different ethnic groups.Originality/valueThe proposed model can be used to predict changes in social behavior and find balance between ethnic subsystems in the research on ethnic processes in multinational countries to early detect conflicts of interest and crisis situations. Future studies will benefit from expanding the range of subsystems that can affect alterations in the ethnic community.

Ross, Guy Moshe

2023 Journal of Modelling in Management

doi: 10.1108/jm2-01-2021-0006

This research aims to test focus of attention effects in risky choice.Design/methodology/approachAs opposed to traditional aspiration-level theory, the shifting-focus concept introduces a second reference point, the survival point, and assumes a shifting focus of attention between the two reference points. In this conceptualization, risk-taking is a function of focus of attention on the survival reference point or the aspiration-level and resources relative to the two reference points. Four randomized controlled studies tested this concept.FindingsStudy 1 showed that with aspiration focus the probability of choosing a risky option was higher below an aspiration-level than above it. With survival focus, the effect was reversed. Study 2 found that close to the survival reference point, the probability of choosing a risky option was higher with aspiration focus relative to survival focus. Study 3 revealed that with scarce resources the risk taken was higher with aspiration focus than with survival focus, and the scarcer the resources the stronger was the effect. Study 4 demonstrated that with aspiration focus the risk taken was higher below an aspiration-level than above it. With survival focus the effect was reversed.Originality/valueIn addition to providing support for the validity of the shifting focus concept, this paper elaborates on the theoretical model by providing evidence for moderation effects. Risk-taking was affected by a focus of attention on one of two reference points, and the effect was moderated by resources relative to the two focal points. An advanced model is proposed to capture the effects of focus of attention and resources on risk-taking behavior.

Fu, Kaifang; Chen, Zhixiang; Sarker, Bhaba R.

2023 Journal of Modelling in Management

doi: 10.1108/jm2-03-2021-0061

The purpose of this paper is to investigate the behavioral operations effect in production inventory decision of supply chain consisting of one manufacturer and one buyer, and analyze how the unfairness concerns impact the decision of production inventory in a supply chain system.Design/methodology/approachFirst, a model without the buyer’s unfairness concern is established; then, advantage unfairness concern and disadvantage unfairness concern behavior of buyer are taken into account in the production inventory system. The authors analyze how advantage unfairness concern and disadvantage unfairness concern impact the optimal decisions and channel coordination.FindingsThe result shows several important conclusions. First, the buyer’s optimal ordering quantity and expected utility show opposing trend when the buyer has advantage unfairness concern. Second, the stronger bargaining power of the manufacturer results in an increasing buyer’s optimal ordering quantity under the advantage unfairness concern case, but decreasing under the disadvantage unfairness concern case. Third, the supply chain production-inventory can be coordinated under advantage unfairness concern case, but cannot be coordinated under disadvantage unfairness concern.Practical implicationsThe study can provide to practitioners with important implications that when the vendor or the buyer in supply chain wants to make the decision of inventory replenishment, taking unfairness concerns into account will lead to different results. Therefore, to effectively improve the operations performance of supply chain, partners of the supply chain should not only care about their own interest, but also need to consider the fairness concern of the other partner, reflecting the cooperation consciousness of supply chain management.Originality/valueThis paper contributes to the new field of creative management–behavioral operations, offering managerial implications for the decision and optimization of supply chain production-inventory problem.

Naghi Beiranvand, Davood; Jamali Firouzabadi, Kamran; Dorniani, Sahar

2023 Journal of Modelling in Management

doi: 10.1108/jm2-01-2021-0010

The main objective of this study is to present a conceptual model of sustainable product service supply chain (SPSSC) performance assessment in the oil and gas industry.Design/methodology/approachBased on an in-depth study of the previous literature, the indicators related to PSSC performance assessment were determined. Then, exploratory factor analysis and confirmatory factor analysis were applied to identify and confirm the sub-criteria and criteria pertaining to the proposed model.FindingsThe obtained results identify ten criteria related to the proposed model as follows: “Environmental performance”, “Customer performance”, “financial performance”, “Information technology Performance”, “Social Performance”, “Risk performance”, “Logistics performance”, “Operational performance”, “Organizational performance” and “performance of innovation and growth”.Research limitations/implicationsAs the present research was conducted in the Iranian context, caution should be taken regarding the generalizability of the obtained results.Originality/valueBased on a set of the identified criteria, this study proposes a conceptual model of the PSSC performance assessment in the oil and gas industry which hopefully could be useful for other organizations in this industry and other organizations in other parts of the world.

Wang, Ziang; Yang, Feng

2023 Journal of Modelling in Management

doi: 10.1108/jm2-07-2021-0163

It has always been a hot topic for online retailers to obtain consumers’ product evaluations from massive online reviews. In the process of online shopping, there is no face-to-face interaction between online retailers and customers. After collecting online reviews left by customers, online retailers are eager to acquire answers to some questions. For example, which product attributes will attract consumers? Or which step brings a better experience to consumers during the process of shopping? This paper aims to associate the latent Dirichlet allocation (LDA) model with the consumers’ attitude and provides a method to calculate the numerical measure of consumers’ product evaluation expressed in each word.Design/methodology/approachFirst, all possible pairs of reviews are organized as a document to build the corpus. After that, latent topics of the traditional LDA model noted as the standard LDA model, are separated into shared and differential topics. Then, the authors associate the model with consumers’ attitudes toward each review which is distinguished as positive review and non-positive review. The product evaluation reflected in consumers’ binary attitude is expanded to each word that appeared in the corpus. Finally, a variational optimization is introduced to calculate parameters mentioned in the expanded LDA model.FindingsThe experiment’s result illustrates that the LDA model in the research noted as an expanded LDA model, can successfully assign sufficient probability with words related to products attributes or consumers’ product evaluation. Compared with the standard LDA model, the expanded model intended to assign higher probability with words, which have a higher ranking within each topic. Besides, the expanded model also has higher precision on the prediction set, which shows that breaking down the topics into two categories fits better on the data set than the standard LDA model. The product evaluation of each word is calculated by the expanded model and depicted at the end of the experiment.Originality/valueThis research provides a new method to calculate consumers’ product evaluation from reviews in the level of words. Words may be used to describe product attributes or consumers’ experiences in reviews. Assigning words with numerical measures can analyze consumers’ products evaluation quantitatively. Besides, words are labeled themselves, they can also be ranked if a numerical measure is given. Online retailers can benefit from the result for label choosing, advertising or product recommendation.

Wang, Min; Du, Jiahao

2023 Journal of Modelling in Management

doi: 10.1108/jm2-02-2021-0036

In the Information Age, an increasing number of firms and researchers focus on consumer privacy. Meanwhile, many firms that collect consumer information through, information disclosure, consumer privacy, agency model, distribution contracts products or services often adopt the agency contract or the wholesale contract to sell through the online platform. This study aims to examine how different distribution contracts affect supply chain decisions when the firm can profit from disclosing consumer information.Design/methodology/approachThe authors use Stackelberg model to describe the relationship between consumer privacy and distribution contracts. Solve the model and analyze the monotonicity of the equilibrium results. The optimal contract choice and win-win conditions are obtained by comparing the profits under different contracts.FindingsThe authors find that when consumers’ maximal valuation is low in the market, the firm prefers to profit from disclosing consumer information under both the agency contract and the wholesale contract. As consumers’ maximal valuation increases, the firm turns to profit from product sales. Under the agency contract, the platform only generates profit when the consumers’ maximal valuation is high. By comparing the profits of the platform under the two types of contracts, the authors find the platform’s optimal contract choice under different consumers’ maximal valuations and platform commission rates. Combined with the comparison results of the firm’s profit, the authors provide the win-win conditions under the agency contract and wholesale contract.Originality/valueThis study analyzes the supply chain decision under the agency contract and wholesale contract, and it helps deepen the understanding of the interaction between consumer information disclosure and channel distribution contract.

R.L., Manogna; Mishra, Aswini Kumar

2023 Journal of Modelling in Management

doi: 10.1108/jm2-04-2021-0104

Market efficiency leads to transparent and fair price discovery of commodity markets, thus enhancing the value chain for competitive benefit. The purpose of this paper is to investigate the market efficiency of Indian agricultural commodities at spot, futures and mandi markets apart from exploring price risk management in these markets.Design/methodology/approachThis study uses Johansen co-integration, vector error correction model and granger causality for analyzing market efficiency of the nine most liquid agricultural commodities across three markets, namely, spot, futures and mandi. All these nine commodities are traded on National Commodity and Derivatives Exchange.FindingsThe statistical results indicate price discovery exists in the mandi market and spot market leading to futures prices. Mandi price returns are seen to negatively influence futures returns in the case of cotton seed, guar seed and spot returns in the case of jeera, coriander and chana. For castor seed, the three markets are seen to have no long run relationship. The results of Granger causality reveal short run relationship between all the three markets in the case of soybean seed and coriander. In these commodities, prices in all three markets are capable of predicting the prices in the other markets. For the case of cottonseed, Rape Mustard seed, jeera, guar seed, the results indicate unidirectional causality between the mandi markets and the other two markets.Research limitations/implicationsThese results shall facilitate policymakers to explore intervention through integrated agri-platform (IAP) in price discovery and market efficiency.Practical implicationsThe results of this study are useful in understanding the price discovery of mandi markets and its role in the spot and futures market. Agricultural commodities price discovery depends upon the integration of all these three markets. Introduction of IAP as described in the paper shall facilitate price risk management apart from improving the efficiency of price discovery.Originality/valueTo the best of the knowledge, this is the first study considering mandi, spot and futures prices in the price discovery process in India. In addition, this study found the role of mandi markets in serving the economic function of price discovery and price risk management. Hence, suggests for policy intervention for Indian agricultural commodities to manage price risk.