...Asymmetric Shocks, Long-term Bonds and Sovereign Default1 Junjun Zhu, Shiyu Xie School of Economics, Fudan University January 2011 Abstract: We present a sovereign default model with asymmetric shocks and long-term bonds, and solve the model using discrete state dynamic programming. As result, our model matches the Argentinean economy over period 1993Q1-2001Q4 quite well. We show that our model can match high default frequency, high debt/output ratio and other cyclical features, such as countercyclical interest rate and trade balance in emerging countries. Moreover, with asymmetric shocks we are able to match high sovereign spread level and low spread volatility simultaneously in one model, which is till now not well solved. As another contribution of our paper, we propose a simulation-based approach to approximate transition function of output shocks between finite states, which is an indispensable step in discrete state dynamic programming. Comparing to Tauchen’s method, our approach is very flexible in transforming various econometric models to finite state transition function, so that our approach can be widely used in simulating different kinds of discrete state shocks. JEL Classification: E44, F32, F34 Keywords: Sovereign Default, Asymmetric Shocks, Transition Function, Long-term Bonds 1 Corresponding authors: Junjun Zhu, Ph.D candidate at School of Economics, Fudan University, No. 200 Guoquan Road, Shanghai 200433, China. Shiyu Xie, professor at School of Economics...
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...504 IEEE TRANSACTIONS ON AUTOMATION SCIENCE AND ENGINEERING, VOL. 5, NO. 3, JULY 2008 Stochastic Modeling of an Automated Guided Vehicle System With One Vehicle and a Closed-Loop Path Aykut F. Kahraman, Abhijit Gosavi, Member, IEEE, and Karla J. Oty Abstract—The use of automated guided vehicles (AGVs) in material-handling processes of manufacturing facilities and warehouses is becoming increasingly common. A critical drawback of an AGV is its prohibitively high cost. Cost considerations dictate an economic design of AGV systems. This paper presents an analytical model that uses a Markov chain approximation approach to evaluate the performance of the system with respect to costs and the risk associated with it. This model also allows the analytic optimization of the capacity of an AGV in a closed-loop multimachine stochastic system. We present numerical results with the Markov chain model which indicate that our model produces results comparable to a simulation model, but does so in a fraction of the computational time needed by the latter. This advantage of the analytical model becomes more pronounced in the context of optimization of the AGV’s capacity which without an analytical approach would require numerous simulation runs at each point in the capacity space. Note to Practitioners—This paper presents a model for determining the optimal capacity of an automated guided vehicle (AGV) to be purchased by a manufacturer. This paper was motivated by work...
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...Decision-Making Process MGT/230 July 15, 2013 Decision-Making Process Summary Making decisions for career promotions or career changes can be difficult for one in the decision. Recently I was challenged with a career change. I had to make a decision to stay at my present employer, or switch careers to a different company. The reasoning behind a possible career change was because the present owner of the apartment complex has sold the company to a much larger company that is taking over at the end of August, beginning of September. Decision Process The decision process in this scenario was very difficult because I actually enjoy my job as an assistant property manager for an apartment complex. The first part of my process was, which company paid more. After I learned that my current job paid more, I went to the decision of the medical and dental benefits. My present employer did not have a good benefits package, but once the new company takes over the benefits will be well worth the low amount of money taken from my paychecks bi-weekly. The other job I was considering had a good medical and dental plan, but it was almost twice the amount than my present employment. After processing these two crucial decisions, I already had my mind made up but decided in the process to consider two more aspect. That first aspect was the distance between my house and the employers because gas prices seem to keep rising than falling for a short time. My present employer was closer...
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...Decision-Making Process Paper name class instructor date Decision-Making Process Paper Introduction In this paper I will be covering my decision-making process that I used when making a big decision along with how it is compared to the text example of the process. I also cover how my process would change and/or be affected if I followed the text example instead of my own. My Decision-Making Process For me I have not have the change to buy a house yet or relocated to another city/state however I have had the honor of enrolling into school. Although that would be something I could write about what I have had the most experience with and have also had to make the hardest decisions with is changing jobs. For me my process starts out when I have a reason to find another job whether it be the conditions at the current job, salary increase, or even possibly travel time. Next I try to see if there is a way to fix or resolve the current issue again based on my problem either by a promotion, extra hours, etc. After I have identified my reason for changing jobs and if there is no foreseeable way to resolve the problem I ensure that I will have another job to go to so that I will not have a gap in employment. This prevents me from being in a financial bind if it takes longer than expected to find another job. Next based on my reasoning for changing I ensure that the new job will meet my new requirements so that I do not end up in the same situation. Lastly after I get one of...
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...Decision-Making Process Paper I have recently made a decision to move to a different state. I will discuss the steps in my decision making process. The decision making process will be compared to the process obtained in class text. By using the steps in the text my outcome could have a different conclusion. I was having trouble find employment while as residing in New Mexico after a huge layoff from work. After months of searching for full time employment, I starting contemplating a decision to move my family to Spring Illinois. The choice to move was a huge decision to make. My wife would have to leave her state job along with my kids having to start a new school. So I made a list of pros and cons of making the move. I then began making a budget to see if the move was feasible financially. The pros outweigh the cons and I begin putting my decision into motion. After a few months of planning my move was complete. My decision making process was similar to what the text offered. In the text the first step is to identify the problem (Bateman, Snell, 2011). I did this by noticing that employment in new Mexico was not available The next step is generating alternatives (Bateman, Snell, 2011). I did this by deciding to move to Springfield Illinois. The third step was to evaluate the alternative, I did this by writing out the pros and cons of my decision I then followed the fourth step in making my choice, by deciding to move. The fifth steps includes implementation (Bateman, Snell...
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...Decision-Making Process Phileda Keeylen MGT/230 September 29, 2014 Christi Monk Decision-Making Process Making decisions can be easy or difficult, but in any case one must do their best to make the best choice. The decision –making process contains six stages to which managers or any individuals can utilize to make appropriate decisions. Identify and diagnose the problem, Generate alternative solutions, Evaluate alternatives, Make the choice, Implement the decision, and Evaluate the decision. A decision like home-ownership should be made with specific information to go by. Critical thinking is also something that should be included into the decision-making process. Critical thinking helps one to consider all angles, and think outside of the box. The decision Home-ownership is a step that most Americans take; however, not everyone makes the best decisions while going through the process. In 2006 I purchased my first home, and was not educated about the process at all. Knowing the best areas, what the highest and lowest homes were for the area, what damages, if any, had been done to the home, and simply making sure I was getting the best for my dollar. The six stages of decision-making are some that I consider; however, some I did not. The end choice was one of force and guilt, not a decision-making process. My decision process The stages I took to come to the decision of buying a...
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...The Decision Making Process MGT / 230 January 20, 2013 Stewart Binder Abstract Managers have to make decisions every day whether or not they are simple or complex to achieve the goals they have set for themselves. These decisions managers take are to achieve goals that they have set for themselves or the company. Decision making can be very challenging because there are many factors involved. “Most managerial decisions lack structure and entail risk, uncertainty, and conflict” (Bateman, Snell (2011). These factors cause managers not to take action or ignore problems that are occurring. Managers can create efficient solutions for problems by following the decision making process. “The model decision making process has six stages that the decision should follow, which include (1) identify and diagnose the problem, (2) generate alternate solutions (3) evaluate alternatives, (4) make the choice, (5) implement decision, and (6) evaluate the decision” Bateman, Snell (2011). Everyone has had to have made decisions in their lives whether or not they were simple or complex. People may have even used the decision making process without even knowing what it was. I have used the decision making process without knowing what it was when I decided to attend University of Phoenix. I read about the decision making process and realized I had followed the model in some way or another. The Decision Making Process Most people set goals for themselves. Goals are...
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...Decision-Making Process MGT/230 Management Theory and Practice July 25, 2011 Sylvia Ramirez-Cahan Decision-Making Process For the past year I have been struggling with the decision of whether or not to continue my education. The factors that influenced my decision to pursue my Bachelors degree were the financial commitment, time, personal responsibilities, professional responsibilities, and the affect a Bachelors degree would have on my career. My decision process involved the following steps. First, I carefully reviewed my financial obligations, researched expected educational expenses, and researched options to finance my educational expenses. Next, I considered the time I would need to commitment to my courses, and examined my ability and readiness to prioritize my educational responsibilities with my personal and professional responsibilities. Last, I researched the benefits of a Bachelors degree and the potential affect it could have on my career. According to Bateman and Snell (2011), the decision-making process consists of the following stages: identify and diagnose the problem, generate alternative solutions, evaluate alternatives, make the choice, implement the decision, and evaluate the decision. In comparison, my decision process to continue my education involved three steps: identifying the problem, making the decision, and implementing the decision. In April I started classes one week after making my decision. If my decision...
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...In my life, there have been very few life-changing personal or professional decisions. But in each of those occasions, one thing was required in each, and that was a decision-making process. One of my most recent decisions I had to make was whether to leave the Active Duty Army after seven years of service, or not. The first step in process was to identify what the issue or problem was. In this case, the issue was if I was going to stay in the Army, or let my contract expire and get out. After establishing the decision that was to be made, the next step in the process was to weigh the pros and cons of leaving, and the same for staying. The pros and cons list for leaving the military were derived from asking myself what will be the direct result on myself and my family, upon separating from the Army. Once that list was complete, I came up with a list of pros and cons for staying in the Army, based on what the direct result it would have on myself and my family. After completion of the pros and cons of both decisions, I sat down with my wife and we brainstormed ideas on what I could do to help minimize the cons in either situation. Then, we came up with an list of what was most important to least important for us and our future. This list enabled us to look at the pros of either decision, and determine which decision addressed the most important needs in our life and future plans. Now that both decision choices were broken down by pros and cons, it was easier to come...
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...Decision Making Process MGT/230 April 30, 2013 Jenny Williams Decision Making Process Introduction There are several steps in the decision-making process. Have you ever wondered how do you make the decision that you make? In my paper I will be discussing each step of the decision making process. I will also compare my decision making process to the one in the text. Also I will include how my decision outcome would have been different if I would have made another decision by following the decision making process. I will be discussing a time in my life where I had to make a bug decision. I think that the decision that we make along the way can sometimes come back and ruin your life. Decision making process The first step in the decision making process is to identify and detect the problem. This step lets you reveal whatever the problem is to inform you that a problem exists. A few years ago, my friend told me that they were hiring where she was working, she knew I was looking for a job and I told her that I would think about it because working with friends can be a problem sometimes. So a couple of months went by on the job and I saw that my friend was taking things from the store. So the problem was should I tell on my friend. The second step in the decision making process is to generate alternatives to the situation; either I would have to tell on my friend or put in my two week notice. I had to really think about all my options that were available to me. The third...
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...Decision-Making Process Paper People make decisions in their everyday lives. Some decisions are easy to make, while implementing others is quite difficult. An appropriately organized and controlled decision-making process will help with these issues and bring positive outcomes for all involved. The decision-making process may become challenging for people due to “the lack of structure and entail risk, uncertainty, and conflict”(Bateman and Snell,2012, p.86). These challenges can be avoided by using an appropriate model for solving important personal and professional decisions. Bateman and Snell identified six stages of the decision-making process that can be used to solve any problems or decisions. The first step is to identify and diagnose the problem. The problem that existed for me was that I really wanted to go back to school after being medically retired from the United States Army. I had been in the Army since 2005 and really did not know much else outside the military. My first step was to move to Georgia with my family and then look at the colleges around the area. Step two in the decision-making process is to generate alternative solutions. At this point in my life I really didn’t know what interested me and what degree program seemed to fit my personality. I would go on to look at all the schools in the area and which degree programs they offered. I would then look at the times of day they offered classes to figure out which school would work for...
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...Decision-Making Process During the course of our lifetimes we have come across many significant and difficult choices that affect us. These choices may have affected our personal and professional lives. Therefore, we make these choices with much thought and care. The decision in which I have considered to have been the biggest one yet for me was, buying a home. The decision of buying a home was considered more as a personal decision rather than a business decision. Fritzsche, David (2007) states “ Personal values have long been associated with individual decision behavior” (p. 1). As mentioned in the quote, the decision was driven by my personal values. The process and the decision of buying a home were longer than expected. The process in making the decision was based upon continuing to rent or own a property. In the decision-making process I was assisted by my wife and it consisted of the following, Identifying my decision, self assessment, gathering information (pros/cons), weigh out the best option, analyzing my option, select my option, and finally take action toward my decision. The process in making my decision had a structure, as previously stated I had identified my decision of buying a home rather than renting. This first step was based on my family values and proving a place to call home. The second step was completing a full self- assessment. Part of the assessment consisted of analyzing my finances, needs, and wants. This second step was a very important one...
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...Decision Making Danielle Gomez MGT/230 August 7, 2015 James Bailey There comes many moments in everyone’s lives when you have to make some very important decisions. They may be little decisions or life changing decisions. Either way they will affect you somehow, so it is important to know the steps in the decision making process as well as considering the consequences of them. Decision making is the process of making choices by setting goals, gathering information, and assessing alternative occupations ("Decision Making Process", n.d.). There are seven steps when you want effective decision making. The first step is to identify the decision that needs to be made. This is naturally the most important step of all. The second is to gather necessary information to help make this decision. Next is to identify alternatives and then weigh the evidence collected. Step five is to choose from your alternatives. The last two steps are to take action and review your decision and the consequences of making this decision. These steps are what makes the decision making process ("Decision Making Process", n.d.). A personal experience where I have had to make a very important decision in my life was when I decided to continue my college education. It has always been my plan since high school to first attend beauty college and obtain my cosmetology license because that was one of my passions since I was a little girl. I knew that was what I wanted to do since I was young but I always...
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...Decision-Making Process MGT/230 January 9, 2012 Decision-Making Process Each day someone is put into a position, which he or she may have to make a life changing decision. Most will take his or her time to figure out the best decision. “The ideal decision making process includes six stages. (1) Identify and diagnose, (2) generate alternatives, (3) evaluate alternatives, (4) make the choice, (5) implement the decision, and (6) evaluate the decision” (Bateman, 2011). In November 2008 I had to make one of the biggest decisions in my life. At the time I was three months pregnant with my second child and my job was causing tremendous stress on my pregnancy. The decision was to either go back to college to work on my Bachelor’s Degree or continue my job as a pharmacy technician at Hina’s Pharmacy. Thankfully I was in the position, which I had enough time to put the decision-making process to work. I knew that the decision I was about to make was going to affect my family both financially and emotionally. The first step in the process was identify and diagnosing the problem. The problem in question was that I had an Associate’s Degree, but my job was not paying me enough money to support two children, and the insurance was expensive. Insurance to my family means a great deal because my daughter has medical problems with her legs, and she is allergic to whole milk. The second step in the process was to generate alternative solutions, which included staying at my current place...
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...Making the Right Decision Charlene McCorkle MGT/230 University of Phoenix Richard Rogers July 23, 2012 Making the Right Decision Making the right decision is an intricate process especially in the field of business. In the field of business the decision making process consist of six steps which are discussed in the preceding sections. Following this I will explain my own method of decision making as well as how the decision making process compares to my own. Decision Making Process Step One: Identify and Diagnose the Problem Step one of the decision making process is to determine what the problem is and why the problem has come about, this is an essential aspect of remedying the appropriate solution (Bateman & Snell , 2011) . Step 2: Generating Alternative Solutions Step two is determining which solution has the best possible outcome. After the problem is identified a resolution to the problem is chosen based on solutions that have already been implemented before (ready made) or solutions that have been customize to fit the particular problem (custom made) Bateman & Snell , 2011. Step 3: Evaluating Alternatives Step three is determining which solution is the best. This is achieved by examining all aspects of the problem (Bateman & Snell, 2011). An essential aspect of evaluating alternatives is to determine what the potential outcomes of each alternative may be which affects which alternative is decided upon. Step 4: Making the Choice ...
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