Cost portfolio management

Zipfel A (2003) Modeling the probability-cost-profitabihty architecture of portfolio management in the pharmaceutical industry. Drug Information Journal 37 185-205. 

Return/profit "Givens" ITT under Harold Geneen, earnings per share objective Quality Low-cost manufecturing Customer service Growth Profit Portfolio management Information systems... 

In this form, a multiple of standard deviation of the cost function is added to the mean values to form the objective function. The case k = 0 corresponds to game theory (suitable for, e.g., large portfolio management, fair gambling), whereas k> 0 implies a so-called risk-aversive strategy. 

We propose an integer quadratic programming model for partner selection that tries to minimize the overall cost impact from the deviation in supplier costs. Such a model will be very useftil to supply chain owners and channel masters. The model is an adaptation of the Markowitz model for financial portfolio management, for the purpose of managing a portfolio of suppliers. For this model, we define the impact in terms of the risk as given by the deviation of the total supply ehain cost from its expected mean value. Given the expected costs and the variability of costs for all suppliers and manufacturers the objective is to ehoose a set of suppliers and manufacturers that minimize the expected cost of operating the entire supply chain and at the same time minimize the risk of variations in the total supply chain cost. The selection of these partners also considers the allocation of orders between these selected partners. 

A professional manager has the time, training, and temperament to manage your assets successfully—qualities you may not possess. A trained professional takes the emotionality out of investing, knows the appropriate investment vehicles to achieve your goals, and can manage risk within your portfolio by choosing the proper balance of investment choices. This service will cost from one to two percent of your account balance annually. 

As we transform the costs of iterations, we have to transform our investment profile. Being wealthy means you have more choices. If you have more choices, your values matter more. In the end you have a portfolio of iterations. How do we want to manage those iterations ... 

Launch and market development Managing a portfolio of costly and risky R D pro ects Building a solid business case ... 

Procedurally the R D Manager will have to decide, after consulting the relevant staff, what analytical support will be required for each project in the portfolio for the coming period. Following discussions with the analytical services manager, the cost and availability of in house provision can be determined. Analytical services should be able to provide advice on where to get the most economical external provision of non-available analytical support. 

Capital is at risk until the breakeven point has been reached. It is common practice to give consideration to the discounted breakeven point (DEEP), the time at which the (NPV) is zero when discounting at the cost of capital. At any time after the (DEEP), the project will have recovered its cost and provided a greater return on the capital than the cost of capital. It is customary for management to spread risk by diversifying the activities of a company among a portfolio of projects. 

In the case of a fully hedged portfolio there is, of course, a cost. The fully hedged portfolio is a portfolio whose return over a specific, short period of time has been transformed to be approximately the return on a short-dated instrument. The flexibility afforded by the futures contracts allows the return to be adjusted according to the risk preferences of the fund manager. Risk-averse fund managers will tend to fully hedge their portfolios risk takers may choose to short fewer contracts and, in effect, use only a partial hedge. 

As explained in Chapters 19 and 16, swaps and futures contracts represent one of the easiest and most effective methods of managing a portfolio s duration exposure. Government bond futures is a frequently traded and extremely liquid contract in Europe, and investors can buy futures to increase duration, and sell futures to reduce the duration of their portfolio incurring minimal transaction costs. 

As of December 1999, installed capacity consists of 6.7% hydro, 26.3% coal, 10.0% oil, 26.3% gas and 29.2% nuclear. The emergence of LNG as one of the major electric power sources in Korea implies that the portfolio of energy sources will depend not only on the cost of power generation but also on the public preference for environment protection and the manageability of power supply. 

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