Search results for "Profit maximization"
showing 7 items of 7 documents
Profit Margin Ratio, Markup, Profit Margin Per Unit, Economic Profit, and Profitability as Objectives for the Firm: An Economic Point-of-View
2015
We study five operational objectives for the firm: three marketing objectives (maximizing profit-margin ratio, maximizing markup, and maximizing profit-margin-per-unit), and two financial objective (maximizing economic profit (i.e., EVA) and maximizing profitability), as alternatives to the scholarly objective of maximizing profit. We prove that (i) Sales are lowest for profit-margin-per-unit, intermediate for profit-margin ratio and markup, and highest for profit maximization. Input consumption, including labor, is lower. Prices are in the reverse order. In terms of profit, profit-margin ratio, markup, and profit-margin-per-unit are necessarily less efficient than the classical profit maxi…
Is there sustainable entrepreneurship in the wine industry? Exploring Sicilian wineries participating in the SOStain program
2016
Abstract Global climate change and the accelerating depletion of natural resources have contributed to increase discussions about the role of private enterprises in reversing negative environmental trends. Rather than focusing on profit maximization, policy makers and consumers pressure groups expect firms to meet a triple-bottom line of economic, environmental and social value creation. Hence sustainable entrepreneurship has received recently increasing interest as a phenomenon and a research topic. More recently, the concept of sustainability has been taken seriously in the Italian wine industry. The organizational challenge for entrepreneurship is to better integrate social and environme…
Competition, risk taking, and governance structures in retail banking
2005
This paper investigates the extent to which the linkages between bank performance and governance structure affect deposits market competition and risk taking incentives when commercial banks compete with organizations with objectives different from profit maximization. These organizations include savings banks whose corporate and ownership structure yields an objective function that can incorporate labour expenses. It is found that such objective function enables the savings banks to capture a greater market share of bank deposits and to take on relatively less risk in their portfolio of investments. The empirical evidence from the Spanish retail banking sector documents these conclusions.
A reconsideration of the link between vertical externality and managerial incentives
2018
Previous research revealed that the strategic role of delegation contracts disappears if two quantity†setting firms outsource input production to a monopolistic supplier. I show that this role is restored if the assumption of a downstream duopoly is relaxed. Thus, delegation contracts allow downstream profit†maximizing owners to commit their firms to a behavior that differs from their preferences. This behavior varies nonmonotonically with the number of firms in the downstream market. Corresponding deviations from profit maximization are larger if the upstream monopolist makes a price precommitment. But little to no deviation occurs if the number of firms is large.
Revisiting the Mathematical Difficulties in Patinkin Cartel Model and Joint Profit Maximization
2015
We discuss the mathematical difficulties encountered in Patinkin's classical cartel model. It may be impossible to derive Patinkin's cartel by finding the reciprocal marginal cost functions: it could be impossible for cartel members to compute a solution, unless certain assumptions are made to simplify the problem, such as quasi-linear marginal costs or constant marginal costs. The total cost function is incoherent with respect to the sum of members' total cost. The model cannot handle constant marginal costs but we remind that de Mesnard's (2009, 2011) model of cartel with exogenous market shares allow solving the problem. We conclude that the Patinkin model of cartel is not so self-eviden…
Are Farmers in Alternative Food Networks Social Entrepreneurs? Evidence from a Behavioral Approach
2015
Social entrepreneurship, individual activities with a social objective, is used in this study as a conceptual tool for empirically examining farmers’ participation in alternative food networks (AFNs). This study verifies whether their participation is driven by the social entrepreneurship dimension to satisfy social and environmental needs. We develop a more inclusive view of how social entrepreneurship is present among farmers participating in AFNs by using a behavioural approach based on three main psychological constructs: attitude, objective, and behaviour. The empirical results show that two types of farmers participate in AFNs. One type is closer to commercial entrepreneurs; the main …
A novel heuristics-based energy management system for a multi-carrier hub enriched with solid hydrogen storage
2014
In this paper, an efficient optimization algorithm for the energy management of a grid-connected energy hub plant is proposed. The Simulated Annealing algorithm is adopted for the solution of the energy management problem aiming at the profit maximization for the owner of the energy hub plant. The use of a heuristic algorithm was required by the non-linearity of the efficiencies of each component in the energy transformation stages. The proposed heuristics is applied to a large energy hub, corresponding to the simulation of the test-bed that is being designed and developed inside the ongoing INGRID European research project.