Ayrıntılı Bilimsel Program ve Bildiri Özetleri - YAEM2010

P2-05
YAEM 2010
YÖNEYLEM ARAÞTIRMASI VE ENDÜSTRÝ MÜHENDÝSLÝGI 30. ULUSAL KONGRESÝ
Risk Analizi ve Yönetimi 2: Risk Analysis and Management
1 Temmuz 2010 / 10:00 - 11:30
Oturum Salonu: MDBF L047
Oturum Baþkaný: Sinan Erzurumlu
Production, Process Investment and the Survival of Debt
Financed Startup Firms
1 2 3
Fehmi Tanrisever , Sinan Erzurumlu , Nitin Joglekar
1 Department of Industrial Engineering and Innovation Sciences,
Eindhoven University of Technology, Eindhoven, The Netherlands
2 Technology, Operations and Information Management Division,
Babson College, Boston, USA
3 Department of Operations and Technology Management, Boston
University, Boston, USA
Whether to invest in process development that can reduce the unit
cost and thereby raise future profits or to conserve cash and reduce
the likelihood of bankruptcy is a key concern faced by many startup
firms that have taken on debt. We explore this concern by examining
the production quantity and cost-reducing R&D investment decisions
in a two period model. A startup firm must generate sufficient cash
flows to meet its current debt obligations at the end of the first period
to survive and secure future financing in the following period. We
show that under a base case, with deterministic demand, such a
startup should produce the monopoly quantity and use an invest-all-
or-nothing investment policy. However, under stochastic demand and
allied survival constraint, the optimal investment policy does not
necessarily have an all-or-nothing character. In this case, we establish
conditions for creating hedges through either aggressive or
conservative investment and operating alternatives.
Information Technology Risk and Return Trade-off: New
Evidence from Recent Data
1 2 3
Gokcen Arkali , Indranil Bardhan , Vish Krishnan
1 Prairie View A&M University
2 University of Texas at Dallas
3 University of California at San Diego
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