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Latest Articles and Research Papers
Retire or not to retire: A blueprint laying out the fundamentals of bond valuation, investments in bonds, and recording economic gains accordingly
Your company has a great reputation among lenders as you have never defaulted on your debt commitments. Your company is so solid that even your zero-coupon bonds are in high demand for many fixed-income investors. Currently, prevailing market rates are on the rise. Your company’s financial managers are contemplating retiring all these bonds and some…
Solution to Management Science Series #217: Real world example: Mushroom Kingdom Social Network
Serra, a video game and console collector, plans to launch a digital forum, which would resemble a social network only for people who collect video games and consoles.
She wants to name it ‘Mushroom Kingdom Social Network’. Albeit optimistic about the prospects of this new venture, Serra still wants to test whether it is…
Chart of the Day Vol.1: Removing the chaff from the wheat in different investment vehicles
The ability to distinguish between the noise and the signal is a rare skill within the confines of the financial markets and investment world. In our modern times, there is too much emphasis on the stock market while this particular market may tend to disguise macroeconomic realities, especially when isolated in the broader context of…
Solution to Management Science Series #216: Should Condor launch a new website?
An online video games store named ‘Condor’ needs to test its old and new web designs. Condor randomly redirects a sample of customers to either site and measures the sales information of customers who purchase.
Condor will launch the new website only if it is 90% confident that the new site generates more sales…
On economics you have been taught wrong 🧭
Unfortunately, the dismal science taught in our schools and universities rests on many blatantly wrong assumptions. From the definition and calculation of inflation to investment management and worshipping only a small subset of assets while ignoring those that would lead to greater financial freedom, the economics, as a subject, is losing ground while being mired…
Solution to Management Science Series #215:Real-world example: Cornell Endowment
Selim Hasagasioglu Academy and Consulting Services agreed with Cornell University’s Office of University Investments on increasing the average donation per Cornellian including alumni and current students.
Last year, average donation value was $200 per Cornellian. Selim’s company designed a new digital donation platform and was additionally tasked with assessing whether the new platform increases…
On E-commerce: Can every category be offered through e-commerce?
E-commerce and traditionally analog incumbents, especially those that are unspecialized, have been trying to penetrate into different industries and categories, thinking that many such offerings can be provided digitally.
Were they able to make it happen?
Of course, retail operations specific to some products have quickly utilized e-commerce practices, as well as omni-channel applications. While…
Solution to Management Science Series #214: Real-world example: Berserk Toy Company improving its QC processes
Berserk Toy Figures is a toy company producing its copyrighted Guts figures.
The manufacturing process owned by the company creates the head part of the figure that is designed to be 19 mm wide with a standard deviation of 1.5 mm.
Head part of the figure is an important feature of the figure…
Which company is this?
Which company is this?
Hints: -It operates in a traditionally analog business that is tested by digital challengers.
-However, it continues to beat every one of them in terms of profitability.
-Operational excellence, efficient cash flow management, customer loyalty, and customer service are their hallmarks.
-It also started its digitization initiative, currently comprising 16% of…
Solution to Management Science Series #213: Real-world example: Marbella Call Center
Marbella Call Center is a contractor assessing the quality of calls to the customer services of top global brands. Recently, Marbella agreed with Eldorado, a global retailer, on assessing the quality of the customer service of Eldorado.
Marbella has been periodically recording a random sample of customer calls to Eldorado. Calls are evaluated on…
On Scaling Service Businesses and Digitization 💻
“Many businesses gain only limited advantages as they grow to large scale. Service businesses especially are difficult to make monopolies. If you own a yoga studio, for example, you’ll only be able to serve a certain number of customers. You can hire more instructors and expand to more locations, but your margins will remain fairly…
Solution to Management Science Series #212: Real-world example: Determining Portfolio Returns
An ETF created by the investment management firm, Gold Returns (GR) has a normally distributed expected monthly return with μ = 2% and σ = 8%.
a)What is the probability that the return is positive next month?
b)What is the probability that the portfolio’s return exceeds 10%?
c)What is the median return?
…
Solution to Management Science Series #211: Real-world example: Kabuto Drinks forecasting production capacity and launching a loyalty program
A soft-drink company called Kabuto plans to model the production capacity for the year 2026.
The forecasters determined that the annual soft-drink consumption with the respect to Kabuto’s brands is normally distributed with a mean of 160 liters per customer of Kabuto per year and a standard deviation of 40 liters per customer per…
Career Advice 💡Focusing the numbers that do not add up 🧮
An on-campus recruiter came to your school and presented a slide deck showing some detailed metrics of the company.
You saw the revenues, profits, growth rates, and many other important financial metrics. Of course, such information is important for all prospective employees while they are trying to make a sound decision.
Then, you saw the…
Solution to Management Science Series #210: Real-world example: Famous hotel chain, Mushroom Kingdom, bent on improving customer satisfaction
Real-world example: Famous hotel chain, Mushroom Kingdom, bent on improving customer satisfaction
You are the owner of the famous hotel chains called Mushroom Kingdom (MK). Historically, 75% of all the customers claimed that they were ‘completely satisfied’ with the services and accommodation offered by the MK.
You hired an analytics company, named Gotham…
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