Materials for a Business Jet Essay Example | Topics and Well Written Essays - 1250 words

Materials for a Business Jet - Essay Example In the paper, a comparison of the related costs of using the five different aircraft materials is shown. When using CFRP, there are also savings of assembling manpower. There will also be savings due to the reduced weight of using composite materials like CFRP and Kevlar.Maintenance cost of a material is determined by several variables. These include the density, ultimate tensile strength, tensile yield strength, durability (fatigue) and fracture toughness properties listed. In a comparison of the related costs of using the five different aircraft materials is shown, the properties of the five materials studied here are displayed. The aluminum alloys have properties which are specific to the number of the series they belong to. The alloy series is categorized by the metal that is the major alloying element. For instance, the 5xxx series aluminum alloys contain magnesium as the major alloying element. The 5xxx series alloys have moderate to high strength and good corrosion resistance. They are not heated treatable. Mechanical properties and strength are less desirable than in the 2xxx and 7xxx series. The 7xxx series aluminum alloys have zinc as the major alloying element. These alloys have the greatest strength of the heat-treated alloys. The 7xxx series alloys also have good heat-treating qualities. In a paper, the particular conditions and tempers used to obtain the material property values are as follows: For aluminum 7475, the T61 temper was used. For aluminum 5052, the H34 condition properties were used. For aluminum 2124, used T351 condition/temper. Kevlar K49 used for density, shear strength and modulus, and yield strength. For density and ultimate tensile strength, used Dupont Kevlar 49 Aramid fiber. For CFRP, data is for Type P-VSB-32 (Union Carbide) carbon fibers. Aluminum alloy 7475 has lower impurity limits than 7075. Aluminum 7475 is used for aircraft structures because of its good fracture toughness.

Personal Skills and Professional Development Assignment - 1

Personal Skills and Professional Development - Assignment Example 255). In the process, clientele and users use the professionalism of construction engineers to make sure the construction plans are efficient, safe, and within budget. Construction engineers normally see a task from the beginning through to the end. During this period, the construction engineer collaborates with several other professionals like inspectors and engineers. These collaborations involve the production of designs and details that the building team requires. The roles of construction engineers differ extremely from self-employed and minor buildings tasks to working with international construction firms (Institute for Career, 2010). Projects handled by such firms usually wind up being construction engineering milestones because of their immense budgets and meaning. The professional effort of construction engineers is essential from the earliest phases of a construction task. This effort can begin with coming up with concepts of the building or structure’s appearance, determining costs, evaluating the requirements of the building’s users, and figuring out its effect on natural surroundings. Construction engineers also aid in selecting a site for a project and collaborating with servicers at the construction site. Here, construction engineers make sure services carry out their work accordingly to meet set standards and come up with a sustainable, well-designed, and artistically pleasant structure or building. Construction eng ineers are also required to have knowledge of moneymaking and financial aspects of construction. I chose construction engineering under construction due to three key reasons. First, construction engineering involves invention. The way an inventor creates a new device or concept is similar to the way a construction engineer designs structures and properties (Careers in Construction,

Impact of Commercial Paper in the Indian Money Market

Impact of Commercial Paper in the Indian Money Market In todays competitive environment, firms find themselves in a perpetual race to acquire the cheapest source of finance to leverage their companies and gain a competitive advantage. All this is undertaken by companies to satisfy their masters – the shareholders. Finance is a very scarce commodity. A company can satisfy its funding needs generally through two sources namely, equity and debt. It is common practice to use a mix of both in the capital structure. Further the company may rely on two sources of finance – long term sources and short term sources. Long term sources of finance typically include – Shares, debentures, venture capital, public deposits, government grants, mortgage, retained profits, loans from financial institutions, loans from commercial banks etc. Whereas, short term sources of finance include – Overdraft, trade credit, factoring, cash credit, loans advances, discounting of bills, commercial paper etc. A very interesting segment of finance to note is that of money markets. It is an important component of financial markets and is a short term market with maturity period of 1 year or less. The most common instruments traded in the money markets include –treasury bills, certificates of deposits, repurchase agreements, commercial paper (CP) etc. Commercial paper is a short-term debt instrument of the money market. It is an unsecured promissory note with a fixed maturity of 7 to 365 days. It is issued at a discount and redeemed at par. The origin of commercial paper can be traced back to the late 19th century when it grew rapidly as a source of corporate financing until 1920s when it all but disappeared during the Depression. Momentum picked up after the Second World War and a notable incident in the commercial paper market was the Penn Central  [1]  failure which shook the market and temporarily halted its growth (Calomiris, Himmelberg, Wachtel, 1994). Commercial paper as a source of short term funds to Indian corporate sector was introduced from 1990 by the then government in the process of continuing reforms. The direct objective of commercial paper was to improve the short-term liquidity. That is by releasing the pressure on bank funds for medium sized borrowers and enabling companies with high credit ratings to rais e funds directly from the markets (Reddy, 1999). Commercial paper can be further categorized into financial and nonfinancial commercial paper. Nonfinancial commercial paper is issued by nonfinancial corporations, typically large industrial or service firms and utility companies. Financial paper on the other hand is issued by financial companies such as banks (Shen, 2003). From the investors point of view, commercial paper carries with it a great many advantages like low risk due to issuance by prime rated companies, limited reinvestment risk because the commercial papers are generally issued for a short time horizon thereby protecting the investor from large interest rate fluctuations. Investors are also keen on the fact that commercial paper gives higher yields when compared to other short-term investments such as treasury bills or certificate of deposits (Standard Poors, 2008). On the flip side commercial paper is not absolutely risk free, there are certain risks attached to commercial paper – credit risk in that the company may be unable to pay the investors on maturity though this is an extremely rare event, interest rate risk which arises due to the changes in the market interest rates. This risk is mitigated because most commercial papers are issued for short term and most of the investors hold onto the paper until maturity thereby they are unaffected by price movements. Rollover risk is also present because most papers are retired by the companies by making a fresh issue. This risk is also minimized by securing a bank line of credit. The major risk facing commercial paper is liquidity risk which affects the market as a whole. The whole market turns hostile, interest rates rise and the issuer becomes unable to rollover or make fresh issues (Standard Poors, 2008). To guide the investors in making rational and informed decisions, it is mandatory for the commercial paper issue to gain a credit rating from recognized agencies. Ratings give an idea as to the risk attached to the commercial paper and the overall picture of the firm. A substandard rating implies that the firm is extremely risky and there is probability that the firm may default on its payment. In U.S., the recognized credit rating agencies include Standard Poors, Moodys, Fitch, A.M. Best etc. In the commercial paper rating mechanism practiced by Standard Poors, a rating of ‘A1+ is the highest possible score meaning that the firm is creditworthy and there is no risk of default whereas a rating of ‘A3 and below notifies that the instrument is speculative or junk. In India, Credit Rating Information Services of India Ltd. (CRISIL) and Investment Information and Credit Rating Agency of India Ltd. (ICRA) are the reputed rating agencies. The other notable agencies operating in India are FITCH ratings and Credit Analysis and Research Ltd. (CARE). According to the RBI, for a commercial paper to be issued in India the company must have a minimum credit rating of P-2 as per the CRISIL rating scale or its equivalent. Rating is extremely important as the regulations laid down specify that money market funds can invest only in commercial papers having the minimum rating of P-2. Commercial paper scores over bank line of credit or short term loans in many aspects. A company that has high credit ratings enjoys many privileges – they can access lower cost commercial paper, flexible maturity periods to match their cash flow stream. Commercial paper in essence is an unsecured promissory note. Thereby, there is no lien created on its assets. Moreover, there is no limitation on the end-use of funds generated through commercial paper issue. They are traditionally favored as they are cheaper when compared to bank loan, as low as 3.5 % for three months 5.6 to 5.75 % per year. Banks cannot match this rate since their cost of funds itself works out to almost 6% (Pathak, 2009). Money market funds are the largest holders of commercial paper (Standard Poors, 2008). The other investors in commercial paper include trust funds, retirement and pension funds, insurance companies and other large firms having extra funds to invest in them. Individual investors find it difficult to deal in this market because commercial papers are usually sold in very large denominations. To overcome this, they invest in it through money market mutual funds. In India commercial banks were the subscribers of almost 80% of all commercial paper issues but that trend has been declining and as in the U.S., mutual funds are becoming the prominent investors. The recent financial crisis affected almost all the major economies around the globe. The U.S. was the epicenter of this financial earthquake. The recession had far reaching effects many companies folded, investment houses lost their prominence and were absorbed by larger entities and banks were bailed out by the government to avert an economic disaster. The commercial paper market first felt the effects of the crisis on August 2007 when the market contracted sharply as a reaction to the subprime crisis (Shrivastava, 2008). The crisis deepened during September 2008 beginning with the default of Lehman brothers. A large money market fund, the Reserve Primary Fund announced that it had suffered losses to the tune of $785 million as a result of holding Lehman Brothers commercial paper. This spread shockwaves through the entire market and investors were in a hurry to redeem their holdings. In a space of one month the total value of commercial paper outstanding reduced by 15% from $1.76 trillion to $1.43 trillion (Kacperczyk Schnabl, 2009). The Indian economy is intimately tied to the global economy; as such any fluctuations in the global market will have repercussions in the Indian financial market also. Global financial crisis manifested itself in India on January 2008 resulting in the crash of the Indian stock market caused due to the fleeing of FIIs (foreign institutional investors). The Indian commercial sector found itself in a race to acquire funds due to the drying up of several avenues of fund notably, external commercial borrowing. To counter this, bank finance in the form of investments in shares, bonds, debentures, commercial paper etc. expanded more than the previous year (Joseph, 2009). So on a contrast with the commercial paper market of America, the commercial paper market in India was on a rise during 2007. In the U.S., the Federal Reserve undertook unprecedented steps to stabilize the commercial paper market. Federal Reserve of New York introduced the Commercial Paper Funding Facility (CPFF) whereby the Federal Reserve would buy the paper directly from eligible issuers (Federal Reserve, 2008). In early January 2009 the Federal Reserve was the single largest purchaser of commercial paper and accounted to having almost 22% of the market. The facility purchases the commercial paper and holds onto it till maturity and the returns received upon maturity are utilized to pay off Federal Reserve of New York which had provided the capital to initiate the facility. At its peak the Federal Reserve held almost $357 billion worth of commercial paper, that holding was gradually reduced over the years and at the time of the withdrawal of the facility during February 2010, the amount had dwindled down to $3.94 billion (Zumbrun, 2010). In India, the commercial paper market is extremely healthy and as p er the latest outstanding figures it is 1,03,915 crores. 1.1 Aim of the project To understand the role of commercial paper in the Indian money market along with the changes in risk return and also the total outstanding during the period of financial crisis. 1.2 Need of the study India is the second fastest growing economy in the world. The policy makers aspire to attain double digit growth rate. During our review of literature we came to understand that no significant study had been undertaken to understand the effect of the financial crisis on the returns of commercial paper in India. Moreover, studies concerning commercial paper on a global level are also limited. We attempt to fill this knowledge gap. There is wide literature in the form of articles regarding the effects of the financial crisis on the American commercial paper market. We are attempting to understand if the effects of recession on the American commercial paper market have also affected its Indian counterpart. 1.3 Objectives of the study The following are some the objectives that we hope to accomplish during the course of our study. a. To understand the role of commercial paper as an instrument in Indian Money Market. b. To understand risk return movement of commercial paper in India during the financial crisis. c. Comparative analysis of risk return between American Indian commercial paper. d. Understand the changes in commercial paper outstanding of both American and Indian commercial paper market during the financial crisis. 1.4 Hypothesis There is a positive correlation between Indian U.S. discount rates. Indian U.S. commercial paper outstanding have decreased during the period of financial crisis. 1.5 Methodology The study is quantitative in nature. We will be relying exclusively on secondary sources of data, significantly the reports generated by the Reserve Bank of India. Statistical tools such as measures of central tendency, measures of variation and correlation will be used. 1.6 Limitations of the project The major problem being faced is scarce information regarding the Indian commercial paper market. Time constraint will limit the extent depth of the study. The data regarding commercial paper rates for both India and U.S. has been published only up to November 2009 at the time of study. 1.7 Chapter Plan The following is a brief summary of the chapters within the project. Chapter 1: Introduction – Provides a brief insight into the history, role and functioning of commercial paper as a money market instrument. This is followed by the aim, the need, objectives and a brief overview of the methodology followed by the limitations of the study. Chapter 2: Literature review – A broad review of literature which was deemed relevant to the study. The literature mainly comprise of empirical studies undertaken by various researchers. Chapter 3: Methodology and the methods – The data source, statistical tools are highlighted in this chapter. Chapter 4: Analysis and Interpretation of the data collected. Using the techniques mentioned in the methodology, a thorough analysis of the data is conducted. A brief interpretation is also provided. Chapter 5: Conclusion – Concludes the study with a summary of our findings. Chapter 2: Literature Review 2.1 According to Saurabh Ghosh and Narayan Chandra Pradhan (2009) The authors have tried to understand the determinants of WADR (weighted average discount rate) and how these determinants have affected their movement over the past 5 years after adjusting for seasonal fluctuation. The real and financial variables considered for the study were: Index of industrial production (IIP), Amount of CP issued, Cut-off yield 364 days, Call/Notice money, Sensex, Indian Rupees – U.S. Dollar exchange rate bank credit. A close movement and dependency was found out between WADR and the call rate the 364 day treasury bill yield. Although initially there wasnt much co-movement between WADR and the BSE Sensex, co-movements were noticeable after December 2005.The empirical results indicate that there has been an increase in the average monthly issuance, WADR and volatility of WADR over the years. However, around 80% of the commercial paper issued by companies over the last five years was from ‘Prime-rated companies. 2.2 According to Matthias Kahl, Anil Shivdasani Yihui Wang (2008) Firms access commercial paper market to enhance their financial flexibility. Firms use it to fund investment when attractive projects arise and they have insufficient internal funds. Another way in which commercial paper may be used to increase a firms financial flexibility is as bridge financing. They argue that commercial paper borrowing in positively correlated with investment expenditures and negatively correlated with cash holdings. 2.3 According to Pengjie Gao and Hayong Yun ± (2009) The collapse of Lehman brothers was followed by a virtual closing of the commercial papers market, followed by which a number of firms drew excessively on their remaining lines of credit out of fear that weakened banks would reduce their loan commitments. Aggregate commercial paper borrowing declined 15% after the collapse of Lehman brothers, but the effect was concentrated among firms with high default risk. High risk borrowers that were negatively impacted by the decline in the commercial paper market after Lehmans default substituted commercial paper with lines of credit. Low risk borrowers remained as they were. 2.4 According to Charles W. Calomiris, Charles P. Himmelberg Paul Wachtel (1994) The authors arrived at three conclusions. Firstly, there is a flight to quality during a downturn. Firms with strong balance sheets exploit this demand to reduce their cost of short-term borrowing. Secondly, firms in strong financial condition issue commercial paper during downturns in order to extend credit to other firms which may include customers of the firm. As the economy weakens, customers pay their bills more slowly and firms may extend more trade credit as a means of financing their customers short-term credit needs. There is evidence that commercial paper is used to finance trade credit. Finally, increased commercial paper issuance is used to finance inventories. Further, they established links between growth of commercial paper in relationship between the paper market and the commercial bank portfolios. At various times the growth of the commercial paper market was attributed to – (i.) Banks with weak loan demand that were searching for an alternative asset. (ii.) Regulatory constraints that made bank deposits unattractive. (iii.) Market conditions that made bank loans relatively expensive. 2.5 According to John P. Judd (1979) The researcher argues that commercial paper market has replaced the banking sector as the primary source of short-term funds for large financially sound nonfinancial firms. Banks can compete effectively only if the value of the intermediate services that they provide to the lenders/borrowers is greater than the spread between the lending and borrowing rates that they must charge to cover the costs of doing business and absorbing risk. However, it was found that the value from the intermediate services were relatively small and hence the switch over to commercial paper. 2.6 According to Pu Shen (2003) Before the current drop in commercial paper outstanding there was a past occurrence in 2002 when the market for nonfinancial paper declined rapidly. The author tries to understand the factors that led to the unusual decline. To achieve this he considered the factors that could have reduced the supply of credit as well as factors that could have reduced the demand in the commercial paper market. On the basis of this analysis, a conclusion was reached that both demand and supply contributed to the decline. Supply in this context means willingness of the investors to participate in the market. Willingness can be reduced by two factors – Actual or perceived deterioration of the creditworthiness of borrowers and general reduction in investors tolerance for risk. On the demand side, two factors reduce the need for corporations to borrow in the commercial paper market. One factor is decline in inventories which reduces companies short-term financing needs. The other factor is a switc h by firms from borrowing short-term in the commercial paper market to borrowing longer in the bond market. 2.7 According to Dan Covitz Chris Downing (2002) A model is created to explain the relationship between short term and long term yield spreads. Short term spreads cannot be explained by insolvency model because of large spread. Many a times short and long term spreads are negatively correlated. Their explanation for observed risk spreads rests on a distinction between the fixed and liquid assets of a firm. A simple model was proposed in which a firm with a low level of liquid assets may be forced to turn to outside sources of funds to meet its short-term obligations. Funds raised from outside can bring in delay in payments to creditors, which can affect the short term creditors more than long term creditors. Variety of insolvency-risk and liquidity-risk proxies were used and was found that liquidity risk help explain short-term spreads during periods of market stress, but explains very little about long-term spreads. Their empirical findings indicated that while liquidity is an important determinant, the credit risk is the dominant determinant of Commercial Paper credit spread. A literature survey regarding Asset Backed Commercial Paper (ABCP) was conducted, but was disregarded as it was not relevant to the research at hand. A working group has recommended that ABCPs be introduced to deepen the commercial paper in India. Following this the RBI issued the draft guidelines on securitization of standard assets on April 4, 2005. Chapter 3: Methodology Research basically means a quest for knowledge. The primary purpose for applied research is discovering, interpreting and the development of methods and systems for the advancement of knowledge on a wide variety of scientific matters (Wikipedia.com).In this chapter the methodology and methods to be used for analyzing the commercial paper market are briefly discussed along with the problems encountered and the steps that were taken to overcome them. 3.1 Types of Data There are broadly two types of data that are available at the disposal of a researcher. 3.1.1. Primary Data We may rely on primary data if the research calls for raw data that has been collected at the source and has not been subject to any manipulation. Primary data can be qualitative or quantitative. The core benefit of this type of data is that the researcher can exercise a high degree of control over the method and tailor the data collection methods to suit the needs of his research. 3.1.2. Secondary Data Primary data collected by one person may become the secondary data of another. Secondary data has many benefits that make it very appealing. The most obvious advantage is that the data is very economical since the cost of collecting it is usually very little when compared to primary data. It also saves the time of the researcher which would otherwise have been spent on the data collection process. Another key advantage is that in the process of searching for data relevant to the problem, the understanding of the researcher of the problem is improved and there can be changes in the idea in light of the secondary data collected (Beri, 2003). That is not to say that there are no limitations to it. The major risk undertaken by the researcher when collecting secondary data is that the accuracy of the data is compromised. Subsequent problems may be the availability, relevance and sufficiency. Our research relies on secondary data specifically the commercial paper rates published by the Reserve Bank of India and The Federal Reserve. Since these institutions are the apex central banks of India and United States of America respectively, we assume that the data provided by them is highly accurate and can be safely used in our study. Internet Research. As the name implies, it is the practice of using the World Wide Web for research purposes. After identification of our topic, we had to undertake an internet research to gain more background information about it and further our understanding of the topic. Several newspaper articles published on the internet was used to draw a rough chronology of the events in both the Indian U.S. commercial paper markets during the period of study. 3.2. Time Period The financial crisis was well underway during the early half of 2007 due to subprime mortgages default. We have divided the time period of our study into two distinct frames to analyze and draw logical conclusions. 3.2.1 First Time Period (November 2007-October 2008) We have selected November 2007 as the initiation point of the first time period our study due to the fact that the stock markets in America was in turmoil and falling rapidly. Leading up to this point there were certain major market developments, the LIBOR (London Interbank Borrowing Rate) reaches its highest level since 1998. Northern Rock collapses and receives emergency support from Bank of England. Major Banks such as UBS and Citigroup announce losses numbering in the billions due to subprime mortgage defaults. September 2008 was a very dynamic and crucial month in the context of the financial crisis. U.S. government bails out mortgage lenders Freddie Mac Fannie Mae, which hold almost half of all outstanding mortgages in the U.S. Bank of America proposes to take over Merrill Lynch for USD 50 billion. Lehman brothers files for bankruptcy making it the biggest corporate bankruptcy ($ 639 billion) in the history of U.S.A. Morgan Stanley Goldman Sachs loses their status as investment banks. They become traditional commercial banks (Mauro F. Guillà ©n, 2009). The first time period concludes on October 2008. The reason we have selected this particular month is that in the aftermath of Lehman Brothers bankruptcy, the commercial paper market contracted severely. Investors lost their confidence and companies were finding it difficult to make fresh issues of commercial paper. 3.2.2 Second Time Period (November 2008-November 2009) For companies that use commercial paper as a short-term funding mechanism, a sudden stoppage of access to the market will push them to the brink of bankruptcy. The Federal Reserve recognized this and initiated the Commercial Paper Funding Facility towards the end of October 2008. The major objective was to stabilize the commercial paper market and provide the necessary funding to the companies. Our second time period picks off from this point and continues till present. 3.3 Statistical Techniques Statistics is termed as the science of making effective use of numerical data. It deals with all aspects of it including collection, analysis and interpretation of such data collected. To facilitate our analysis, we had to rely on certain statistical tools and the software SPSS. 3.3.1 Measures of Central Tendency The most commonly used tool for understanding ‘averages is the arithmetic mean. A single value which is a representation of the entire mass of data taken into calculation. It is neither the highest nor the lowest value in the data set. It takes into account all the values in the study. It is in essence a single value around which the other variables in the study tend to cluster. The arithmetic mean is also laden with a certain disadvantage namely the tendency of the mean to get unduly affected by the presence of extreme values. 3.3.2 Measures of Variation Using mean will only supply us with a single figure representing the entire data. We cannot understand the dispersion of the values from the mean. To overcome this obstacle, we need to use a measure of variation. We have decided to study the variation utilizing the tool ‘standard deviation. Standard deviation helps us to measure the risk associated with commercial paper. Standard deviation will be equal to zero when all the numbers in the sample are very close to one another. The more dispersed they are the greater will be the standard deviation. 3.3.3 Correlation Mean and standard deviation does not allow us to compare two different variables. In such a scenario we may use correlation to understand if any relation exists between two variables. If relation is proved, correlation further helps us to judge to what degree the relation is present and the significance of it. The correlation coefficient ‘r ranges from -1.0 to +1.0. The closer ‘r is to either poles, the higher the correlation. Towards +1 indicates a positive correlation whereas closer to -1 is an indicator of negative correlation. 3.3.4 Simple Bar Diagrams/ One-dimensional Bar diagrams Simple bar diagrams are considered to be the most commonly used diagrammatic representation of data. Only the length of the bar matters, the width of a single bar is present only for drawing attention to the figures and making clear cut conclusions. We have used bar diagrams to depict the trend of commercial paper outstanding in both the Indian U.S. commercial paper markets over the period of study. 3.3.5 Times Series Graphs We have utilized time series graphs to chart the movement of risk across the time period of study. The reason for the selection of this technique is due to its usefulness in giving a quick idea about the trend of the variable over a period of time. The other added advantage is that it allows a comparison of two variables also across the time period. Chapter 4: Findings Analysis 4.1 Introduction In this chapter, we attempt to make a systematic analysis of the secondary data that we have collected from Reserve Bank of India Federal Reserve System. The raw data was transferred to Microsoft Excel software after proper scrutiny. The data was analyzed by using the statistical tools present in the Microsoft Excel SPSS programmes. As we have described earlier in the methodology, descriptive statistics like standard deviation, arithmetic mean and inferential statistics like correlation were used to analyze the data. Data presentation tools like Simple bar diagram and Time series graphs were utilized to present the data logically and in an understandable manner. The discount rates provided by RBI consisted of low high rates. The average of the discount rates was calculated to make a meaningful analysis and enable comparison with the U.S. commercial paper discount rates, since the Federal Reserve provides only a single rate. Moreover in the U.S. the commercial paper market is sub-divided into two broad strata, i.e. financial and non-financial commercial paper. Both of these were taken into account to enable the study to be more comprehensive and significant. The U.S. commercial paper outstanding amounts were converted into Indian rupees on the basis of foreign exchange rate prevalent in the time period of study. This was conducted on a month wise basis from November 2007 till November 2009. 4.2. Analysis of Data The following section contains an analysis of the data. 4.2.1 The first analysis conducted was to trace the movement of discount rate in India during the first time period. Table.1. Mean Standard Deviation of Indian Discount Rate during November 2007- October 2008 Mean 10.9242 Std. Deviation 1.70208 Interpretation 68% of the time, the average discount rate shall vary between 9.6 and 12.6. That means for nearly 8 months of the study period, the rate of return of commercial paper in India will be between 9.6 12.6 95% of the time, the discount rate shall vary between 7.5 and 14.3. The overall trend from the observed figures indicates forward direction. The cause behind this trend maybe the accelerated inflation rate. The investing communitys confidence levels are weakened, as a result the expected levels of discount rate also increases. Another reason may be that the investors are worried about the exposure of Indian banks to U.S. subprimes. For instance ICICI exposure to Citibank Asset backed securities is one important reason behind uncertainty in Indian money market segment. Graph.1. Movement of discount rate during Period 1 Interpretation Until December 2007, the discount rates did not undergo much fluctuation. From January 2008 till April 2008, the rates were subject to wide changes the average rate reached heights like 11.88 and depths of 8.73. In March, the market on expectations of a promising RBI credit policy announcement has shown an upward surge. But the RBI maintained the status quo, the bank rate, the repo rate and the reverse repo rate were unchanged. Following this the returns show a decline and thereafter it has shown a rising trend till October 2008. Corresponding to this period, the inflation rates in India had also been growing at an accelerated pace. The inflation in India during March was 5.11%, this shot up to 12.63% in August and declined to just 10.72% by October end. If the inflation rate increases, the nominal interest rates also increases, as a result commercial paper discount rate is also showing an increase. The discount rate rose to an all time high of 14.23 in October 2008.This abnormal rise in discount rates may be linked to Lehman Brothers declaring bankruptcy in U.S.A. on September 15, 2008. Because of the bankruptcy, the investors have lost their confidence on money market instruments. This event might have triggered investors in the Indian commercial paper market to seek higher discount rates on the Indian commercial paper. As a result pushing up the discount rates on commercial paper issued by the Indian corporate sector. 4.2.2 This analysis deals with the movement of discount rate in

Binding Arbitration Clauses :: essays research papers

First off, I do not think that binding arbitration clauses should ever restrict the arbitration to only one group of people (ex. Home builders association). If there ever is a situation in which a binding arbitration clause is acceptable, there should at least be a choice of who the arbitration is and the choices should be neutral parties (ex. In the BP credit card bill stuffer, it gave the option of the American Arbitration Association, JAMS, and the National Arbitration Forum). I do not think that binding arbitration clauses should be includable in employment contracts. There are too many laws and regulations regarding employers and the way businesses operate the I do not think an arbitrator would be anywhere near as knowledgeable in these matters as a court would be, even if it was their area of expertise. Between discrimination and work conditions, I feel that there is way too much at stake to put in the hands of an arbitrator. I do think that binding arbitration clauses can (no t should, but CAN) be includable in credit card agreements and cell phone agreements. I really do not think that binding arbitration clauses should be included in any kind of contract because the severity of charges can vary so much that the courts can decide which cases can be arbitrated. In both credit card and cell phone contracts, the majority of cases will only deal with small amounts of money. In contrast, there is so much at stake with home construction, that I do not think that construction contracts are an appropriate place for such clauses. I consider myself a pretty compassionate person. Therefore, I do not think that there should be ANY prerequisite to obtaining medical treatment, especially signing a contract with a binding arbitration clause.   Ã‚  Ã‚  Ã‚  Ã‚  I believe that every contract should have the option to be enforced by the courts. Arbitration should be something that parties agree to, not something they are forced into. I think that including a binding arbitration clause in an employment contract would produce undue influence. The applicant for employment may easily think that if they do not sign the contract that they will not get the job. In addition, since you would typically only sign an employment contract after you had been offered a job, it would be a bit harder to find another employer in a good amount of time.

Managing human capital

IntroductionIn the bulk of administrations people are now the premier plus. The cognition, abilities and accomplishments have to be set up and used to the maximal consequence if the administration is to make value. Nowadays, organisations are invariably altering as a response to the concern environment with each clip being more demanding and competitory. Primary purpose for companies is to go more flexible by following a successful scheme. How the company adapts to the alteration and how prompt it happens can guarantee its topographic point within the game. Responsiveness, adaptability and flexibleness are the key. Harmonizing to, Turner, Keegan & A ; Hueman ( 2006:317 ) , for an administration to be effectual and successful, the human resource direction maps must be integrated into the assorted organizational scheme Human resources are defined as the pool of human capital under the house ‘s control in a direct employment relationship, and HR patterns are the organizational activities directed at pull offing the pool of human capital and guaranting that the capital is employed towards the fulfillment of organizational ends ( Wright et al. , 1994 ) .Hrm FunctionThe HRM Function plays the function of the taking attention of the human capital in the organisation. The HRM Function is responsible for the procedures, which allow the organisation to remain competitory on the external market and internally efficient. By and large, the function and duties of the HRM Function are defined good in theory, but the world can be different from the organisation to the organisation. The investings needed to maintain the current staff and the competition on the market normally define the resort area for the HRM Function. The HRM Function is responsible for the undermentioned countries in the organisation:RecruitmentCompensation and BenefitsPerformance ManagementTrainingReportingLeadership DevelopmentPersonal AdministrationLegal Compliant ProcessesIn recent old ages, HRM involvement has grown in the country employee ‘s ability and public presentation. Among academics public presentation assessment defined as a structured system of mensurating, measuring and act uponing an employee ‘s occupation related properties, behaviors and results to happen out what degree employee is soon executing on the occupation. ( Kramer & A ; macgraw & A ; schuler 1997 ) that is: how productive the employees are and whether they can execute more efficaciously in the hereafter it is a dynamic and multidimensional procedure ( Latham & A ; wexley 1981, Carroll & A ; schneirer 1982 ) Harmonizing to Dessler ( 2005 ) public presentation assessment is a cardinal affair in the HRM because it helps to organisations about the employee with feedback, development and inducements required assisting individual eliminate public presentation lacks or to go on to execute above par. In twenties century account of public presentation assessment has been extended new positions. Generally human resources directors say that mensurating public presentation helps to acquire information about employee ‘s demand and making but since sing public presentation assessment get an of import portion of HRM. harmonizing to Heyel â€Å" it is the procedure of measuring the public presentation and makings of the employees in footings of the demands of the occupation for which is employed for intents of disposal including arrangement, choice for publicities, supplying fiscal wagess and other actions which require differential intervention among the members of groups as distinguished from actions impacting all members equally.† ( s.Chand 2000 )From Performance Appraisal To Performance ManagementWhile the thought that assessments should better employee public presentation is already accepted and we know that it is non new. Many directors of companies set up their procedure in tree measure. They are _ of puting ends, _ preparation employees, _appraising and honoring them. During the period of procedure it calls public presentation direction. By and large public presentation direction as a procedure that back uping to company ‘s strategic purposes. All these definitions conduct that public presentation assessment takes a function in a procedure. employee ‘s ends and work are related to company ‘s end. That is why develops the employee ‘s capablenesss, and evaluates and wagess the person‘s attempt besides company ‘s benefit in new vision of human resources direction.Performance DevelopmentPerformance direction scheme is related with employee development. Purpose of public presentation direction is developing employees who are effectual in their work besides seek to better public presentation when employees are non executing every bit good as they should ( Campbell, and Lee, 1988 ; Farh, et al. , 1991 ) The feedback is a chief point which given during the public presentation rating procedure identify, employees failings every bit good as chances for accomplishment development. It is clear that the intents of en effectual public presentation direction system are link employee activities with administration ‘s strategic ends, provide valid and utile information for administrative determinations about employees and give employees utile developmental feedbackSHRMstrategic human resource direction has been defined as â€Å" the linking of human resources with strategic ends and aims in order to better concern public presentation and develop organisational civilization that surrogate invention and flexibleness â€Å" ( Siddharth Chatuvedi ) Strategic Human Resource Management ( SHRM ) is one of the most powerful and influential thoughts to hold emerged in the field of concern and direction. It is besides applied by some policy shapers at have drawn upon the thought of SHRM to advance a high public presentation workplaces and human capital direction. Research workers in the field of strategic human resource direction have emphasized that human resource ( HR ) patterns may take to higher house public presentation and be beginnings of sustained competitory advantages ( Wright, Dunford, & A ; Snell, 2001 ) . SHRM impact how organisations are changed, and how they perform. It besides affects how employees are treated, security of employment and the nature of employment. SHRM trades with organisational public presentation and systems of patterns and HRM trades with a single employee public presentation and single HRM patterns. The function of SHRM or HRM is to set up a system of HRM patterns that transforms a house ‘s employees from trade goods that provide negligible competitory advantage and average work public presentation to human assets and prolonging the heightened work motive, expanded occupation chances, and alone accomplishments, cognition and abilities. When a house is be aftering to modify or do a advancement of invention, the best applied scheme is the research-based-review that will decidedly be utile to the SHRM/HRM.Strategic HRM And Human Capital ManagementA figure of authors have argued that strategic HRM and human capital direction ( HCM ) are one and the same thing, and so the construct of strategic HRM lucifers that of the broader definition of HCM rather good as the undermentioned definition of the chief characteristics of s trategic HRM by Dyer and Holder 1998 shows5:Organisational degree – because schemes involve determinations about cardinal ends, major policies and the allotment of resources they tend to be formulated at the top.Focus – schemes are business-driven and concentrate on organizational effectivity ; therefore in this perspective people are viewed chiefly as resources to be managed toward the accomplishment of strategic concern ends.Framework – schemes by their really nature provide uniting models which are at one time wide, contingency-based and integrative. They incorporate a full complement of HR ends and activities designed specifically to suit extant environments and to be reciprocally reenforcing or interactive.Theory Applied To The SHRM/HRMThe human resource direction patterns fundamentally include the procedure of enlisting and keeping. To supply the farther apprehension, the Grounded Theory will take the SHRM/HRM to make end of employee enlisting and keeping. The application of grounded theory provides the recruiters and human resource professionals to hold a better apprehension in the employment alterations.Application Of Two ModelsA. Guest Model Of HRMThis type of theoretical account that was introduced by David Guest has six dimensions of analysis for HRM. It summarizes the HRM schemes, HRM patterns, HRM outcomes, behavior results, public presentation results, and fiscal results. The thought of this theoretical account is based on the cardinal elements of the HRM attack, such as committedness that have a direct relationship with valued concern effects.B. Compensation And WagessThis method might be usage and besides be more effectual in the employment relationships, scheme, and direction that can ensue for a better apprehension on strategic human resource direction systems. As a sort of motivational attack, employees can be more competitory hypertext transfer protocol: //ivythesis.typepad.com/term_paper_topics/2009/10/shrmhrm-models-a nd-theories.htmlMaking A High Performance WorkplaceHow Can HR Help To Implement High Performance Work Practices?HR aid to implement high public presentation work patterns by making a civilization whic is supportive of high public presentation, by act uponing attitudes ( HR can assist put up benchmarking visits to organisations which are accomplishing outstanding consequences through people ) , by planing and implementing HR procedures which support the concern scheme ( hr procedures such as wages systems need to be aligned to the new ways of working. In order to present high public presentation working there are a figure of cardinal features of high public presentation workplaces:Employees are extremely skilledEmployee motive and committedness are strongOccupations are good designed and functions fit together goodOpportunities are provided for people to take part in bettering how they do their workStrong cultural values underlie how people work together and do determinationsStructures are expeditiously organisedThe necessary tools and resources and physical environment are providedMaking this happen requires a combination of two cardinal elements on a high degree:Having a work force of gifted and motivated peopleHaving a extremely effectual system through which work is organised and people are recruited, managed and developedCardinal Stairss To Have A High Performance In WorkplaceThere are basically two parts to presenting high public presentation working. The first portion is all about seting the basic enablers in topographic po int. The 2nd is transforming how work is done to guarantee top public presentation twenty-four hours in, twenty-four hours out. First, it is of import to acquire the rudimentss in topographic point, as follows: Choice: enrolling the best people, utilizing techniques such as psychometric testing and competency-based interviewing to do certain campaigners are accurately screened Prosecuting new starting motors: supplying utile initiation with support at manus and a clear debut to ways of working and civilization Development: analysing development demands of persons and squads in footings of both proficient and ‘soft accomplishments ‘ , and supplying relevant preparation and development to run into any spreads Pay and benefits: supplying a competitory salary bundle or contract rate to procure good quality employees, with sensible warrants of employment security. Performance direction: guaranting both persons and squads as whole have clear aims and are managed consequently, honoring excellence and covering with under-performance Diverseness: holding a good mix of accomplishments, backgrounds and types of people brings a comprehensiveness of thoughts and improved problem-solving Work environment: ensuring resources are in topographic point so that the tools, equipment and installations to back up high public presentation working are in topographic point and people have what they need to make the occupation good Accurate information: holding clear informations on the both the costs of using people, who is making what and the benefits they contribute to the programme or undertaking Transforming into a high public presentation workplace requires non merely the right support systems, nevertheless, but concentrating on how people work together, in peculiar: Leadership: most people react best to leaders who connect with them and are n't hierarchal in their attack. This means acquiring ‘back to the floor ‘ and disbursement clip with people at all degrees, including frontline operators, clients, support staff and other directors. Then a clear way demands to be set and pursued smartly, presenting on promises and animating assurance in staff Team-based working: squads need to hold clear undertakings, be measured as a squad instead than persons and tantrum good with other squads. Functions within a squad should be complementary, clear and interdependent. Where these standards are met, squads are extremely effectual in presenting consequences with limited monitoring, far more so than persons working independently. Flexible constructions: understating the figure of direction degrees and differences of position has important impact on two degrees. First, lines of communicating are quicker and more fluid between whoever is taking a programme and different people presenting cardinal undertakings. Besides, with few center directors, the undertaking direction operating expenses are kept to a lower limit. Communication: seasonably, unfastened and honest communicating with all staff, avoiding a ‘need to cognize ‘ civilization, is priceless in guaranting good determinations are made and errors avoided. This is besides critical for people to experience valued, as they are in the cringle and trusted. Engagement: one of the biggest countries of chance loss in many undertakings is deficiency of engagement of squad members in determinations, be they big or little. Normally the people making the frontline undertakings are those who know best how things can be improved or made more efficient. Supplying regular unfastened forums and sometimes confidential channels to raise issues are critical to acquire people involved in doing the whole undertaking work better. Making this takes up some clip but constantly leads to break consequences and nest eggs downstream. Continuous invention: high acting workplaces are continuously happening new and more effectual ways of presenting their ends. This does n't intend eternal clip wasted navel-gazing. It does intend high quality communicating and engagement being used to good consequence – to do things work better and ever maintaining an oculus unfastened for chances. The function of the leader in enabling this is important. Good inventions need to be implemented. ‘No ‘ should be a word that is non heard often!By Alan Bourne, Chartered Occupational Psychologist 2007Example From CompaniesStarbuck ‘s, Boeing, Wal-Mart, Mc Donalds, Samsung and Turkish Airlines are leaders in their industry and have been making concern successfully. During the research on their Human Resource Management ( HRM ) , I have seen their successes are steadfastly related to their effectual and efficient HRM schemes. There are many factors in common among these five companies ‘ HRM schemes: devotednes s to employees ‘ benefits, employee preparation, a diversified work environment, publicities and wagess system, friendly and healthy workplace and outsourcing chances. Starbuck ‘s concern has been hiking twelvemonth by twelvemonth. For many people that have had Starbuck ‘s java, they may detect that Starbuck ‘s client service is outstanding. Every client is treated like a VIP and with high quality service. Starbuck ‘s provides its direction squad and employees developing to assist them better understand its concern procedure. Besides, Starbuck ‘s offers a broad scope of occupation chances for people to develop their potency. Boeing, world-famous aeroplane shaper, provides the most advanced and diversified employees benefits I have of all time known. Boeing knows handling employees liberally will convey more net incomes and competitory advantage. In add-on, Boeing provides a bright and clear calling growing way for its employees, and it will decidedly add to their assurance and attempts working at Boeing. Wal-Mart is the largest private employer of African-Americans and Hispanics in the United States. Different civilizations, backgrounds, and moralss have become Wal-Mart HRM ‘s nucleus issues. Wal-Mart embracings diverseness at all degrees in its organisation. Wal-Mart besides has an Open Door Policy in which every associate is encouraged to convey any suggestions to their supervisor. Wal-Mart ‘s advanced and effectual HRM schemes make it such a successful company. McDonalds believes that â€Å"training is the foundation of their success and vital for bettering the business† . Hourly paid staff receive on the occupation preparation, supplemented by computing machine based and other preparation methods, Management staff receive preparation at one of the company ‘s six British preparation Centres. McDonalds has a high ‘turnover ‘ of staff, proposing the enlisting scheme is inefficient. Incorrect occupation advertizement perchance leads to the entry of applications by the incorrect type of individual. Samsung ‘s scheme can be described as an attempt to systematically run into clients ‘ demands across three critical dimensions-quality, time-to-volume, and being easy to make concern with. The company is invariably altering and reinventing itself in support of these ends by design in Samsung ‘s HR direction systems. Recently the house has collected some informations about why people in high tech came to ( and stayed at ) Samsung. It was found that â€Å" interesting work † and the quality of the work environment were cardinal properties. Samsung develop a batch of classs for Samsung staff to larn, and give them chances to travel outside to larn. E.g. : The design halfway staff can travel abroad or have opportunity to work with celebrated endowments. Samsung has identified the development and care of an Extraordinary Environment as a cardinal driver in the execution of its competitory scheme. Turkey Airline is one of the market leaders in the flight industry.The Company has got jobs which include hapless communicating and deficiency of information flow between the assorted sections, headhunting of cardinal staff members by rivals, weak organizational construction, weak wages scheme and organizational civilization. To work out this issue, The company has adopted a figure of human resource direction schemes of late. At Turkish air hoses direction has created a conductive environment, with more workers engagement, calling sequence planning, calling relevant preparation, public presentation wages systems, greater chances for higher functions, occupation satisfaction, trust and committedness to heighten employee committedness and satisfaction. Bacardi-Martini is a celebrated and reputable drinks maker with the strongest success rates with respect to the study conducted by ‘The Sunday Times 100 Best Companies to Work For ‘ . One of the chief factors that fuels their success, and continues to drive the company are the productiveness, answerability, creativeness and teamwork. The company readily recognises that its success will merely go on if the staff are committed, loyal and happy in their work. Therefore, Bacardi ‘s staff development attack is taken really earnestly, and they go to guarantee that the household ambiance is used through the operations of the company Examples of these benefits include free hot repasts at the eating house, private wellness attention, life insurance, athleticss installations, helplines and so on. All of these benefits are non merely offered to the employee, but besides the employee ‘s household members or live-in spouses. hypertext transfer protocol: //www.clms.le.ac.uk/publications/workingpapers/working_paper50.pdfDecisionHarmonizing to Gilbreath ( 2008 ) , making strong HRM policies requires making a strong psychological environment in which employees can boom. Such an environment requires carry oning stress audit, supervising the work of the environment, fiting people and work environment and utilizing squads of employees and research workers to analyze the work environment. Gilbreath, B. , ( 2008 ) . This paper has examined the propositions of the SHRM positions of HR patterns and their part to sustainable competitory advantage. The nexus between HR patterns and house public presentation has been established and from a resource-based position One of the primary decisions from this survey It is utile for all administrations to direction their people within a planned and coherent model which reflect the concern scheme. They can guarantee that the assorted facets of people direction are reciprocally reenforcing in developing the public presentation and behaviors necessary to accomplish concern success. There is non individual HRM scheme that will present success in all state of affairss. Administrations need to specify a scheme which is alone to their ain state of affairs in footings of context, ends, and the demands of organizational stakeholders. hypertext transfer protocol: //www.cipd.co.uk/subjects/corpstrtgy/general/strathrm.htm

Quain Lawn and Garden, Inc. Case Analysis Essay

After a false retirement Bill and Jeanne Quain realized their destined action in the plant and shrub business. The need for a high-quality commercial fertilizer prompted the innovation of a blended fertilizer called â€Å"Quain-Grow†. Working with chemists at Rutgers University, a mixture was constructed from four compounds, C-30, C-92, D-21 and E-11. Specifications (i.e constraints) for the mixture demanded that Chemical E-11 must constitute for at least 15% of the blend, C-92 and C-30 must together constitute at least 45% of the blend, and D-21 and C-92 can together constitute no more than 30% of the blend. Lastly, Quain-Grow is packaged and sold in 50-pound bags. The objective of this analysis is to determine what blend of the four chemicals will allow Quain to minimize the cost of a 50-lb bag of the fertilizer. To do this we have used Linear Programming (LP) – a technique specifically designed to help managers make decisions relative to the allocation of resources. In this case, C-30 = , C-92 = , D-21 = , and E-11 = . The constraints for this case were translated into linear equations (i.e. inequalities) to mathematically express their meaning. The first constraint  that C-11 must constitute for at least 15% of the blend can be expressed as: . The second constraint that C-92 and C-30 must together constitute at least 45% of the blend can be expressed as: . The third constraint that D-21 and C-92 can together constitute no more than 30% of the blend can be expressed as: . Lastly, the fourth constraint is that Quain-Grow is packaged and sold in 50-lb bags can be expressed as: . These equations were obtained and entered into a POM LP a s a minimizing function. The objective function of this case was calculated and expressed as . These results show that we can recommend the following ratios of C-30, C-92, D-21 and E-11 respectively so that the cost of a 50-lb bag of fertilizer is minimized: 7.5 lbs, 15 lbs, 0 lbs and 27.5 lbs. In checking to see if these align with the given restraints we found the following to be true; ; ; and . The actually cost result of this minimization analysis was calculated to be $3.35 per 50 lb bag of fertilizer. The equation for this result is as follows: . Additionally, we performed a sensitivity analysis to project how much our recommendation may change if there are changes in the variables or input data. This type of analysis is also called postoptimality analysis. There are two approaches to determining just how sensitive an optimal solution is to changes: (1) a trial-and-error approach and (2) the analytic postoptimality method. In this case analysis we used the analytic postoptimality method. After we had solved the LP problem, we used the POM software to determine a range of changes in problem parameters that would not affect the optimal solution or change the variables in the solution. While using the information in the sensitivity report, it is pertinent to assume the consideration of a change to only a single input data value at a time. This is because the sensitivity information does not generally apply to simultaneous changes in several input data values. Our main objective when performing this analysis was to obtain a shadow price (or dual value) –  the value of one additional unit of a scarce resource in LP. In any scenario, the shadow price is valid as long as the right-hand side of the constraint stays in a range within which all current corner points continue to exist. The information to compute the upper and lower limits of this range is given by the entries labeled Allowable Increase and Allowable Decrease in the sensitivity report. Our results from the sensitivity analysis were produced in two parts. The first shows the impact of changing the objective function coefficients on the optimal solution and gives the range of values (lower and upper bound) for which the optimal solution remains unchanged. The second part of the report shows the impact of changing the R.H.S of the constraints of the objective function value, with the help of Dual Value (Shadow Price), with the lower and upper bounds for which the shadow price is valid. Lastly, these results explain that the price of C-30 can vary within the range of .09 to Infinity without affecting the optimal solution. Likewise the range for C-92 is between –Infinity and .12, the range for D-21 is between 15 and 42.5, and the range for E-11 is between 30 and Infinity. The second part of this sensitivity analysis show the ranges for which the shadow prices are valid. Constraint 1 has a dual value of 0 and is valid between –Infinity and 27.5. Constraint 2 has a dual value of -.08 and is valid between 15 and 42.5. Constraint 3 has a dual value of .03 and is valid between 0 and 22.5. Finally, Constraint 4 has a dual value of -.04 and is valid between 30 and Infinity.