Jointly determines the optimal level to which the mean of a critical variable should be set up, and the optimal number of repetitions until recalibration, for the case where the…
Abstract
Jointly determines the optimal level to which the mean of a critical variable should be set up, and the optimal number of repetitions until recalibration, for the case where the variable is distributed normally, the mean changes linearly with the number of repetitions, and the revenue per oversized and undersized item is unequal. Proves that the optimal set‐up level should be below the mid‐point between the specification limits by a distance which depends on the slope of change of the mean, on the recalibration cycle, and on a function of the per unit revenues, in such a manner that just prior to the recalibration the mean reaches a different distance above the mid‐point. Outlines a method for the numerical evaluation of the optimal number of cycle repetitions, and derives a general approximation formula which allows its closed loop determination. Provides a numerical example and sensitivity analysis.
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SHAUL P. LADANY and AVNER ARBEL
In many countries there is no free foreign exchange market. There exists an official exchange rate, and besides it — due to liberal law enforcement policies — a black market…
Abstract
In many countries there is no free foreign exchange market. There exists an official exchange rate, and besides it — due to liberal law enforcement policies — a black market flourishes. One such country is Israel, where the black market exchange rate is commonly known, and the daily rate is published in newspapers. Since the establishment of the State several devaluations have taken place which raised the official exchange rate from IL0.333 per dollar in 1949 to IL6.00 in the middle of 1975. Except for the immediate periods after the devaluations the black market rate of exchange was significantly higher than the official one. However, while till 1962 the average difference between the two was about 45%, with a high variance of 36.3, it went down to less than 10% with much smaller variance of 11.2 since then. This reduction in the free market premium and its variability over time could partially be explained by more frequent changes in the official exchange rate, but part of it is probably a result of government intervention in the free foreign currency exchange market.