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This article presents commentary from Lawrence Fisher about two papers in the current issue, "On the Pricing of Corporate Debt: The Risk Structure of Interest Rates" by Merton, and "The Economic Determinants of Systematic Risk," by Robichek and Cohn. He regards Merton's work as commendable, but wishes he would augment his model with a variable to represent transaction costs. In his view Robichek and Cohn address an important question, but their work is undermined by faulty statistical methods. The author describes six such flaws and proposes remedies for each.

The article looks at a study which explores organizational behavior for nonlinear relationships. The use of linear theories and statistics within research design is discussed. Examples of nonlinarity are given. Graphs displaying nonlinear relationships are presented. Correlations between the proportion of time spent on technical work and the level of performance are considered. The author notes the need for adequate supervision to meet productivity standards. It is concluded that the benefits of exploring nonlinear relationships justify the associated costs.

Acceptance sampling by exponential smoothing presents a concept whereby each lot is accepted or rejected through interrogration of the current lot and all prior lots submitted. The number of defectives of a lot, in conjunction with historical results, is transformed to a quality index by simple exponential smoothing, utilizing larger values of the smoothing constant to lend more weight to the quality of current lots inspected. This quality index is compared with a predetermined threshold index to determine if the lot is to be accepted or rejected. This quality index is then retained to be used as the historical quality information to be applied to the quality index of the next lot. An important feature of the exponential smoothing technique is that an attribute quality can be transformed easily into a measurement quality. This allows the user to select an acceptance quality level at any producer's risk. Further, the OC curve can be forced through any other point by selecting the proper smoothing constant. The obvious limitation in the use of this technique is that the transformed variable--quality index--does not follow a known statistical distribution. This necessitates that simulation methods be used on the digital computer to derive OC curves for specified values of n and α. However, for the conditions of large n and large α, the transformed random variable is approximately normally distributed, giving an approximate normal solution for a plan of interest. It is anticipated that attribute acceptance sampling utilizing any quality index other than proportion defective will be viewed with suspicion by the average user. In this sense the exponential smoothing concept violates a basic precept of Dodge (1955) in that an effective plan must be a simple plan that the non-theoretician can understand and apply with reasonable confidence. However, the flexibility in the selection of OC curves, the utilization of prior lot information, and the ease of application dictate that the concept be given serious consideration as a cost reduction tool in acceptance sampling. [ABSTRACT FROM AUTHOR]

This paper compares four major schemes used for forecasting mean demand to be used as input into an inventory model so that 'optimum' stockage levels can be obtained. The inventory model is the classical order up to S, infinite horizon model with carry-over from period to period and complete back-ordering. Maximum likelihood, exponential smoothing, standard Bayes and adaptive Bayes schemes are used and results, via Monte Carlo simulation, are obtained on the average costs per period for (1) stationary demand, (2) long-term trend and (3) 'shock' changes in mean demand. [ABSTRACT FROM AUTHOR]

Investigates the statistical basis for surface roughness assessment in oblique finish turning of steel components. Effect of tool wear on surface roughness; Identification of process variability; Application of the distributions modelled for setting control limits for sample means of surface roughness values.

The article compares the cost of several types of workfare and income maintenance programs, using data from the 1967 Survey of Economic opportunity and from cost studies of training and day care programs. During the 1960s, rapidly rising welfare rolls in the U.S. coexisted with affluence and decreasing rates of unemployment. As a result of these trends, there has been increasing emphasis in some quarters on helping welfare families attain self-sufficiency or, in other words, substituting workfare for welfare. Recent statistics indicate that 23 percent of the recipients in federally subsidized public assistance programs are aged, blind, or disabled. Aid to Families with Dependent Children (AFDC) accounts for the remaining 77 percent, but in 1971 only 19 percent of AFDC families included a father living at home, and some of those fathers were not able-bodied.

The article discusses how trend extrapolation method is being used in future research in physical education. Trend extrapolation is a method of forecasting or projecting the future by assuming that events which fashioned recent history caused a trend, and that that trend will extend into the future. Trend extrapolation is one of the most widely tool being used in forecasting the future. The author refers to the concept of leisure time to presents an example of how trend extrapolation can be applied in physical education.

Whenever a regression analysis is run, one of the key statistics which is reported is the coefficient of determination or, as it is more commonly known, R[sup 2]. This quantity represents the proportion of the variance of the dependent variable that is associated with ("explained by") the set of independent variables. However, this statistic is a biased estimate of the true coefficient of determination for the underlying population. Moreover, the bias in unadjusted R[sup 2] can be sizeable and may lead to serious misinterpretation of research results. The purpose of this note is to examine the magnitude of the bias in R[sup 2] and to discuss some of the properties of R[sup 2] adjusted for degrees of freedom, a statistic which is less biased than R[sup 2]. The properties of the unadjusted R[sup 2] are examined in the first part of this note. The second part describes the properties of adjusted R[sup 2] when adjustment is considered necessary. [ABSTRACT FROM AUTHOR]

In this paper, we present evidence that local trends do exist in the Standard and Poor's Index. We begin by assuming that the logarithm of the price at time t[sub 1], say log P(t[sub 1]), has an expected value which is a linear function of time. That is, E log P(t[sub 1]) = at[sub 1] + b where a and b are arbitrary but fixed constants. Then we use the techniques of the analysis of variance to test whether any constants in the expression above satisfy the data. The tests show that these data are not explained by such an expected value. We conclude that the mean is different (certainly more complicated than at[sub 1] + b) over different intervals of time. The changes in expected value over these intervals are referred to as local trends. Finally, by repetition of the tests for different interval sizes, we find that the tests are significant for interval sizes up to approximately one year but not longer. Thus the evidence suggests that the local trends, when they occur, do not last longer than this period of time. [ABSTRACT FROM AUTHOR]

This study analyzes the differential effects of management (management effects) and other selected variables on commercial bank profitability and the operating relationships through which these effects are transmitted and relative profitability determined. Management effects are the results of differences in bank management objectives, policies, decisions, and actions reflected in differences in bank operating relationships, including profitability. The operating relationships reflect (1) overall profitability and gross revenue; (2) funds-use measures (asset-management measures, including "returns" on the uses); (3) funds-source measures (deposit and capital measures, including "costs" of the sources); and (4) expense measures. [ABSTRACT FROM AUTHOR]

The author comments on the article "Credit Regulations and Consumer Buying," by Duncan McC. Holthausen. The author explains that he agrees with Holthausen on the importance of having adequate consumer credit statistics. In Holthausen's article he presents suggestions for improving the figures, which fall into four broad categories. The categories include the elimination of non-consumer credit items in the statistics, adding consumer credit items not covered, bringing benchmark figures up to date, and expand and improve the reporting samples used to project benchmark figures. The author critically analyzes these categories.

The article presents a critical evaluation of available consumer credit statistics. It is reported that there are three principal types of consumer credit statistics available on a regular or periodic basis as of May 1952. The first consumer credit statistics examined in the article are volume statistics, which are the regular monthly estimates of consumer credit outstanding published by the U.S. Federal Reserve Board. Volume statistics are also comprised of the individual trade reports on installment sales and collections, also published by the Federal Reserve Board, and many monthly and annual reports on credit granted and unpaid balances made available by trade associations and state and federal governments.

The article presents abstracts of articles about international marketing. They include "The Case for Better Statistics," "Foreign Operations of U.S. Industry," and "Spain's New Economic Plan: Its Meaning for U.S. Business."

Until recently the hardware store held a place of prominence among retail institutions, but it is gradually losing that important position. What has caused the retail hardware trade to experience this decline? What, if anything, can hardware retailers do to rectify this situation? The author examines statistical evidence to ascertain the need for some changes, and gives concrete suggestions as to what directions these changes might lead. [ABSTRACT FROM AUTHOR]

The techniques described in this article show how time series analysis can be used in sales forecasting. For several years experiments have been conducted in using time series analysis in forecasting sales at the Scovill Manufacturing Company, and considerable empirical data have been assembled. The techniques for anticipating sales, developed through these experiments, are described here. [ABSTRACT FROM AUTHOR]

Even where marketing statistics are available by 4-digit Standard Industrial Classification, their usefulness as an indicator of market potential is limited until the relationship between a special company market and the SIC has been clearly defined. A useful approach to the problem of defining this relationship is to begin with the product, as shown in this article. [ABSTRACT FROM AUTHOR]

This article examines critically the various problems of weighting probability-type samples, paying particular attention to those instances when no call-backs are made in the field. Deficiencies in the nights-at-home weighting procedure are analyzed, and alternative suggestions for minimizing many of the complexities of card weighting are presented. Much of the material is documented by extracts from a 30,000-interview national study during which technical experiments were tried. [ABSTRACT FROM AUTHOR]

The article discusses the results of a survey conducted by the task force of the Subcommittee on the Teaching of Marketing Research of the American Marketing Association to explore the relevance of marketing research courses against the actual work encountered in commercial applications. The article discusses the dual questionnaire survey, one for marketing research educators, another for marketing researchers in the industry. The article compares what is taught in universities and what is necessary in industry. The results found that industry researchers value problem-solving, communication, as well as business research and statistics courses. The authors attempt to reconcile the studies findings with ongoing debate within the field of marketing research.

The article seeks to define the relationship between per capita income and retail sales according to geographic location and to describe the limitations of income statistics when reaching these conclusions. The article distinguishes between the uses of income data, to both indicate standards of living and to determine markets for certain goods and services. The article reports a lack of correlation between the median income per family and retail sales per capita and shows the results of a study to prove this. The article compares the suburban and urban relationship of income and retail sales, but points out that while cities are largely self-sufficient (not closed), they too rely on markets beyond their geographic boundaries.