Applied economic Assignment Example | Topics and Well Written Essays - 750 words

Applied economic - Assignment Example Given that model 2 is the correct model, the Gauss-Markov theorem tells me that the model’s ordinary least square estimators are the best estimators under classical linear regression models. This implies that the coefficients are the best for the model and the R2 is the highest that the model can attain (Wooldridge 102). Suppose a test was conducted on the hypothesis at 15 percent level of confidence and a p-value of 0.119 obtained, the test result would mean that no significant relationship exist. This is because for a two tailed test, implied by the alternative hypothesis that ÃŽ ²1≠ -3, then the confidence level for the test is 0.075. The p-value is therefore greater that the confidence level and this means that the null hypothesis is not rejected. Conducting the test 10 percent level could change the conclusion on significance. This is because of the associated increment in confidence interval that could extend to cover the critical value. Assuming that Ram (2009) is correct in his model in which openness is a significant factor to government’s expenditure, then expected value of error term in the model that omitted the openness variable cannot be zero and the expression is not valid. This is because of effects openness that was factored in the error term and meant that what was perceived to be the error term was not error but effects of an unidentified variable. Even though both models leads to rejection of the null hypothesis, the greater absolute t-statistic from model two offers better evidence for rejecting the null hypothesis because it would ensure rejection of the null hypothesis at a greater level of precision than would model 1. The greater absolute value of the statistic in model two explains this because greater statistic than a reference value implies significance. Suppose population is added to model 1, then

Back to reality Essay Example | Topics and Well Written Essays - 2250 words - 1

Back to reality - Essay Example The primary focus of this paper, therefore, is to examine potential challenges that organizations may encounter while developing sourcing strategies and the issues they would need to consider developing relationships with key suppliers, and providing suggestions about how these problems might be addressed or mitigated. Background The firms in Europe and US often outsourced Asian countries with lower production cost such as china which is estimated to host over 6600 companies which have been outsourced there (Wright, 2009). As such, it is common to have a firm dealing with electronics, but it has subcontracted and outside source to handle the transport and logistics of the finished products to the market, another case can be a firm dealing with vehicles, but it only supplies the parts and subcontracts an outside source to deal with the assembling. This, however, does not come without challenges, a firms relationship with its suppliers is hence vital in promoting productivity and effec tiveness, having a third part supply resources or services that are critical in the final products of the firm requires considerable mutual trust and understanding. It is hence incumbent of any organization to apply the best and most practical sourcing strategies to meet their goals and objectives. Sourcing strategies by definition are the process an organization undertakes to ensure they have the best suppliers and they nurture the supplier relationships to maximize the value for the firm (Rendon, 2005). As such, most organizations have sourcing programs that are unique to their needs, services or the goods offered, notably while, some have deliberately puts these strategies others use them without being aware of it. Such is to say that organizations have sourcing strategy whether they know it or not, this is because owning to the nature of their business, over the year a firm will repeatedly uses the strategies that have proven successful in retrospect and by so doing will be foll owing a covert sourcing strategy. Like any other strategy, a sourcing strategy can be; â€Å"Strategic†, ergo effective, goal and objective oriented, on the other hand, depending on the competence of those managing the firm, it can be ineffective and inefficient. Naturally, each is an ideal extreme since no firm can be very efficient and neither can any firm be fully inefficient and yet continue to exist (Wheaton, 2008). As such, most strategies lie somewhere between with the best being closest to efficient and vice versa, sourcing program can either be â€Å"strategic† or meet its goals and objectives or it can be unproductive, ineffective, and poorly planned (Wheaton, 2008). Considering that the cost, quality and effectiveness of the goods or raw materials a firm is supplied with is directly reflected in its financial and operational results, it is only natural that thought and effort and time be devoted in the understanding of the various challenges that firms may e ncounter in the process and their possible solutions. Challenges and Solutions Creating Competition One of the considerations a firm needs to make before it commences any business transaction with supplies or outside sources is the potential for the supplier to become competition in posterity. This is because by taking these contracts,