• Journal of Korean Society of Industrial and Systems Engineering
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• v.42 no.1
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• pp.137-142
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• 2019

There are two methods for evaluating two or more mutually exclusive projects. One is a total investment approach and the other is an incremental investment approach. The former can rank projects by the criterion of the net present value, but the latter can't do it. An incremental investment approach is only possible when all pairwise alternatives are compared. Thus an incremental investment approach is superior in ranking them over an incremental investment approach. To do so, a principle of comparison must be established. Comparisons of profitability are reasonable when operating the same amount of investment over the same period of time. One principle is that all projects are invested in the largest of the projects. Another principle is that all projects are invested during the longest project life of the projects. In this paper, even if the principle is followed, it will be shown that the external rate of return fails to rank them. However, the productive rate of return criterion would prove to be able to rank them like the net present value standard, provided that the principle of comparison is kept. In addition, rate of returns can be assessed so that all mutually exclusive projects can be compared at once, such as on the criterion of the net present value. That is, it can be also compared with many other returns, such as the profit rates on financial investments or real investments.

• 한국신재생에너지학회:학술대회논문집
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• 2008.10a
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• pp.162-162
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• 2008

• Journal of KIEE
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• v.11 no.1
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• pp.51-54
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• 2001

In this paper, a MW-Mvar investment technique focused on minimizing the system loss is presented. An optimization technique, in which the system loss is defined as the objective function and the power flow equations as the constraints, is introduced to obtain the Lagrangian multipliers λP and λQ. The Lagrangian multipliers imply the variation of the system loss with respect to incremental bus power and are used as MW-Mvar investment indices for minimizing the system loss. ΔP MW and ΔQ Mvar are invested, step by step, by the priority of λP and λQ index given for each bus. Derivation of the index uses the information from normal power flow calculation.

• Proceedings of the Korean Institute of IIIuminating and Electrical Installation Engineers Conference
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• 2006.05a
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• pp.365-369
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• 2006

It is concentrated on a methodology to establish a scheme of investment on power distribution systems of components. This paper provides a methodology to estimate the scheme as using a customer interruption cost regarding reliability indices in power distribution systems. The proposed method basically uses the failure rate depending on time for explaining the deterioration of a component. Therefore, the theory of the sensitivity is used for deciding the precedence of the investment to consider an effect of each component's failure rate on the system reliability. After Estimating the sensitivity on component investment cost making incremental reliability level is produced by component's investment cost accumulated according to the precedence of the sensitivity. After that, the failure rate corresponding with reliability level on the curve of investment cost is used as producing the curve of customer interruption cost. Two curves have the crossing point that is proposed to acceptable reliability level for customer and utility. In this paper, the acceptable reliability level for customer with the utility is assessed to analyze customer interruption cost and sensitivity of reliability indices. In conclusion the result of investment based on this method is shown to the reliability level with two cost.

• Asia Marketing Journal
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• v.15 no.3
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• pp.79-95
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• 2013

New product innovation is a process of embodying new knowledge in a product and technology licensing is getting popular as a means to innovations and introduction of new product to the market in today's competitive global market environment. Incumbents often rely on technology licensing to access new product opportunities created by other firms. Prior research has examined various aspects of technology licensing agreements such as specific contract terms of licensing agreements, e.g., distribution of control rights, exclusivity of licensing agreements, cross-licensing, and the scope of licensing agreements. This study aims to provide answers to an important, but under-researched question: why do some incumbents initiate more licensing agreement for exploratory learning while others do it for exploitative learning along the innovation process? We attempt to extend our knowledge of licensing agreements from an organizational learning perspective. Technology licensing as a specific form of interfirm linkages can be initiated with different learning objectives along the process of new product innovation. The exploratory stages of the innovation process such as discovery or research stages involve extensive searches to create new knowledge or capabilities, whereas the exploitative stages of the innovation process such as application or test stages near the commercialization are more focused on developing specific applications or improving their efficiency or reliability. Thus, different stages of the innovation process generate different types of learning and the resulting technological resources. We examine when incumbents as licensees initiate more licensing agreements for exploratory learning objectives and when more for exploitative learning objectives, focusing on two factors that may influence a firm's formation of exploratory and exploitative licensing agreements: 1) its past radical and incremental innovation experience and 2) its internal investments in R&D and marketing. We develop and test our hypotheses regarding the relationship between a firm's radical and incremental new product experience, R&D investment intensity and marketing investment intensity, and the likelihood of engaging in exploratory and exploitive licensing agreements. Using data collected from various secondary sources (Recap database, Compustat database, and FDA website), we analyzed technology licensing agreements initiated in the biotechnology and pharmaceutical industries from 1988 to 2011. The results of this study show that incumbents initiate exploratory rather than exploitative licensing agreements when they have more radical innovation experience and when they invest in R&D activities more intensively; in contrast, they initiate exploitative rather than exploratory licensing agreements when they have more incremental innovation experience and when they invest in marketing activities more intensively. The findings of this study contribute to the licensing and interfirm cooperation studies. First, this study lays a foundation to understand the organizational learning aspect of technology licensing agreements. Second, this study sheds lights on how a firm's internal investments in R&D and marketing are linked to its tendency to initiate licensing agreements along the innovation process. Finally, the findings of this study provide important insight to managers regarding which technologies to gain via licensing agreements. This study suggests that firms need to consider their internal investments in R&D and marketing as well as their past innovation experiences when they initiate licensing agreements along the process of new product innovation.

• Journal of Technology Innovation
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• v.8 no.1
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• pp.31-48
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• 2000

Nowadays the role of region has been increased, as knowledge, science and technology become important in economic development. This paper argues that a system approach is needed to enhance regional S&T capabilities. Under the this approach, we can identify a concept of regional innovation systems as sub-systems of a national innovation system. This paper investigates Korean regional innovation systems based on R&D budget of regional governments. According to this paper, Korean regional governments' R&D investment is very insufficient. There were no co-relationship between regional governments' fiscal autonomy from the central government and their R&D investment. This paper argues that such a poor investment will restrict the future development of Korean regional innovation systems. Therefore, this paper suggests some strategic options for the development of regional innovation systems as follows. First, regional governments should increase their R&D budget. Second, their R&D efforts should be related with their specific industrial sectors. Third, they should target not only to create new promising industrial sectors but also to enhance technological capabilities of existing sectors. Fourth, their target group should be small and medium-sized enterprises. Finally, regional governments should adopt small and incremental approach to improve their innovation systems.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.28 no.1
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• pp.134-139
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• 2005

There are two approaches for evaluating two or more investment projects. One is a total investment approach and the other is an incremental investment approach. We present that ranking projects by the latter is not sufficient for an investor to accept the next best alternative. We prove that ranking projects by the former is superior to that by the latter. We also prove that the ranks obtained by the criteria like ORR and B/C ratio are consistent to the ranks by DCF criteria. However the result is different when IRR is adapted.

• Environmental and Resource Economics Review
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• v.33 no.3
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• pp.203-239
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• 2024

The introduction of a regional differential electricity rate system is being discussed, and the LMP (Locational Marginal Price) method is mentioned as a promising alternative. Under this background, this study analyzed a mathematical model and suggests that the LMP method produces results that maximize social welfare. The analysis was conducted separately for long-term decision-making where transmission capacity can be expanded, and for short-term decision-making in which transmission capacity is given. The analysis for short-term decision-making was conducted for peak load situations where capacity is insufficient and for non-load situations with spare capacity. The results of the analysis suggested that the price to maximize social welfare is equal to the marginal power generation cost by region, and the difference in marginal cost by region reflects the value lost due to transmission loss and compensation for transmission network investment. In addition, if the transmission capacity is less than the optimal capacity, the compensation for transmission network investment exceeds the incremental cost, providing an incentive to invest in the transmission network. If the transmission capacity exceeds the optimal capacity, the compensation for transmission network investment becomes lower than incremental cost or zero and the investment is not recovered, suppressing the investment in transmission networks. The results are the same as the LMP method suggests, and this means that this method maximizes social welfare and provides an optimal transmission network investment signal. The above analysis results contribute to understanding the characteristics of LMP. In addition, this study discussed what changes are needed in the electricity market when introducing the LMP concept.

• Journal of Korea Technology Innovation Society
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• v.21 no.1
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• pp.454-490
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• 2018

This paper examined the nonlinear relationships between external knowledge sources and the innovation performance of SMEs (small and medium-sized enterprises). Using 3,218 firm-year panel data in South Korea, this study found that increasing the number of external knowledge channels out of the value chain increases radical innovation. Meanwhile, increasing the number of external knowledge channels within the value chain increases the incremental innovation. Further, the external sources of knowledge both out of and in the value chain had inverted U-shaped relationships on radical and incremental innovation respectively. This finding implies that a mechanism of diminishing returns works in the relationship between the external sources of knowledge and innovation. The study also identified the synergistic effects between the external sources of knowledge out of the value chain and within the value chain, and confirmed that the synergistic effects strengthen the linear mechanism between the external sources of knowledge and innovation. In addition, this study found that the sources of knowledge both out of and within the value chain positively moderate the relationships between R&D investment and radical innovation of SMEs.

• Journal of the Korean Professional Engineers Association
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• v.32 no.6
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• pp.40-43
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• 1999

The R&D productivity has the same meaning as that of general meaning. Its input includes budget, facility, schedule, idea and target, and its output includes patent, paper, technological innovation and revenue increase and technology accumulation influenced by these factors. The choice of R&D item which will have the large effectiveness after customization, resource input of proper level, application of efficient development schema, effective usage of development output, objective appraisal for the R&D output and extension for the future project are the main factors for which is suggested to enhance the R&D productivity. The management's expectation for R&D can be represented as the innovativeness of output and potential influence to outsiders. The speedy output, even if incremental investment more than planning happens, will eventually result in the productivity enhancement of the enterprise, and managers must not encounter the opportunity loss in return for the excessive investment control.