Table 1 SUMMARY OF COST OF FAILS AND INPUT CHANGES FOR ALTERNATIVE TRADE COMPLETION SYSTEMS NOTE: Delivery priorities are identified by a four letter group showing order of delivery for broker-to-broker, B; broker-to-institution, I; broker-to-cash customer, C; and broker repayment of a stock loan, S. Blank data spaces indicate that the input in the given alternative is the same as for the Benchmark case. The word "All" in the Partial Deliveries column means that partial deliveries were made to brokers and institutional customers but not to cash customers. II. FUTURE USE OF THE ANALYTICAL METHOD This report has presented a number of examples demonstrating how the analytical tools Rand developed can be used to evaluate alternative trade completion systems. Of the alternatives considered, some have been identified as promising much greater savings than others. There remain a number of other alternatives that can be evaluated by using the model and the related cost methodology. These studies can be done with only minor modifications in the methodology already developed by Rand. ble: In its present form the model can be used to Evaluate the effects on the industry and on firms of the chang- • Evaluate the effects of changes in the extent to which cash ⚫ Study in greater depth the effect of the size of brokers' free • Study the effects on the industry of a variety of patterns of • Experiment with various time distributions for the repayment With modification of the model, studies in the following areas would be possi • The effect of changes in the commission rate structure on firms of various types. The effects of changes in the rules for calculating segregation The possibility of developing indicators of serious adverse These suggestions do not exhaust the list of possible studies, but they indicate that, in addition to those covered in this report, there are many important areas where the simulation model could be utilized profitably. It is certain that additional areas will suggest themselves as the results of these studies are examined. Thus, properly used, this new capability will help to reveal fruitful areas for exploration as well as to provide information on which constructive changes and cost savings can be based. APPENDIX HH R-552-ST December 1970 REDUCING COSTS OF A STUDY OF ALTERNATIVE TRADE COMPLETION SYSTEMS Vol. II: Evaluation of Selected Alternatives R. L. Petruschell, D. J. Dreyfuss, L. E. Knollmeyer and J. Y. Lu A Report prepared for AMERICAN STOCK EXCHANGE, NATIONAL ASSOCIATION OF SECURITIES DEALERS NEW YORK STOCK EXCHANGE (2616) This report was prepared for the American Stock Exchange, National Association of Securities Dealers and New York Stock Exchange. Views or conclusions contained in this study should not be interpreted as representing the official opinion or policy of Rand or of the American Stock Exchange, National Association of Securities Dealers or New York Stock Exchange. Rand maintains a number of special subject bibliographies containing abstracts of Rand publications in fields of wide current interest. The following bibliographies are available upon request: Africa Arms Control Civil Defense Combinatorics Communication Satellites. Communication Systems Communist China Computing Technology Decisionmaking • Delphi • East-West Trade Education Foreign Aid Foreign Policy Issues Game Theory Health-related Research. Latin America • Linguistics • Maintenance Mathematical Modeling of Physiological Processes. Middle East Policy Sciences. Pollution Program Budgeting SIMSCRIPT and Its Applications Southeast Asia. Systems Analysis Weather Forecasting and Control To obtain copies of these bibliographies, and to receive information on how to obtain copies of individual publications, write to: Communications Department, Rand, 1700 Main Street, Santa Monica, California 90406. 67-228 - 72 - pt. 5 - 17 Published by The Rand Corporation |