Falsifications made on financial tables which are the outputs of accounting decreases the confidence relied on the financial statements. Falsified financial reports emerged as a result of manipulation misguide or misdirect the financial statements’ users. In this study, it was researched whether 132 firms continuously operating in Manufacturing Industry sector at Istanbul Stock Exchange (BIST) between the years of 2010-2012 are drawn to manipulation in accounting. Beneish model is the most preferred model in literature as manipulation identifying model. In the study, logistic regression method was used and it was concluded that the rates as Working Capital/Total Assets(WC/TA), Working Capital/Sales(WC/Sales), Net Working Capital/Sales(NWC/Sales) and Natural Logarithm of Total Debts(NLTD) are effective in identifying the manipulation in accounting. (Muhasebenin çıktısı olan finansal tablolar üzerinde yapılan çarpıtmalar mali tablolara olan güveni azaltmaktadır. Manipülasyonlar sonucu ortaya çıkan hileli finansal raporlar, mali tablo kullanıcılarını yanıltmakta veya yanlış yönlendirmektedir. Bu çalışmada Borsa İstanbul’da (BIST) İmalat Sanayii sektöründe işlem gören 2010-2012 yılları arasında faaliyeti süreklilik gösteren 132 firmanın muhasebe manipülasyonu yapıp yapmadıkları araştırılmıştır. Manipülasyon tespit modeli olarak literatürde en fazla kullanılan Beneish modeli esas alınmıştır. Çalışmada lojistik regresyon yöntemi kullanılmış ve muhasebe manipülasyonunun tespitinde Çalışma Sermayesi/Toplam Aktif, Çalışma Sermayesi/Satışlar, Net Çalışma Sermayesi/Satışlar oranlarının ve Toplam Borçların Doğal Logaritmasının etkili olduğu sonucuna ulaşılmıştır.)

Health enterprises suppling the human health are businesses intensive in terms of labor and technology. The health services requires manpower with different knowledge and skills. The basis of health providing services, is located in the physical and mental capacity of the service staff . In addition, labor costs, has the largest share of total expenses in a service business of health enterprices. Therefore, it is an important resource and cost factor to be well managed and controlled. Current and potential manpower, all resources, capacity and accurate planning of costs and managing - the start of a new search result with the inadequacy of traditional methods Time-Driven Activity-Based Costing (TDABC) was developed as a more reliable method. In this study, the cost of health services provided in a private hospital clinics, used and unused capacity is calculated by TDABC. TDABC providing significant contributions on cost, capacity, human resources planning and management to business management.

Financial ratio analysis is a vital one since the profitability of an enterprise is directly affected by such decision. The successful selection and use of appropriate financial ratio is one of the key elements of the firm’s financial strategy. The purpose of this study is to perform ratio analysis on the selected 10 companies listed on Borsa Istanbul IT Index (BIST XBLSM) over the four years period from 2010-2013. These financial ratio analyses have huge potentials to help organizations in improving their revenue generation ability as well as minimization of costs. In these analyses 14 ratios have been used and we have an image about the companies’ liquidity, leverage, efficiency and profitability based on the ratios. As a result of the findings acquired, companies should be more concerned about increasing their current assets, it is preferable to control short term debts and head towards long term debts and the inventory turnover in days must be rearranged to meet more efficient and profitable ratios.

TFRS-2 Share-Based Payment in accounting for all share- based payment transactions including equity-settled share-based payment transactions, cash-settled share- based payment transactions, and transactions in which the entity receives or acquires goods or services and the terms of the arrangement provide either the entity or the supplier of those goods or services with a choice of whether the entity settles the transaction in cash or by issuing equity instruments. In this study, scope of standard and how it is practised is explained and we also cited the examples of the booking records in conformity with the Standard.

In this study; the financial performances of the companies listed on Istanbul Stock Exchange Technology Index (XUTEK) are calculated via ratio analysis method by analyzing balance sheets and the components of the income statement tables related to 2011-2012- 2013 years. Firstly, the relevant companies are selected, financial ratios are determined and the related ratios of every single companies are calculated for each of the periods. Subsequently the calculated ratios are compared due to the years. According to analysis results; liquidity ratios of the related eleven companies which are operated in Istanbul Stock Exchange Technology Index are considered as sufficient for Turkish market. However; leverage ratios especially the share of short term liabilities from financial structure rates are too high. Generally, the conversion of stocks takes about 3-4 months while receivables are collected in two months. Besides profitability ratios of companies are not similar in the study.

Total Productive Maintenance (TPM) is an approach in Preventive Maintenance which can be used by a company to evaluate the effectiveness of the company’s facility. This evaluation is conducted to improve the facility value of Overall Equipment Effectiveness (OEE) and to eliminate the main loss known as The Six Big Losses. TPM is a maintenance approach focusing on the equipment which is suitable to be implemented on the manufacture company and production industries. This research is conducted on the Ball Tea machine in PT Kabepe Chakra which is a production machine to dry tea. The calculation of OEE value is conducted based on the data in January-December 2014, the calculation results show that the OEE value is 59.30897433% and it is still under the World Class standard. The calculation of Six Big Losses shows that the percentage of the most dominant of machine losses is on the Set-Up and Adjustment Loss which is 42.6768183%. The research results can be used to show that the effectiveness of Tea Ball machine still has to be improved by focusing on the most dominant loss elimination.

The present study attempts to investigate the relations between the communications on the social network platforms and its effect on the purchase intentions of the consumers and more specifically the young adolescents. Further, this study also attempts to investigate how these relationships vary across young people possessing different learning styles. This study analysed the data in three part. The initial was an exploratory study which consisted of maintaining and excluding those items which enabled the analysis of other dimensions or factors with a suitable degree of reliability or uni-dimensionality. The second part was an exploratory and confirmatory factor analysis and the third being the structural equation modelling, which discarded those items which did not enable suitable dimensionality for the entire construct in the model. Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) was used to test the present model using AMOS 21 software and basic calculations in statistics such as mean, standard deviation, factor analysis, correlation will be performed using SPSS 21. The study shows that the social media communication influence brand attitude and image leading to purchase intention.

industry and commercial world. This study aimed at analysing the adoption and usage of Internet banking in Zimbabwe. It covered issues such as various banking services available through internet banking in Zimbabwe, factors influencing internet banking adoption in Zimbabwe, factors impacting negatively on customers’ utilization of internet banking and banks’ perceptions of internet banking. Questionnaires were administered to selected banking customers and staff of commercial banks using purposive and simple random sampling techniques. Findings from the study indicate that internet banking services in Zimbabwe include checking of balances and account activity, request for cheque book and same bank funds transfer. Lack of awareness on internet banking security, accessibility, lack of familiarity, age, gender, educational level and cultural resistance are some of the factors that affect internet banking adoption among customers. Internet banking is still in its teething stage and most of the banks do not offer full-fledged Internet banking though they have plans to do so. Bankers see Internet banking as a strategic opportunity that can be used to reduce transaction costs and enhance customer service delivery. It is therefore recommended that banks develop appropriate internet banking marketing strategies that maximizes value for customers and satisfaction in the long run.

This study uses the Graph Model for Conflict Resolution (GMCR) as an approach to describe the optimal solution for resolving the conflict which happened between IDT and its subsidiary IDMT. This conflict arose when IDMT used IDT’s 2.1 frequency band.

The main players in the conflict is IDT with its subsidiaries namely IDMT. The other parties involved in the conflict were KTI NGO, Central Jakarta District Court, Attorney General's Office and Policy Institute (MCIT and Administrative Court). The method used in this research is qualitative research that uses literature review as a tool for data collection

Based on the stability analysis, The equilibrium scenario for all the parties in frame I and frame II was the first scenario. The first scenario happened when, KTI NGO reported that there was an alleged misuse of mobile cellular network in the frequency of 2.1 GHz / 3G conducted by IDT and IDMT. IDT and IDMT sent out a counter report stating that they had been extorted by KTI NGO. The Central Jakarta District Court then concluded that KTI NGO had been guilty of extorting IDT and IDMT. However the Attorney General's Office continued their investigation on IDT and IDMT because of their suspected misuse of mobile cellular network and on the Policy Institute who defended IDT and IDMT. Based on the outcome of the conflict as reported on online news portals, it can be concluded there is correlation between the outcome of the conflict and the stable solution (equilibrium) generated through the GCMR approach. The implications of this study can be used as a reference for the Indonesian government and stakeholders in the telecommunications industry to resolve similar conflict in the telecommunications cooperation agreement.

Indian Consumers always remain a marketer’s challenge. The great Indian ever increasing consuming class has arrived and is waiting to be served. Currently as the services sector contributes 60% to GDP of India (Source: IBEF) and 50% population is below 25 years of age, 65% population of the country is below 35 years of age (Census of 2011), Indian retail sector promises to scale new heights in times to come. India’s largest retailers (in terms of turnover) are Future Group, Aditya Birla, Shoppers Stop, RPG, WEST SIDE, Life Style, Ebony, Pyramid and Globus. In Bhubaneswar, the field of Groceries and Consumer Durables is dominated by organized new retail outlets like Reliance Fresh, BIG BAZZAR, Pantaloon, The World, The Grains etc. Hence, data for the purpose of the study was collected from who patronize these retail outlets. The perceptions of the consumers as regards the new retail outlets and select variables like educational qualification and income of the consumers were analyzed by applying the Chi- Square test. Factor Analysis is incorporated to identify the factors that influence the buying decision of consumers. Five factors were identified, viz., product features & assortments, extended marketing mix, pragmatic consumption, customer relationship & loyalty and sales offers. The Chi-Square test was also applied to assess the significance of consumer perception factors. It is concluded that pragmatism and functionality are the hall mark of modern consumption. This research paper is an honest endeavor of the researcher to understand consumer psychology for ONRO.

This research is to construct a model for an accurate prediction of financial distress by finding and including other variables outside the data/information derived the accounting reports. The population of this research is composed of all the non-financial companies listed on the Indonesia Stock Exchange. As for the samples, they are the companies experiencing financial distress which is indicated by their negative profits in two consecutive years; and the control group is composed of the companies in the same industry group with the total asset of almost the same as that of the companies experiencing financial distress; only that these companies do not experience financial distress.The model to construct the financial distress prediction is the Binary Logistic Regression. The results show that the variables of the group of financial ratios, namely liquidity, profitability, leverage, activity, and cash flow, can be used as the variables for the financial distress prediction. However, the variables of the group of market and macroeconomic ratios cannot be employed to predict. Meanwhile, the variable of the group of industry treated as a moderating dummy variable does not indicate to have any moderating influence on the variables of financial ratio that previously proved to have significant influence on the possibility of the financial distress of a company.

Competition in the automotive industry has become increasingly in challenging tandem with time and advances in technology. Based on this situation, it is important for Malaysia to be at the top of the advanced automotive manufacturers, especially among ASEAN members. Therefore, this study aimed to prove not only product innovation as a contributor to the success of the automotive industry, but also has its own role management. By using Green Lean Six Sigma practices (GLSS) as the independent variable, it can help bring about a transformation of management which can improve financial performance. The Structural Equation Modelling (SEM) has been proposed as conceptual model in this study. Based on proposed research model and literature review, a research hypothesis is being developed.

One of the biggest questions battling governments around the world is performance of State Owned Enterprises (SOEs), as they are one of the biggest companies in every country and have a large share in economics growth and prosperity. Power, water and other types of independence of each country are mainly based on resources controlled by State Owned Enterprises. This issue became more important in last few decades due to globalization and market liberalization. Paper analyses performance of SOEs from the Republic of Slovenia and Bosnia and Herzegovina. To understands differences and similarities between SOEs from Bosnia and Herzegovina and Slovenia we have conducted a comparison analysis. Measuring the success of these SOEs is based on the analysis of financial statements for period from 2008 to 2012, using indicators of profitability and market indicators. The results reveal that SOEs from Bosnia and Herzegovina have poor governance and much lower performance than SOEs from Slovenia. The broad conclusion that emerges from the results is that government of Bosnia and Herzegovina has to conduct extensive reforms and reorganization of its S SOEs in order to survive and grow.

We studied the performance of 187 firms drawn from MNC subsidiaries (55), domestic private-owned (76), and domestic state-owned (56) firms operating in India. The underlying objective was to assess which group of firm demonstrated superior economic performance and competitiveness. We analyzed data for two periods of time 2002-03 and 2011-12 using four measures of economic performance namely operating profit margin (OPM), net profit margin (NPM), return on net worth (RONW) and asset turnover ratio (ATR). As the data set did not lend itself to parametric analysis, we adopted the nonparametric method. We employed Kruskal-Wallis H Test, Mann-Whitney U Test, Two-Step Cluster Analysis, and Chi-Square Test. We found that domestic private-owned firms performed better and were more competitive than the other two groups of firms.

There is growing evidence that low-cost open-source 3-D printers can reduce costs by enabling distributed manufacturing of substitutes for both specialty equipment and conventional mass-manufactured products. The rate of 3-D printable designs under open licenses is growing exponentially and there are already hundreds of designs applicable to small-scale organic farming. It has also been hypothesized that this technology could assist sustainable development in rural communities that rely on small-scale organic agriculture. To gauge the present utility of open-source 3-D printers in this organic farm context both in the developed and developing world, this paper reviews the current open-source designs available and evaluates the ability of low-cost 3-D printers to be effective at reducing the economic costs of farming. This study limits the evaluation of open-source 3-D printers to only the most-developed fused filament fab- rication of the bioplastic polylactic acid (PLA). PLA is a strong biodegradable and recyclable thermoplastic appropriate for a range of representative products, which are grouped into five categories of prints: hand tools, food processing, animal management, water management and hydroponics. The advantages and shortcomings of applying 3-D printing to each technology are evaluated. The results show a generalizable technical viability and economic benefit to adopting open-source 3-D printing for any of the technologies, although the individual economic impact is highly dependent on needs and frequency of use on a specific farm. Capital costs of a 3-D printer may be saved from on-farm printing of a single advanced analytical instrument in a day or replacing hundreds of inexpensive products over a year. In order for the full potential of open-source 3-D printing to be realized to assist organic farm economic resiliency and self-sufficiency, future work is outlined in five core areas: designs of 3-D printable objects, 3-D printing materials, 3-D printers, software and 3-D printable repositories.

Although the trend in manufacturing has been towards centralization to leverage economies of scale, the recent rapid technical development of open-source 3-D printers enables low-cost distributed bespoke production. This paper explores the potential advantages of a distributed manufacturing model of high-value products by investigating the application of 3-D printing to self-refraction eyeglasses. A series of parametric 3-D printable designs is developed, fabricated and tested to overcome limitations identified with mass-manufactured self-correcting eyeglasses designed for the developing world's poor. By utilizing 3-D printable selfadjustable glasses, communities not only gain access to far more diversity in product design, as the glasses can be customized for the individual, but 3-D printing also offers the potential for significant cost reductions. The results show that distributed manufacturing with open-source 3-D printing can empower developing world communities through the ability to print less expensive and customized self-adjusting eyeglasses. This offers the potential to displace both centrally manufactured conventional and selfadjusting glasses while completely eliminating the costs of the conventional optics correction experience, including those of highly-trained optometrists and ophthalmologists and their associated equipment. Although, this study only analyzed a single product, it is clear that other products would benefit from the same approach in isolated regions of the developing world.

Dear reader,

We are proud of Challenges in Sustainability's (CiS) fruitful start. A variety of quality research articles, edi- torials and notes have been published on a range of themes and topics, including sustainability governance [1], improved cookstoves [2], [3], the potentials of 3-D printing in the global South [4], and the need for con- siliences between the natural and social sciences and the humanities [5], to name just a few. Furthermore, despite the journal's short history, we are pleased with its high visibility, where numerous articles have been viewed or downloaded over 1200 times since publication. The high exposure rate and the quality of publications affirm our aspirations for stable growth and development in the future.

Much of CiS's early success can be acredited to the competent and devoted administrative, managerial and editorial staff. We must first begin by thanking former Editor-in-Chief, Jürgen Kropp, for his work in estab- lishing and placing the journal on a solid footing for the future. Much of the success can also be attributed to the diverse, but impressive, editorial group with competencies in a multitude of sustainability-relevant areas, nor must we forget the devoted managerial and administrative staff at the journal. Thank you all!

Pathway Forward

Notwithstanding our progress, we will continue to work diligently to place CiS at the forefront of sus- tainability knowledge dissemination, not as a highbrow and inaccessible outlet for academic research and discourses on sustainability; our intentions, rather, are to promote the journal as an innovative forum for cutting-edge research, opinions and notes on sustainability (science).

The first step in this process is an updated focus and scope [6] which, we feel, better encapsulates the changing nature and the state of the art of today's sustainability research and the myriad debates and discourses that surround it. In addition to the journal 's timely review process for knowledge prompt dissemination to wider audiences, we will also work actively to promote special issues on specialized cutting-edge themes in the field. Discussions are already underway on topic areas. Furthermore, we will work to promote CiS as a novel instrument for the promotion of alternative forms of knowledge dissemination, e.g., short films [3], forms that are likely to catch the attention of the new generation of savvy multimedia consumers and decision-makers, both in- and outside of academia.

Finally, we will strive to be an innovative forum to link knowledge on sustainability to action. Because CiS is open access, it has the potential to reach broader audiences. Librello, our publisher, leads the change in academic publishing where large scientific journals and publishing houses historically played an important role in science by creating a network for the cir- culation of information. However, in the digital era, the traditional network can actually work against the exchange of information by means of high subscription rates and pay-per-view barriers. As one reaction, a boycott against Elsevier was started in 2012; it now counts roughly 15000 scholars [7].

Open access publishers have increased in number rapidly, contributing to the free-availability of knowledge. Nevertheless, the open access system has an intrinsic problem: the revenue of a company is propor- tional to the number of its publications.Several publishers of dubious reputation have been surfing on this wave and taking advantage of an academic market, which pressures the scholar toward productivity indices based on the number of his/her publications [8], [9].

Librello is an environment sponsored and supported by scholars and their institutions. Our membership program allows us to keep the decision of publication from any economic pressure, and we rely on our editorial team of experts to take decisions impartially. Our system also benefits the authors, since the annual membership fee covers multiple submissions. We aim at working closely together with scientists and experts outside academia, creating and establishing this community-based channel of science dissemination and advocacy, postulating solutions towards a more sustainable society.

Manufacturing in areas of the developing world that lack electricity severely restricts the technical sophistication of what is produced. More than a billion people with no access to electricity still have access to some imported higher-technologies; however, these often lack customization and often appropriateness for their community. Open source appropriate technology (OSAT) can overcome this challenge, but one of the key impediments to the more rapid development and distribution of OSAT is the lack of means of production beyond a specific technical complexity. This study designs and demonstrates the technical viability of two open-source mobile digital manufacturing facilities powered with solar photovoltaics, and capable of printing customizable OSAT in any community with access to sunlight. The first, designed for community use, such as in schools or makerspaces, is semimobile and capable of nearly continuous 3-D printing using RepRap technology, while also powering multiple computers. The second design, which can be completely packed into a standard suitcase, allows for specialist travel from community to community to provide the ability to custom manufacture OSAT as needed, anywhere. These designs not only bring the possibility of complex manufacturing and replacement part fabrication to isolated rural communities lacking access to the electric grid, but they also offer the opportunity to leap-frog the entire conventional manufacturing supply chain, while radically reducing both the cost and the environmental impact of products for developing communities.

The human system, driven largely by economic decisions, has profoundly affected planetary ecosystems as well as the energy supplies and natural resources essential to economic production. The challenge of sustainability is to understand and manage the complex interactions between human systems and the rest of nature. This conceptual article makes the case that meeting this challenge requires consilience between the natural sciences, social sciences and humanities, which is to say that their basic assumptions must be mutually reinforcing and consistent. This article reviews the extent to which economics is pursuing consilience with the sciences of human behavior, physics and ecology, and the impact full consilience would have on the field. The science of human behavior would force economists to redefine what is desirable, while physics and ecology redefine what is possible. The challenges posed by ecological degradation can be modeled as prisoner's dilemmas, best solved through cooperation, not competition. Fortunately, science reveals that humans may be among the most cooperative of all species. While much of the mainstream economic theory that still dominates academic and the policy discourse continues to ignore important findings from other sciences, several sub-fields of economics have made impressive strides towards consilience in recent decades, and these are likely to change mainstream theory eventually. The question is whether these changes can proceed rapidly enough to solve the most serious problems we currently face.

Unified process, a leading software development methodology, allows project teams to incrementally build their software and structurally defines project roles, phases, iterations and disciplines. One of the issues that arise when applying unified process is absence of discipline for quality assurance and control. This research aims to define new discipline entitled “quality management of software development” and its processes, in order to produce modified version of unified process, suitable for continually controlling quality in software development projects. This discipline will integrate ISO 9126 “Software engineering – product quality”, which is an international standard for addressing software quality and quality control tools, as proposed by Project Management Book of Knowledge 2010. Main hypothesis of this research is that, by defining and integrating new discipline of quality management, project teams that employ this new, modified version of unified process, will be able to produce software of higher quality level. Experimental research is conducted on four software development projects, ranging from 2009 to 2010, two of which use standard, and two of which use modified unified process model. Research results show higher software quality levels in two projects that use modified unified process methodology.

This paper seeks to discover whether as a result of the removal of prudence as a concept within the revised 2010 Conceptual Framework, the accounts of companies in the FTSE100 in the UK have displayed any trends to be more or less conservative/prudent. The research design uses the two most popular measures of accounting conservatism (prudence) used in literature, Market-to-Book ratio and the Basu Asymmetric Timeliness model (Basu 1997) and compares the period prior to the change in the 2010 Conceptual Framework with the same measures post the change. The study finds that using both measures of conservatism, the levels of conservatism have fallen since the removal of prudence from the Conceptual Framework. This paper has implications for the users of financial statements and standard setters as the lower levels of prudence or accounting conservatism are associated with higher levels of risk (litigation) and costs (agency costs) which can affect stock valuations.

An activity of online buying and selling products causes many online shops on social media. One of social media being used for buying and selling products in society is Instagram. Factors in influencing online purchasing need to be considered by online shops in order to meet the needs and desires of customers. This study aims to determine the factors that influence the online clothes fashion product purchasing on Instagram and other social media to find out the most dominant variables of each factor. This study employs a descriptive quantitative method and factor analysis in SPSS 20:00 in windows seven. The variables analyzed in this study is the impulse purchase orientation, attitude to online shopping, service quality, perceived risk, informativeness, online trust, specific holdup cost, perceived ease of use, and purchase intention. Data collection techniques are on students of Faculty of Economics and Business (FEB) and students of Faculty of Communication and Business (FKB) of Telkom University done by interviews and questionnaires. The sample in this study is using proportionate stratified random sampling of 100 people with a confidence level of 95% and an error of 5%. The results showed that the newly formed five factors that influence online purchase. The fifth factor is the perceived ease of use, online trust, informativeness, attitude to online shopping, and impulse purchase orientation. Online shopping businesses today are expected to pay attention to these factors in order to improve the service. Future studies are expected to use other variables such as enjoyment, perceived usefulness, and innovativeness while also able to use other analytical techniques such as Structural Equation Modelling (SEM).

Existence of global rivalry between corporations causes the need for expatriation as one of potential sources of international competitive advantage. Expatriation is standard practice of multinational corporations to accomplish their missions. In this paper focus is put on self-initiated expatriates who represent contemporary trend among global working force. Their importance and uniqueness is elaborated broadly. Special emphasis is put on comparison between traditional and self-initiated expatriates. The most important differences between those two categories are analyzed as well as different motives that lead and encourage them to successfully finish their international assignments.

Mobile gaming and digital music industries’ dynamics and growth show high potential of value network and induce new ways of designing and developing competitive value propositions throughout disruptive innovation processes. These innovative processes have the potential to lead to design and development of new products and services, by combining games with music contents and revolutionizing the current media entertainment sector. In view of that, mobile gaming sector and market analysis were conducted throughout competitive analysis frameworks, analysis of regional innovation systems and online surveys to support the blue ocean opportunities and corroborates its market potential. Hence, the analysis involved the study of the competitive environment and technological convergence of both industries and the impact of this new game in industry dynamics. Moreover, the key drivers and trends influencing the business environment were analysed and competitive strategies were discussed as new trends for the sector, as well as new value chain rearrangements and potential players’ competition models. Finally, there were discussed vertical and horizontal integration processes, industrial clustering and agglomeration economics to lead regional innovation systems, higher knowledge investments and R&D spillovers to support blue ocean opportunities benefiting customers through new and innovative value propositions. Major sectorial changes and societal impacts for the future are also discussed.

This paper judges the welfare implications of anticipated and unanticipated Productivity shocks in a small open economy. The purpose model is two country New Keynesian dynamic stochastic general equilibrium model with the characteristics of nominal rigidities and monopolistic competition. This study finds out the higher degree of openness increase the welfare cost in the anticipated shocks. The response of optimal policy to anticipated shocks demonstrates the larger and delayed on macroeconomic variables than unanticipated shocks. Optimal monetary policy rule has a potential to curb the inflation and meet an optimal level of the real exchange rate volatility. Movements in real exchange rate resist the terms of trade externality and upturn the effectiveness of monetary policy. In addition, monetary authorities focus on the goal of exchange rate stabilization in their policy decisions.