the multi item single period problem with an initial stock of convertible units abstract this paper deals with the situation of a number of end items each facing uncertain demand in a single period of interest besides being able to purchase units of the end items there is also available a stock of units that can be converted into end items but at unit costs that depend on the specific end item efficient solution procedures are presented for two situations i where the end item demand distributions are assumed known illustrated for the case of normally distributed demand and ii a distribution free approach where only the first two moments of the distributions are assumed known computational results for a set of problems are presented

the joint economic lot sizing problem review and extensions with the growing focus on supply chain management firms realize that inventories across the entire supply chain can be more efficiently managed through greater cooperation and better coordination this paper presents a comprehensive and up to date review of the joint economic lot sizing problem jelp and also provides some extensions of this important problem in particular a detailed mathematical description of and a unified framework for the main jelp models are given additionally a comparative empirical study of the main policies proposed for jelp is conducted the focus of this study is on assessing the deviation of these policies from the optimal solution studying the performance of different models provides additional insights that will help in justifying their use in more complex supply chain models that involve more stages or other practical considerations of interest

the democratic political economy of progressive income taxation why do both left and right political parties typically propose progressive income taxation schemes in political competition analysis of this problem has been hindered by the two dimensionality of the issue space to give parties a choice over a domain that contains both progressive and regressive income tax policies requires an issue space that is at least two dimensional nash equilibrium in pure strategies of the standard two party game whose players have complete preferences over a two dimensional policy space generically fails to exist i introduce a new equilibrium concept for political games based on the fact of factional conflict within parties each party is supposed to consist of reformists militants and opportunists each faction has a complete preference order on policy space but together they can only agree on a partial order nash equilibria of the two party game where the policy space consists of all quadratic income tax functions and each party is represented by its partial order exist and it is shown that in such equilibria both parties propose progressive income taxation

optimal production lot with imperfect production process under permissible delay in payments and complete backlogging abstract the traditional economic production quantity epq model assumes that the production products are all perfect it is not always true in the real production system due to imperfect production process or other factors imperfect quality items may be produced furthermore it is well known that the total production inventory costs can be reduced by reworking the imperfect quality items produced with a relatively smaller additional reworking and holding costs in addition the permissible delay in payments offered by the supplier is widely adopted in the practical business market in this study we explore the effects of the reworking imperfect quality items and trade credit on the epq model with imperfect production processes and complete backlogging a mathematical model which includes the reworking and shortage costs interest earned and interest charged is presented besides an arithmetic geometric mean inequality approach is employed and an algorithm is developed to find the optimal production policy furthermore some numerical examples and sensitivity analysis are provided to demonstrate the proposed model

optimal inventory and hedging decisions with cvar consideration abstract we consider a newsvendor who makes an ordering decision to meet stochastic demand and buys a put option written on the demand to hedge against the risk of low demand to maximize his expected utility which is measured by the conditional value at risk cvar the put option is fairly priced with specifications for the strike price and the strike quantity with the consideration of lost sale penalty cost we derive structural results on the optimal ordering and hedging polices we show that the newsvendor will not order more than that without the option contract when the strike quantity is pre determined and low and he will order more when the strike quantity is a decision variable moreover the optimal strike quantity is less than or equal to the optimal order quantity in the risk neutral setting and interestingly there are cases in which the optimal hedging ratio first increases then keeps constant as the newsvendor becomes less risk averse we also show that the value of the put option increases as the newsvendor becomes more risk averse and demand becomes more uncertain furthermore the effect of risk aversion on the value of the option highly depends on the magnitudes of the system parameters

integrated inventory models considering the two level trade credit policy and a price negotiation scheme abstract this paper develops the integrated inventory models with permissible delay in payment in which customers demand is sensitive to the buyer s price the models consider the two level trade credit policy in the vendor buyer and buyer customer relationships in supply chain management a simple recursive solution procedure is proposed for the integrated models to determine the buyer s optimal pricing and production order strategy although the total profit from the buyer and vendor increases together the buyer s share lessens to compensate the buyer s loss due to the cooperative relationship a negotiation system is presented in order to allocate the profit increase to the vendor and buyer to determine the pricing and production order strategy a numerical example and sensitivity analysis are provided to illustrate the proposed model the results indicate that the total profit from the buyer and vendor together can increase although a price discount is given to the buyer in the proposed models

on the equitability of progressive taxation abstract we propose the principle of equal sacrifice to determine the class of vertically inequitable progressive taxes a necessary condition for an income tax function to be equal sacrifice is formulated and hence a subclass of progressive taxes which cannot inflict the same sacrifice upon all individuals relative toanystrictly increasing and concave utility function is determined conversely it is shown in a general framework that any convex thus progressive tax function satisfies the principle of equal sacrifice our findings point to the fact that equal sacrifice under progressive income taxation depends heavily upon the degree of marginal rate as opposed to average rate progressivity journal of economic literatureclassification numbers d63 h20

representative democracy and marginal rate progressive income taxation abstract this paper develops a political economy model that is consistent with the fact that democracies have a preference for increasing marginal tax rates on income we present a model in which there is an exogenous set of political parties with preferences over the set of admissible tax schedules this set contains virtually any increasing and piecewise linear continuous function each party decides whether or not to present a candidate for election there is a fixed cost of running the elected candidate implements one of her preferred tax policies our main results provide conditions under which a strong nash equilibrium exists and a tax schedule with increasing marginal tax rates is implemented in some nash equilibria and in any strong nash equilibrium

fairness self interest and the politics of the progressive income tax all advanced democracies have adopted income taxes with considerable progression in marginal tax rates to explain this we examine the nature of individual and collective preferences over alternative tax schedules in the context of a simple two sector model we first consider the case of altruistic or sociotropic citizens who view the income tax as a means of achieving a fairer or more egalitarian distribution of income we show that greater marginal rate progressivity may well be less fair that a fairest tax however defined is always a linear or flat rate schedule in which all incomes are taxed at the same marginal rate and that with a purely sociotropic electorate there exists a flat rate schedule which is a majority equilibrium we then show that with self interested voters who seek to minimize their own tax burdens greater marginal rate progression may well be preferred by middle and upper income voters that for middle income citizens the optimal schedule is a sharply progressive one and that within the set of individually optimal schedules there exists a majority equilibrium which is a progressive schedule which minimizes the burden on median income or middle class citizens at the expense of lower and upper income taxpayers

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

voting over income taxation abstract a major problem of the positive theory of income taxation is to explain why statutory income tax schedules in practice are marginal rate progressive while it is commonly believed that this is but a simple consequence of the fact that the number of relatively poor voters exceeds that of richer voters in general putting this contention in a voting equilibrium context is not a trivial task we do this here in the context of nonlinear taxation and attempt to provide a formal argument in support of this heuristic claim we first establish the existence of mixed strategy equilibria and identify certain cases in which marginal rate progressive taxes are chosen almost surely by the political parties unfortunately we also find that if the tax policy space is not artificially constrained the support of at least one equilibrium cannot be contained within the set of marginal rate progressive taxes

risk preferences and robust inventory decisions abstract recently in inventory management instead of maximizing expected profit or minimizing expected cost risk averse objective functions have been used for determining the optimal order quantity we use the well known newsvendor model to determine the optimal order quantity for an objective function with two risk parameters which can describe risk neutral risk averse as well as risk taking behaviour of the inventory manager this approach can also be applied to situations in which the demand distribution cannot be specified uniquely we consider robust optimization procedures maximin and minimax regret to determine optimal order quantities if the set of potential demand variables can be partially ordered by stochastic dominance rules

the impact of primary schooling on economic development a review of the evidence abstract the contribution of primary schooling to economic development is greater than has conventionally been percieved this review of recent research shows that primary schooling increases labour productivity in both urban and rural sectors and that the economic returns to such investment are typically high in addition it reduces fertility improves health and nutrition and promotes other behavioural and attitudinal changes which are helpful to economic development investment strategies which give primary schooling an important place would be more conducive of growth with equity than many alternatives priorities for government and donor policies are indicated as are those for future research

would a risk averse newsvendor order less at a higher selling price we model a risk averse newsvendor s decision making behavior with some commonly used classes of utility functions within the expected utility theory eut framework under fairly general conditions of eut we show that a risk averse newsvendor will order less than an arbitrarily small quantity as selling price gets larger if price is higher than a threshold value i e the optimal order quantity decreases as the selling price increases

an eoq model with partial backordering and advance payments for an evaporating item abstract in the classic economic order quantity model the purchasing cost of an order is paid at the time of its receipt in some cases retailers ask purchasers to pay all or a fraction of the purchasing cost in advance and may allow them to divide the prepayment into several equal sized parts in this paper an economic order quantity model for an evaporating item with partial backordering and partial consecutive prepayments is developed with a real case study of a gasoline station real numerical examples illustrate the proposed model and the solution method

accurate lead time demand modeling and optimal inventory policies in continuous review systems abstract to construct an accurate probability density function for lead time demand in inventory management models a mixture of polynomials mops distributions is estimated using b spline functions from empirical data on demand per unit time this is accomplished by summarizing the empirical observations into separate datasets for each lead time value a mixture distribution approach is then applied to model lead time demand in a continuous review inventory system inventory policies can be determined without knowledge of the underlying demand and or lead time distributions an improvement to a mixture distribution approach that models the lead time demand distribution with a mixture of truncated exponentials mtes distribution is also presented and the mop and mte techniques are compared both methods provide reasonable accuracy but the mop approach requires lower computational time to determine optimal inventory policies the mixture distribution approach is also compared with solutions calculated using optimization through simulation and by compiling a discrete empirical lead time demand distribution

optimal strategy for the integrated vendor buyer inventory model this note is concerned with the integrated vendor buyer inventory model two different strategies have been proposed in the literature for the problem one where the delivery quantity to the buyer at each replenishment is identical and another strategy where at each delivery all the inventory available with the vendor is supplied to the buyer we show that there is no one strategy that obtains the best solution for all possible problem parameters we also present the results of a detailed numerical study that analyses the relative performance of the two strategies for various problem parameters

competitive and cooperative policies for the vendor buyer system abstract this paper considers a model for decentralized dynamic production distribution control we examine the situation where a vendor produces a product in a batch production environment and supplies it to a buyer under deterministic conditions some conditional games for the vendor and the buyer are defined the games are indexed by numbers of shipments acceptable to both players before the strategies competition begins a construction of nash equilibrium strategies is given in the proof of the existence theorem goyal s numerical example is used to compare our equilibrium solutions with relatively optimal policies in the cooperative case

newsvendor solutions via conditional value at risk minimization abstract in this paper we consider the minimization of the conditional value at risk cvar a most preferable risk measure in financial risk management in the context of the well known single period newsvendor problem which is originally formulated as the maximization of the expected profit or the minimization of the expected cost we show that downside risk measures including the cvar are tractable in the problem due to their convexity and consequently under mild assumptions on the probability distribution of products demand we provide analytical solutions or linear programming lp formulation of the minimization of the cvar measures defined with two different loss functions numerical examples are also exhibited clarifying the difference among the models analyzed in this paper and demonstrating the efficiency of the lp solutions

robust price setting newsvendor model with interval market size and consumer willingness to pay we consider a price setting newsvendor problem with partial information the newsvendor does not know the price dependent probability distribution of demand but is able to estimate lower and upper limits of the market size and consumer willingness to pay the objective is to minimize the maximum loss in expected profit or minimax regret we derive closed form expressions for optimal quantity and price and identify managerial insights

the effect of advertising on the distribution free newsboy problem abstract advertising is very important for the newsboy problem because the shelf life of the newsboy product is short and advertising may increase sales to avoid overstocking in this paper models to study the effect of advertising are developed for the distribution free newsboy problem where only the mean and variance of the demand are known as in khouja and robbins 2003 it is assumed that the mean demand is an increasing and concave function of advertising expenditure three cases are considered 1 demand has constant variance 2 demand has constant coefficient of variation and 3 demand has an increasing coefficient of variation this paper provides closed form solutions or steps to solve the problem numerical results of the model are also compared with those from other papers the effects of model parameters on optimal expenditure on advertising optimal order quantity and the lower bound on expected profit are derived or discussed

labour force transitions among low wage married couples a simultaneous probability model interdependence in the labour force transitions of low income married couples is studied it utilizes a simultaneous probability model in which each person s job exit depends in part on the job transitions of their spouse estimates are based on data from the seattle denver income maintenance experiments the evidence appears to indicate that wives emulate the nonwork status of their husbands wives of exit prone husbands are themsleves more exit prone and less likely to enter employment evidence in favour of reverse dependence of husbands status on wives exits appears to be weak and imprecise

returns to education a further international update and implications this paper updates evidence on the returns to investment in education by adding estimates for new countries and refining existing estimates to bring the total number of country cases to over 60 the new cross country evidence confirms and reinforces earlier patterns namely that returns are highest for primary education the general curricula the education of women and countries with the lowest per capita income the findings have important implications for directing future investment in education which for efficiency and equity purposes should concentrate on these priority areas

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

celebrating a century of the economic order quantity model in honor of ford whitman harris abstract this writing presents a brief introduction to the papers included in the special issue celebrating a century of the economic order quantity model in honor of ford whitman harris published by the international journal of production economics forty one papers covering an extensive scope of inventory management have been incorporated in this volume from contributing authors from 20 countries located in america asia europe and africa this special issue also provides a basis for new directions in inventory management research

integrated vendor buyer cooperative models with stochastic demand in controllable lead time abstract this article presents the single vendor single buyer integrated production inventory models we relax the assumption that lead time demand x is deterministic and assume that it is stochastic also we assume that shortage during the lead time is permitted and lead time can be reduced at an added cost two models are considered here in the first model the demand of lead time follows a normal distribution and in the second model it is distribution free for both cases we develop effective iterative procedures for finding the optimal policy and numerical examples are used to illustrate the benefits of integration

the loss averse newsvendor model with backordering abstract in this paper we study the optimal order quantity in the loss averse newsvendor model with backordering we first obtain the optimal order quantity to maximize the expected utility to hedge against the risk arising from the uncertainty of market demand we introduce the conditional value at risk cvar measure and derive the optimal order quantity to maximize the cvar objective about utility it is found that the optimal order quantity with the cvar objective is decreasing in the confidence level and thus is smaller than the optimal order quantity to maximize the expected utility it is proved that under the optimal order quantity with the cvar objective the loss averse newsvendor s expected utility is decreasing in the confidence level it further confirms that high risk implies high return and low risk comes with low return

newsvendor problem with random shortage cost under a risk criterion abstract we study profit maximization vs risk approaches for the standard newsvendor problem with uncertainty in demand as well as a generalized version with uncertainty in the shortage cost as often applies in practice we consider two well known risk approaches value at risk var included as a constraint and conditional value at risk cvar we first derive the explicit expressions of the optimal solution with uncertainty of shortage cost under different risk measures and then perform a numerical analysis to quantify the effect of uncertainty in shortage cost and risk measures for the standard newsvendor problem we find that the optimal quantity under cvar is always lower than that under the var constraint which in turn is lower than the order quantity that maximizes the expected profit insightful explanations for this result are that a a higher degree of risk aversion drives the newsvendor to order fewer products increasing the likelihood that all will be sold b this effect is stronger for the cvar approach as this does not consider the expected profit at all another interesting and counter intuitive observation for the cvar approach is that a higher retail price may lead to a smaller order quantity as fewer items need to be sold in order to attain a sufficient profit these results show that one should be careful in employing the cvar risk measure for newsvendor type problems the results remain valid if the shortage cost becomes uncertain however increased uncertainty of this type does improve the relative profitability under the cvar approach by increasing the order quantity under that criterion whilst there is no effect under the other criteria

robust inventory decision under distribution uncertainty a cvar based optimization approach abstract we study the robust inventory decision making problem faced by risk averse managers with incomplete demand information in a newsvendor setting three basic models are developed expected profit maximization cvar based profit maximization and a combination of the two each model is robustly formulated under the assumption of ellipsoid discrete distribution and again under the box discrete distribution each robust model can be mathematically transformed into a second order cone program for ellipsoid uncertainty or into a general convex optimization problem for box uncertainty both transformed problems can be optimally solved directly we offer propositions with proof to show the equivalence of the transformed problems with the original ones numerical examples are given to validate the proposed approach we find that the performances under both ellipsoid and box uncertain distributions are robust finally sensitivity analysis with respect to risk averse levels and trade off coefficients is conducted to validate the proposed models and solution approaches

inequality reducing properties of composite taxation abstract on the one hand we know that the more progressive a tax schedule the more equally distributed the after tax incomes u jakobsson j public econ 5 1976 161 168 on the other hand most tax systems involve a complex procedure where individual incomes are successively subjected to different rounds of taxation we study in the paper the inequality reducing properties of the composition of different taxation schemes and we identify necessary and sufficient conditions for after tax inequality to decrease when the degree of progressivity of one element or more of the tax system is increased for the sake of generality we assimilate the set of income distributions with the space of probability measures over an interval of the real line and any function that associates after tax incomes to before tax incomes is viewed as a taxation scheme this general approach proves to be particularly powerful when investigating the restrictions the egalitarian principle imposes on the set of admissible taxation schemes journal of economic literature classification numbers d31 d63 h24

risk aversion in inventory management traditional inventory models focus on risk neutral decision makers i e characterizing replenishment strategies that maximize expected total profit or equivalently minimize expected total cost over a planning horizon in this paper we propose a framework for incorporating risk aversion in multiperiod inventory models as well as multiperiod models that coordinate inventory and pricing strategies we show that the structure of the optimal policy for a decision maker with exponential utility functions is almost identical to the structure of the optimal risk neutral inventory and pricing policies these structural results are extended to models in which the decision maker has access to a partially complete financial market and can hedge its operational risk through trading financial securities computational results demonstrate that the optimal policy is relatively insensitive to small changes in the decision maker s level of risk aversion

integrated vendor buyer cooperative inventory models with variant permissible delay in payments abstract the integrated inventory models usually have the advantage of reducing total cost however the way to allocate the cost savings from the integration to the buyer and vendor is critical to the success of the joint relationship between both sides to deal with this problem this paper develops the integrated models with the permissible delay in payments for determining the optimal replenishment time interval and replenishment frequency applying the models and considering the coefficient of negotiation and the maximum delay payment period a simple solution algorithm is presented to resolve the allocation of cost savings in the integration model the coefficient of negotiation is adopted to determine the compromise between the buyer s and vendor s cost savings a numerical example is used to demonstrate the feasibility of the proposed integration models a sensitivity analysis is also conducted to demonstrate some properties using the information from the proposed models the buyer and vendor can achieve an acceptable compromise solution for both sides in the supply chain management

risk preferences of a newsvendor with service and loss constraints abstract using the newsvendor framework we present an approach to determine an order quantity which is relevant for the observed ordering behavior of an inventory manager whereas in literature just one constraint has been used we suggest two conflicting constraints the service constraint specified by a target value for the cycle service level is fulfilled by high order quantities the loss constraint is characterized by a target resulting in losses is met by low order quantities choosing as objective function a mean deviation rule where risk attitudes are measured by the conditional value at risk the optimal order quantity is determined depending on the risk parameters if the newsvendor is not able to specify the risk preferences we use the constraints to describe the risk attitudes of the decision maker in dependence of the profitability of the product and its demand distribution including those products where no admissible order quantity exists if there are admissible solutions we identify conditions such that the service constraint is dominating i e the prescribed service level is high and necessarily risk taking behavior is implied contrary if the loss constraint dominates i e the probability of loss is low the decision maker in any case is a risk averter but if both the service target and the loss target are not too challenging then for products with high profitability all risk preferences are possible

improved quality setup cost reduction and variable backorder costs in an imperfect production process abstract this paper illustrates the relationship between quality improvement reorder point and lead time as affected by backorder rate in an imperfect production process to reduce the total system cost by optimizing the setup cost lot size lead time reorder point and process quality parameter simultaneously we first consider that the lead time demand follows a normal distribution then we apply the distribution free approach for the lead time demand we prove two lemmas which are used to find optimal solutions for the basic and distribution free models we compare our models with the existing models using numerical examples and show that significant savings over the existing models can be achieved

application of the scenario aggregation approach to a two stage stochastic common component inventory problem with a budget constraint abstract the purpose of this paper is to study from a new perspective the problem of allocating a given budget among product components that are required for manufacturing the end items in an assemble to order environment since some of the components are common to a number of different end items this constitutes a commonality inventory problem that in fact can be described as a two stage stochastic programming problem we explore the new possibilities made available by the scenario aggregation technique recently proposed by rockafeller and wets in work at the international institute of applied systems analysis iiasa their method was subsequently extended to deal with discrete problems this extension is utilized in the current study

how many parts to make at once reprinted from factory the magazine of management volume 10 number 2 february 1913 pp 135 136 152 interest on capital tied up in wages material and overhead sets a maximum limit to the quantity of parts which can be profitably manufactured at one time set up costs on the job fix the minimum experience has shown one manager a way to determine the economical size of lots

shifts over time and regional variation in women s labor force participation rates in a developing economy abstract in this study an attempt is made a to explain the decline and the inter area variation in women s activity rates in greece during the process of its economic development b to ascertain if there were any shifts in the relevant relationships over time and c to estimate women s hidden unemployment the decline in activity rates was explained with the help of the hypothesis of a u shaped impact of economic development on them among the most important findings were the considerable discouraging effect on labor force participation of unemployment and the negative impact of education women s hidden unemployment was found to be two to three times larger than reported unemployment

robust optimal policies of production and inventory with uncertain returns and demand abstract we consider an inventory and production planning problem with uncertain demand and returns in which the product return process is integrated into the manufacturing process over a finite planning horizon we first propose an inventory control model for the return and remanufacturing processes with consideration of the uncertainty of the demand and returns then a robust optimization approach is applied to deal with the uncertainty of the problem through formulating a robust linear programming model moreover properties on the robust optimization model are studied and an equivalent robust optimization model based on duality theory is obtained which allows the solutions to be derived more efficiently finally we provide a set of numerical examples to verify the effectiveness of the approach and analyze the effects of the key parameters on the solutions

robust inventory management with stock out substitution abstract stock out substitution is a well documented phenomenon that occurs when customers seek a different product as a substitute for their first choice item if it runs out of stock we consider a single period inventory model with limited information regarding the external demands i e mean variance and covariance and focus on identifying the inventory levels that maximize the worst case expected profit we formulate a two stage optimization model the second stage characterizes the worst case joint demand distribution by treating the inventory levels as input parameters and the first stage identifies the optimal inventory levels based on the results of the second stage the closed form solution of the second stage problem is analytically intractable except for two special cases we develop closed form solutions for these two special cases and use them to develop a heuristic for the general case an extensive numerical study over a wide range of parameters indicates that the performance of the heuristic that we develop is nearly optimal we also provide insights into the effects of demand correlation substitution rate and other parameters on the optimal worst case expected profit of the system

popular support for progressive taxation and the relative income hypothesis abstract we show that a marginal rate progressive tax always defeats a marginal rate regressive tax under pairwise majority voting so long as the latter collects at least as much revenue as the former one irrespective of whether the voters care at all about their relative incomes or not

a sustainable production inventory model for a controllable carbon emissions rate under shortages abstract carbon emissions are the key factor of global warming nowadays some countries have focused on reducing carbon emission carbon tax and cap policies are the key mechanism utilized in many countries to achieve this keeping this issue in mind a sustainable economic production quantity sepq carbon tax and cap model has considered for a controllable carbon emissions rate by investing in green technology gt efforts under different with and without shortage situations this study has three models a a sustainable economic production quantity carbon tax and cap model with no shortages b a sustainable economic production quantity carbon tax and cap with partial backordering and c a sustainable economic production quantity carbon tax and cap with full backordering with and without green technology investment a solution methodology has been proposed for determining the optimal strategies of cycle time green technology investment and the fraction period length in positive inventory level several numerical examples have studied to validate the sustainable economic production quantity models the results of this paper are a sustainable economic production quantity carbon tax and cap partial backlogging case has a better justifiable profit with the highest cycle time and the lowest value of the fraction length period as well as the lower green technology investment cost compared with other models finally sensitivity analysis has provided with the managerial implication of the optimal feasible solution with respect to some key parameters

income taxation uncertainty and stability abstract this paper develops a political model to analyze the stability of income tax schedules it is assumed that agents perceive any proposed alternative tax policy as more uncertain than the status quo a tax policy is stable if it is a condorcet winner it is well known that in a model without uncertainty the existence of such a policy is very rare we show however that in real cases this might not be a serious problem since small amounts of uncertainty can bring stability to the status quo it is also shown that linear tax functions can only be stable in economies with very egalitarian income distributions and high taxation levels

popular support for progressive taxation abstract the popular support obtained by two parties who propose two qualitatively different tax schemes is analyzed we show that if the median voter is below the mean then any progressive proposal wins over a regressive one

a robust optimization approach to inventory theory we propose a general methodology based on robust optimization to address the problem of optimally controlling a supply chain subject to stochastic demand in discrete time this problem has been studied in the past using dynamic programming which suffers from dimensionality problems and assumes full knowledge of the demand distribution the proposed approach takes into account the uncertainty of the demand in the supply chain without assuming a specific distribution while remaining highly tractable and providing insight into the corresponding optimal policy it also allows adjustment of the level of robustness of the solution to trade off performance and protection against uncertainty an attractive feature of the proposed approach is its numerical tractability especially when compared to multidimensional dynamic programming problems in complex supply chains as the robust problem is of the same difficulty as the nominal problem that is a linear programming problem when there are no fixed costs and a mixed integer programming problem when fixed costs are present furthermore we show that the optimal policy obtained in the robust approach is identical to the optimal policy obtained in the nominal case for a modified and explicitly computable demand sequence in this way we show that the structure of the optimal robust policy is of the same base stock character as the optimal stochastic policy for a wide range of inventory problems in single installations series systems and general supply chains preliminary computational results are very promising

coping with risk management and fill rate in the loss averse newsvendor model abstract in this paper we introduce the cvar conditional value at risk measure to hedge against the risks for the loss averse newsvendor we derive the optimal order quantities for the loss averse newsvendor to maximize the cvar objective of utility with and without the shortage cost respectively it is shown that when shortage cost is not considered an increase in the degree of loss aversion leads to a decrease in the fill rate therefore the newsvendor should strike a balance between the two conflicting targets in selecting the optimal order quantity when the shortage cost is taken into account and sufficiently large it is proved that an increase in the degree of loss aversion leads to an increase in the fill rate to manage both of the two targets the newsvendor should order more items in this case our sensitivity analysis further verifies that high risk implies high return and low risk comes with low return based on the analysis some management insights for the risk management of the loss averse newsvendor are presented

optimal decisions for the loss averse newsvendor problem under cvar abstract most of the existing literature about the newsvendor problem mainly focused on choosing an optimal order quantity to maximize the expected profit of a risk neutral newsvendor however some studies pointed out that in practice managers decisions as to order quantities always deviate from the profit maximization order quantity which is referred to as decision bias in the newsvendor problem then many studies introduced other preferences rather than risk neutrality of the newsvendor to explain such a decision bias this paper thus introduces loss aversion to the research of the newsvendor decision bias we propose a new definition to the loss averse newsvendor problem legacy loss which is defined either as the loss for excess order or the shortage penalty for lost sales when sales time is due the optimal decisions of a loss averse newsvendor are obtained through the following three ways i minimizing the expected legacy loss ii minimizing cvar of legacy loss by combining the cvar measure in risk management iii minimizing the combination of expected legacy loss and cvar of legacy loss and are compared with other existing results besides we present some properties of the optimal decisions as well as relations among them some numerical examples are given to illustrate the obtained results

minimax distribution free procedure with backorder price discount abstract the inventory models analyzed in this paper explore the problem in which the lead time and ordering cost reductions are inter dependent in the continuous review inventory model with backorder price discount the objective is to minimize total related cost by simultaneously optimizing the order quantity reorder point lead time and backorder price discount moreover we assume that the mean and variance of the lead time demand are known but its probability distribution is unknown we apply a minimax distribution free procedure to find the optimal solution and three numerical examples are given to illustrate the results

the joint economic lot size problem a review abstract this article reviews lot size models which focus on coordinated inventory replenishment decisions between buyer and vendor and their impact on the performance of the supply chain these so called joint economic lot size jels models determine order production and shipment quantities from the perspective of the supply chain with the objective of minimizing total system costs this paper first describes the problem studied introduces the methodology of the review and presents a descriptive analysis of the selected papers subsequently papers are categorized and analyzed with respect to their contribution to the coordination of different echelons in the supply chain finally the review highlights gaps in the existing literature and suggests interesting areas for future research

a single vendor single manufacturer integrated inventory model with stochastic demand and variable production rate abstract this paper investigates an alternative way to react to demand uncertainty in an integrated inventory model namely the variation of the production rate that enables the manufacturer to reduce lead times and the corresponding demand uncertainty to investigate the impact of variable production rates on the supply chain this paper considers a single vendor single manufacturer integrated inventory model where the vendor ships finished products in multiples of full truckloads to the manufacturer the objective of the model is to coordinate both production and distribution of the product in such a way that the total costs of the supply chain are minimized a solution procedure is suggested and the behaviour of the model is analysed in numerical examples obviously the total supply chain cost is reduced when the manufacturer s production rate is included as a decision variable in the model these savings can generally benefit both the vendor and the manufacturer however in situations where coordinated decision making is initially not beneficial to the vendor the supply chain members can benefit from a revenue sharing contract that supports the sharing of the total savings the model proposed in the paper at hand supports both the determination of an optimal production rate as well as the distribution of coordination benefits among the supply chain members

rational voting and candidate entry under plurality rule we analyze a formal model of electoral competition under plurality rule that is characterized by two novel features first rather than assuming a fixed field of candidates we allow candidates to make decisions regarding entry as well as location second voters in our model are strategically rational that is they maximize utility over expected policy outcomes rather than simply voting for the ideologically closest candidate given these assumptions all equilibria in this model are such that the set of entrants locates at the median voter s ideal point this result stands in sharp contrast to earlier models of multicandidate competition in which entry is not allowed and voters vote sincerely

lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand this paper studies alternative methods for reducing lead time and their impact on the safety stock and the expected total costs of a q s continuous review inventory control system we focus on a single vendor single buyer integrated inventory model with stochastic demand and variable lot size dependent lead time and assume that lead time consists of production and setup and transportation time as a consequence lead time may be reduced by crashing setup and transportation time by increasing the production rate or by reducing the lot size we illustrate the benefits of reducing lead time in numerical examples and show that lead time reduction is especially beneficial in case of high demand uncertainty further our studies indicate that a mixture of setup time and production time reduction is appropriate to lower expected total costs

reliability evaluation and adjustment of supply chain network design with demand fluctuations this study focuses on supply chain network design problems by considering economies of scale and demand fluctuations a reliability evaluation method is developed to evaluate the performance of plants under demand fluctuations in addition two mathematical programming models are developed to determine the optimal adjustment decisions regarding production reallocation among plants under different fluctuating demands the judgments to adjust or to do nothing are investigated by comparing the results if the adjustment is made or not made results show that making adjustments benefits the manufacturers by reducing total production cost and avoiding revenue loss which outweighs the extra costs especially for high value added products results also suggest that the manufacturer should ignore a short period abnormal state since the benefits to respond to it might not compensate the high allocation costs the results of this study provide a reference for the manufacturer in their decision making process of network planning with demand fluctuations when they have to cope with benefits and costs during abnormal states

the distribution free newsboy problem with resalable returns we study the case of a catalogue internet mail order retailer selling style goods and receiving large numbers of commercial returns returned products arriving before the end of the selling season can be resold if there is sufficient demand a single order is placed before the season starts excess inventory at the end of the season is salvaged and all demands not met directly are lost since little historical information is available it is impossible to determine the shape of the distribution of demand therefore we analyze the distribution free newsboy problem with returns in which only the mean and variance of demand are assumed to be known we derive a simple closed form expression for the distribution free order quantity which we compare to the optimal order quantities when gross demand is assumed to be normal lognormal or uniform we find that the distribution free order rule performs well when the coefficient of variation cv is at most 0 5 but is far from optimal when the cv is large

the distribution free newsboy problem extensions to the shortage penalty case abstract in the classical newsboy problem no cost is assumed if the ordered quantity is less than the demand however in reality failure to meet demand is always associated with a penalty the aim of this work is to extend the analysis of the distribution free newsboy problem to the case when shortage cost is taken into consideration the analysis is based on the assumption that only the mean and variance of demand are known but its particular probability distribution is not a model is presented for determining both an optimal order quantity and a lower bound on the profit under the worst possible distribution of the demand the following cases are considered the single product case the fixed ordering cost case the random yield case and the resource constrained multi product case

the newsvendor problem review and directions for future research in this paper we review the contributions to date for analyzing the newsvendor problem our focus is on examining the specific extensions for analyzing this problem in the context of modeling customer demand supplier costs and the buyer risk profile more specifically we analyze the impact of market price marketing effort and stocking quantity on customer demand how supplier prices can serve as a coordination mechanism in a supply chain setting integrating alternative supplier pricing policies within the newsvendor framework and how the buyer s risk profile moderates the newsvendor order quantity decision for each of these areas we summarize the current literature and develop extensions finally we also propose directions for future research

expected value of distribution information for the newsvendor problem this paper extends previous work on the distribution free newsvendor problem where only partial information about the demand distribution is available more specifically the analysis assumes that the demand distribution f belongs to a class of probability distribution functions pdf f with mean and standard deviation while previous work has examined the expected value of distribution information evdi for a particular order quantity and a particular pdf f this paper aims at computing the maximum evdi over all f f for any order quantity in addition an optimization procedure is provided to calculate the order quantity that minimizes the maximum evdi

decision bias in the newsvendor problem with a known demand distribution experimental evidence in the newsvendor problem a decision maker orders inventory before a one period selling season with stochastic demand if too much is ordered stock is left over at the end of the period whereas if too little is ordered sales are lost the expected profit maximizing order quantity is well known but little is known about how managers actually make these decisions we describe two experiments that investigate newsvendor decisions across different profit conditions results from these studies demonstrate that choices systematically deviate from those that maximize expected profit subjects order too few of high profit products and too many of low profit products these results are not consistent with risk aversion risk seeking preferences prospect theory preferences waste aversion stockout aversion or the consequences of underestimating opportunity costs two explanations are consistent with the data one subjects behave as if their utility function incorporates a preference to reduce ex post inventory error the absolute difference between the chosen quantity and realized demand two subjects suffer from the anchoring and insufficient adjustment bias feedback and training did not mitigate inventory order errors we suggest techniques to improve decision making

schooling and earnings distributions with endogenous labour force participation marital status and family size this paper investigates the impact of various schooling investment strategies on family and per capita earnings within a framework that integrates effects on earnings family size marital status and labour force participation data are from a 1977 1978 survey of urban nicaraguan women aged 15 45 excerpt

multi product newsvendor problem with value at risk considerations abstract we consider the single period stochastic inventory newsvendor problem with downside risk constraints the aim in the classical newsvendor problem is maximizing the expected profit this formulation does not take into account the risk of earning less than a desired target profit or losing more than an acceptable level due to the randomness of demand we utilize value at risk var as the risk measure in a newsvendor framework and investigate the multi product newsvendor problem under a var constraint to this end we first derive the exact distribution function for the two product newsvendor problem and develop an approximation method for the profit distribution of the n product case n 2 a mathematical programming approach is used to determine the solution of the newsvendor problem with a var constraint this approach allows us to handle a wide range of cases including the correlated demand case that yields new results and insights the accuracy of the approximation method and the effects of the system parameters on the solution are investigated numerically

the quality of schooling quantity alone is misleading although much research discusses the quantity of schooling as an effective impact on productivity and earnings most such research leaves out the idea of the quality of schooling which may cause biases in the estimated returns to schooling this paper consequently attempts to extend the standard mincerian approach to incorporate school quality as well as quantity it demonstrates how exclusion of quality in the standard procedure may cause biases in the estimated returns to years of schooling probably in the upward direction the paper explores the implications of this extension of the standard model for the case of young brazilian males it shows that the estimate of the private return to years of schooling using the preferred quality inclusive specification is only one half the estimate using the standard procedure indicating substantial upward bias in the standard estimates it further outlines a method for estimating a social return to quality and finds that it exceeds substantially the social return to quantity the paper then shows why this in turn suggests there may be an equity productivity trade off in schooling investments

a model of political competition with citizen candidates the authors develop a model of electoral competition in which citizens choose whether or not to run as candidates a winner implements her favorite policy the equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning for some parameter values all equilibria under plurality rule have exactly two candidates whose positions are distinct two candidate elections are more likely under plurality rule than under a runoff system the candidates positions are less differentiated under a runoff system there exist equilibria under both systems in which some candidates have no chance of winning

what you don t know can hurt you or at least mislead you family behaviors unobserved heterogeneities and the determinants and impacts of human resources over the life cycle what one does not know in the form of unobserved heterogeneity can mislead one in empirical estimates a simple model of intrahousehold allocations illustrates the possible importance of unobserved factors such as abilities in determining human resources and their impacts the author reviews over forty years of studies primarily from latin america and the caribbean but also from elsewhere to illustrate the substantial empirical importance of unobserved heterogeneity with regard to preferences and intrahousehold allocations schooling returns school quality early life nutrition and program evaluation