note on managing multi echelon multi item channels with trade allowances under credit period abstract in the recently published paper tsao 2010 managing multi echelon multi item channels with trade allowances under credit period international journal of production economics 127 226 237 a supplier retailer inventory system with multiple items is studied where the supplier provides an interest free credit period for the retailer to compensate him for making promotional efforts to stimulate the demand for each item however as shown in this note there exist some nontrivial flaws in tsao s paper we identify and correct these flaws and develop efficient algorithms to derive the optimal solutions

a note on lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand glock 2012 lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand international journal of production economics 136 37 44 recently presented an integrated inventory model where the lead time can be reduced by crashing the setup and transportation time by increasing the production rate or by decreasing the lot size in this note we introduce a more realistic lead time crashing cost and propose a modified integrated inventory model by adding the transportation time as a decision variable and assuming that there are two different safety stocks furthermore we give some numerical examples to illustrate the advantages of the modified model

a note on integrated single vendor single buyer model with stochastic demand and variable lead time abstract ben daya and hariga 2004 integrated single vendor single buyer model with stochastic demand and variable lead time international journal of production economics 92 75 80 recently proposed the paper about integrated single vendor single buyer model with stochastic demand and variable lead time the lead time is proportional to the lot size produced by the vendor in addition to a fixed delay due to the transportation setup and nonproductive time the end customers accept backorders when the shortage occurs at the buyer side an order to the vendor is placed each time the inventory level reaches the reorder point in this note a modified model is proposed under a different assumption that there are two different reorder points and service levels

joint economic lot sizing problem for a three layer supply chain with stochastic demand abstract this paper considers the joint economic lot sizing problem jelp for multi layer supply chain with multi retailers and single manufacturer and supplier the paper extends the work of ben daya et al 2013 and relaxes the assumption of deterministic demand and constant holding and ordering costs the paper proposes modifying four computational intelligent algorithms to solve mixed integer problems and compares their performance for solving the problem at hand the paper further compares between adopting a centralized safety stock policy versus a decentralized policy results showed cuckoo search to outperform other tested algorithms and also favored adopting a centralized policy

the expected utility hypothesis as immunity against the legal utilization of the money pump and underachiever methods the expected utility hypothesis is somewhat controversial not only has it met difficulty in experimental studies 2 but its theoretical status and traditional defense have been questioned 6 3 in particular the argument that non linear preferences allow an individual to make book against himself has been refined in green 3 green shows that an individual whose preferences are not quasi convex can be manipulated into making book against himself but an individual with quasiconvex preferences that are not linear will not make book against himself even though his choices are subject to certain infelicities 3 the present paper applies green s model and the expected utility hypothesis to the administrator of a government institution instead of an individual who is being manipulated as in green 3 we assume that the administrator attempts to exploit the institution for his own benefit expected utility theory is customarily aimed at describing individual choice under uncertainty while the scope of this paper is public choice rather than individual choice we adopt individual choice theory for our analysis with the following situations in mind i the administrator controls the institution s actions in a particular matter ii the administrator technically lacks authority as in i but the limitations on his control are just a formality for example in practice the administrator makes a recommendation and someone else rubber stamps it iii the administrator does not control the institution s actions but he influences them and his influence is important enough to study for example a united states senator cannot simply enact laws at his pleasure but his influence is still a matter of importance we will concentrate on the cases where as a practical matter the administrator has control of a particular action of the institution 4 to simplify exposition in this context we will speak of an administrator running an institution

lot sizing and lead time decisions in production inventory systems traditionally lot sizing decisions in inventory management trade off the cost of placing orders against the cost of holding inventory however when these lot sizes are to be produced in a finite capacity production inventory system the lot size has an important impact on the lead times which in turn determine inventory levels and costs in this paper we study the lot sizing decision in a production inventory setting where lead times are determined by a queueing model that is linked endogenously to the orders placed by the inventory model assuming a continuous review s s inventory policy we develop a procedure to obtain the distribution of lead times and the distribution of inventory levels when lead times are endogenously determined by the inventory model this procedure allows to determine the optimal inventory parameters within the class of s s policies that minimize the expected ordering and inventory related costs over time we numerically show that ignoring the endogeneity of lead times may lead to inappropriate lot sizing decisions and significantly higher costs this cost discrepancy is very outspoken if the lot size based on the economic order quantity deviates significantly from desirable production lot sizes in these cases the endogenous treatment of lead times is of particular importance

integrated single vendor single buyer model with stochastic demand and variable lead time abstract in this paper we consider the single vendor single buyer integrated production inventory problem we relax the assumption of deterministic demand and assume that the lead time is varying lineraly with the lot size the lead time is composed of a lot size dependent run time and constant delay times such as moving waiting and setup times a solution procedure is suggested for solving the proposed model and numerical examples are used to illustrate the benefit of integration a sensitivity analysis is also performed to explore the effect of key parameters on lot size reorder point and expected total cost

consistent testing for stochastic dominance under general sampling schemes we propose a procedure for estimating the critical values of the extended kolmogorov smirnov tests of stochastic dominance of arbitrary order in the general k prospect case we allow for the observations to be serially dependent and for the first time we can accommodate general dependence amongst the prospects which are to be ranked also the prospects may be the residuals from certain conditional models opening the way for conditional ranking we also propose a test of prospect stochastic dominance our method is based on subsampling and we show that the resulting tests are consistent and powerful against some n 1 2 local alternatives we also propose some heuristic methods for selecting subsample size and demonstrate in simulations that they perform reasonably we describe an alternative method for obtaining critical values based on recentring the test statistic and using full sample bootstrap methods we compare the two methods in theory and in practice

profits risk and uncertainty in foreign exchange markets this paper examines the properties of nominal profits from speculation in dollar dominated forward contracts using a representative agent cash in advance model modified to allow for heteroscedasticity in the exogenous processes the model is simulated by estimating exogenous processes from the data and the remaining free parameters with a simulated method of moments technique simulated expected profits are variable heteroskedastic and serially correlated but the magnitude of these second moments fall short of those of the predictable component of observed profits on the u s dollar as in the actual data simulated forward rates display biasedness in predicting simulated future spot rates

estimation and inference of distributional partial effects theory and application abstractthis article considers nonparametric and semiparametric estimation and inference of the effects of a covariate either discrete or continuous on the conditional distribution of a response outcome it also proposes various uniform tests following estimation this type of analysis is useful in situations where the econometrician or policy maker is interested in knowing the effect of a variable or policy on the whole distribution of the response outcome conditional on covariates and is not willing to make parametric functional form assumptions monte carlo experiments show that the proposed estimators and tests are well behaved in small samples the empirical section studies the effect of minimum wage hikes on household labor earnings it is found that the minimum wage has a heterogenous impact on household earnings in the u s and that small hikes in the minimum wage are more effective in improving the household earnings distribution

note comments on a quantity discount pricing model to increase vendor profits monahan monahan j p 1984 a quantity discount pricing model to increase vendor profits management sci june 720 726 adapted the quantity discount model of inventory theory to the problem of determining an optimal quantity discount schedule from a vendor s point of view and opened up an important direction of research however his one item one customer one vendor model is based on several implicit assumptions that must be judged unreasonable monahan must account for the vendor s inventory carrying charges and redefine his variable s2 it is shown that a rational vendor s manufacturing frequency would not be identical to the buyer s ordering frequency if the vendor s manufacturing setup costs are substantially larger than the buyer s ordering costs a numerical example presented in this note also questions the practical usefulness of monahan s model even after its theoretical inaccuracies axe corrected monahan s model may explain discounts that are a fraction of 1 of the price of an item but it fails to explain commonly observed magnitudes of quantity discounts such as 10 of the unit price

public expenditure under uncertainty the net benefit criteria public expenditure under uncertainty is modeled as the problem of determining the quantities of l public goods and m private goods to be provided to n consumers when the private goods are claims to a single commodity dollars which are contingent upon the occurrence of one of m possible states of nature a real valued net benefit function is identified and criteria based upon this function are provided that are both necessary and sufficient for pareto improving or pareto efficient solutions to this problem copyright 1992 by american economic association

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

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

an optimal vendor buyer cooperative policy under generalized lead time distribution with penalty cost for delivery lateness abstract this paper presents an integrated inventory model for a single vendor and single buyer where lead time is a stochastic variable with general distribution function the vendor delivers goods at a fixed lot size to the buyer who has a constant demand rate storage is permitted on both parties but a penalty cost is assessed when the vendor delivers the shipment late beyond a threshold time the problem is formulated as a nonlinear cost model which needs to be minimized to arrive at an optimal policy for reorder point order quantity and number of shipments from the vendor to buyer to cooperatively operate the joint contract the solution procedure involves both closed form solution and iterative search procedure for this multi dimensional problem numerical examples are presented for uniform exponential and normally distributed lead time s to demonstrate the solution methodology as well as a precursor test for special cases the model presented here are applicable for numerous two stage supply chain systems including retail businesses assembly and production houses where two parties of the supply chain are tied to their common goal of achieving minimum total cost of inventory operation

equity considerations in economic and policy analysis there is little doubt that equity considerations play some role in human decision making this can be seen through statements that we are all created equal or that we have equal rights this can also be seen through some of the transfer mechanisms that societies are willing to put in place for the benefits of the poor or the malnourished in spite of this evidence the role of equity in resource allocation remains poorly understood most economic analyses tend to focus on efficiency issues and avoid addressing distribution issues as argued by sen 1987 1992 as long as human behavior is affected by equity considerations it seems that economics could be made more productive by paying greater attention to welfare distribution at the center of equity is whether and how to distinguish between people in terms of their needs their abilities their contributions and their individual rights people being different at least some of their differences seem to be relevant to the economic evaluation of equity issues at this point it remains somewhat unclear how to approach such issues the current debate about equity has been profoundly influenced by rawls s theory of justice rawls s theory is based on the concept of justice as fairness 1 it relies on a so called original position where individuals do not yet know their exact position in society rawls suggests that a society is just if its current members would find the original position fair rawls s views have been influential yet controversial part of the debate comes in part from some antagonism between equity and rights e g nozick and private property rights are often seen as contributing to inequalities of wealth in modern society the objective of this paper is to explore equity issues with a special focus on interactions between efficiency equity and the role of information in resource allocation in the next

choosing children s environmental risk a model of endogenous risk provides a foundation to study a parent s child care decisions when the child could be exposed to an environmental hazard e g toxic substance foodborne pathogen the parent invests in childcare quality and quantity to reduce the likelihood of a hazard exposure occurring and to reduce its severity if the exposure is realized we supply conditions to sign unambiguously the effects on a child s hazard exposure of an increased probability a parent fails to access or have command over a technique of exposure prevention or that a technique is ineffective in preventing exposure also we consider these effects when the parent is unsure what a technique can do to reduce the child s probability of exposure we conclude public policies designed to encourage use of a particular childcare technique if childcare quality and quantity are stochastic substitutes can reduce parental use of other techniques the net impact of the policy could increase the chance the child suffers

a one vendor multi buyer integrated inventory model abstract we consider a one vendor multi buyer integrated inventory model the vendor seeks to minimize his total annual cost subject to the maximum costs which buyers are prepared to incur in order to implement this model the vendor only needs to know buyer s annual demand and previous order frequency which can be inferred from buyer s past ordering behavior we find the optimal solution for the one vendor one buyer case and present a heuristic approach for the one vendor multi buyer case

robust multidimensional poverty comparisons we demonstrate how to make poverty comparisons using multidimensional indicators of well being showing in particular how to check whether the comparisons are robust to aggregation procedures and to the choice of multidimensional poverty lines in contrast to earlier work our methodology applies equally well to what can be defined as union intersection or intermediate approaches to dealing with multidimensional indicators of well being to make this procedure of some practical usefulness the paper also derives the sampling distribution of various multidimensional poverty estimators including estimators of the critical poverty frontiers outside which multidimensional poverty comparisons can no longer be deemed ethically robust the results are illustrated using data from a number of developing countries

inventory control in a lost sales setting with information about supply lead times abstract supply chain collaboration using advancements in information technology is on the rise and this includes sharing of information between suppliers and buyers in this paper we study the value of information about the development of supply lead times from a buyer s perspective we consider a periodically reviewed single item inventory system in a lost sales setting where at most one order can be outstanding at a time we compare the performance of an inventory model assuming informed lead times to a model assuming uninformed independent and identically distributed lead times we employ the dynamic programming approach to find the best state dependent ordering policy to minimize the expected average total cost per time unit our numerical results show that acquiring information about the development of supply lead times is of value in general the best policy suggested by the model assuming informed lead times causes lower average cost than the model assuming uninformed lead times

equilibrium pricing and lead time decisions in a competitive industry pricing and lead time are two crucial decisions to a success in today s competitive markets this paper examines the equilibrium pricing and lead time decisions in a duopoly industry consisting of two large and several smaller firms with competition we solve the sufficient karush kuhn tucker kkt optimality conditions for the nash equilibrium solution we characterize the existence and uniqueness of the nash equilibrium solution of pricing and lead time decisions for both homogenous and heterogeneous firms our case study provides important managerial insights about firms behavior under price and lead time competition in a semiconductor manufacturing industry

the comparison of multi dimensioned distributions of economic status the literature on inequality measurement has been largely concerned with single dimensioned indicators this paper explores some of the issues which arise when there are several dimensions to inequality and these are not readily reduced to a single index concentrating particularly on the two dimensioned case we make use of results on multi variate stochastic dominance in portfolio theory extending these and applying them to the measurement of inequality the use of the dominance conditions is illustrated by an application to the international distribution of income and life expectancy

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

optimal vendor investment for reducing defect rate in a vendor buyer integrated system with imperfect production process this paper investigates a single vendor single buyer integrated production inventory model with stochastic demand and imperfect production process it is assumed that there is an inspection activity on the part of the buyer with a fixed screening rate greater than the demand rate the vendor invests money in order to improve the production process quality and reduce the number of defectives the expected annual integrated total cost is derived under the n shipment policy and an iterative procedure is suggested to determine the optimal decisions the benefit of investment in reducing the defect rate is illustrated by way of numerical examples it is observed that the higher the defect rate the more beneficial the investment numerical studies further explore that an increased demand requires an increased investment to optimize the total cost

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

international welfare comparisons and nonparametric testing of multivariate stochastic dominance this paper outlines a class of statistical procedures that permit testing of a broad range of multidimensional stochastic dominance hypotheses and more generally welfare hypotheses that rely upon multiple stochastic dominance conditions we apply the procedures to data on income and leisure hours for individuals in germany the uk and the usa we find that no country first order stochastically dominates the others in both dimensions for all years of comparison furthermore while in general the usa stochastically dominates germany and the uk with respect to income in most periods germany stochastically dominates with respect to leisure hours finally we find evidence that bivariate poverty which refers for example to the working poor that is those who have little leisure and low income is lower in germany than in either the uk or the usa on the other hand poverty comparisons between the uk and the usa are sensitive to the subpopulation of individuals considered copyright 2007 john wiley sons ltd

investing in reduced setups in the eoq model this paper is motivated by the observation that the japanese have devoted much time and energy to decreasing setup costs in their manufacturing processes and that there has been little in the way of a formal framework available to use to think about such efforts the object of this paper is to begin to provide such a framework the framework developed identifies only one aspect of the advantages of reducing setups namely reduced inventory related operating costs the other advantages such as improved quality control flexibility and increased effective capacity are not accounted for in this paper nevertheless substantial reductions in setups may be warranted based solely on the benefits identified in this paper the approach taken here introduces an investment cost associated with changing the current setup level and adds a per unit time amortization of this cost to the other costs identified in the standard eoq model the general problem becomes that of minimizing the sum of a convex and a concave function in two special cases the minimization can be carried out explicitly in one of these cases numerous interpretations of the results are made including comparisons of japanese and american practices for example holding other parameters constant there is a critical sales level such that investment is made in reducing setups if and only if the sales rate is above that level when such investment is made the optimal lot size is independent of the sales rate the paper also addresses the joint selection of the setup cost and the sales rate selection of the sales rate is seen as incorporating explicit production and holding costs into the classical monopolist s pricing problem an explicit solution is obtained for the model postulated

an optimal solution technique to the single vendor multi buyer integrated inventory supply chain by incorporating some realistic factors abstract this paper develops two generalized integrated inventory models to deliver a single product from a vendor to multiple buyers to minimize the total cost of set up ordering inventory holding and transportation the production flow is synchronized by transferring the lot with equal and or unequal either all are equal or all are unequal or a combination of equal and unequal sized batches sub lots each of which incurs a transportation cost for easy implementation of the models we relax some unrealistic assumptions in the existing models such as unlimited capacities of the transport equipment and buyers storage insignificant set up and transportation times unlimited lead time and batch sizes a common optimal solution technique to the models is derived and their performances are analyzed potential significances of the solution method are highlighted with solutions of some numerical problems the importance of the relaxed factors and limitation of the models are discussed

erratum to lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand international journal of production economics 136 2012 37 44

the choice of a welfare measure under uncertainty use of option price as a welfare measure when conducting a benefit cost analysis under uncertainty is appropriate only if the project under consideration will have no impact on the allocation of risk among individuals use of the willingness to pay locus as a benefit measure is appropriate only if the project will result in an efficient allocation of risk a more general welfare measure is proposed maximum agreeable payment that correctly measures the benefits and costs of any project