bluuebunny/crossref_metadata_2025 huggingface dataset:
The Evolution of Organizational Structure and Technology in a Developing Country
Authors: Kim Linsu , Utterback James M.
Published: November 2008

This article examines an evolutionary pattern of relationships among technology, structure, environment and other contextual variables in 31 manufacturing organizations in a developing country. The results of bivariate analyses show that younger firms exhibit more mechanistic structure, a higher degree in operations technology adaptability, a lower degree in indigenous technical capability, a lower degree of innovation, and smaller scale than older firms. The results also show that younger firms perceive suppliers as more important, while older firms perceive customers and competitors as more important. Multivariate discriminant analysis also supports the above findings in general. The pattern observed in a developing country is quite different from that observed in developed countries, but firms in both developed and developing countries appear to adopt organizational designs viable to their own environment. The results of the study suggest ways in which international operations should be designed to correspond to their local environment.
A Fluid Flow Model of Networks of Queues
Authors: Vandergraft James S.
Published: November 2008

This paper describes a new technique for modeling flow through a network of queues. The advantages of this method over many discrete event simulations or queueing theory techniques include simplicity, low cost and portability. The paper describes the kinds of processes to which the technique can be applied, and the characteristics of the process that can be determined by the resulting model. An example of claims processing in a Social Security Administration's District Office is given. The basis for the technique is to model the information flow by a fluid flow, and then use standard engineering ideas to describe the fluid flow by a system of ordinary differential equations. The system of equations is solved by well-known numerical methods.
Identifying Redundant Constraints and Implicit Equalities in Systems of Linear Constraints
Authors: Telgen Jan
Published: November 2008

Redundant constraints are constraints that can be omitted from a system of linear constraints without changing the feasible region. Implicit equalities are inequality constraints that can be replaced by equalities without changing the feasible region. We prove some theorems concerning the identification of both kinds of constraints. Based on these theorems two methods are developed that allow identification of all redundant constraints and all implicit equalities. Computational experience on small problems indicates a behavior at least competitive with other methods in this field.
After the Crash: The Passenger Response to the DC-10 Disaster
Authors: Barnett Arnold , Lofaso Anthony J.
Published: November 2008

Through the analysis of CAB market-share data, an attempt is made to estimate the extent to which fears arising from the Chicago DC-10 crash displaced passenger traffic onto other kinds of aircraft. Factors that could distort simple “before-after” comparisons are discussed and a procedure to correct for them is proposed. The results suggest that, less than a year after the accident, there was no detectable resistance to flying the DC-10.
Sales Territory Alignment: A Review and Model
Authors: Zoltners Andris A. , Sinha Prabhakant
Published: November 2008

The sales territory alignment problem may be viewed as the problem of grouping small geographic sales coverage units into larger geographic clusters called sales territories in a way that the sales territories are acceptable according to managerially relevant alignment criteria. This paper first reviews sales territory alignment models which have appeared in the marketing literature. A framework for sales territory alignment and several properties of a good sales territory alignment are developed in the course of the review. A general sales territory alignment model which accommodates these properties is developed. A solution procedure for the general model is presented. Finally, an actual implementation of the general model is described. The implementation provides a comparison of the general model with a similar model which has been frequently cited in the marketing literature.
Comparison of Alternative Utility Functions in Portfolio Selection Problems
Authors: Kallberg J. G. , Ziemba W. T.
Published: November 2008

This paper examines the effect of alternative utility functions and parameter values on the optimal composition of a risky investment portfolio. Normally distributed assets are the setting for the theoretical and empirical analyses. The results agree well with the available theory and imply utility functions and parameter values that are appropriate for investors with particular risk-bearing attitudes. The results give strong empirical support to the proposition that utility functions having different functional forms and parameter values but “similar” absolute risk aversion indices have “similar” optimal portfolios. These results suggest that over horizons up to one year one can safely substitute “convenient” surrogate utility functions for other utility functions, for reasons of tractability or otherwise. The results also provide guidance regarding the significance of the magnitude and change of particular numerical values of the risk aversion index. Moreover, theoretical (“exact”) results are obtained using Rubinstein's measure of global risk aversion.
An Approach to the Optimal Positioning of a New Product
Authors: Gavish Bezalel , Horsky Dan , Srikanth Kizhanatham
Published: November 2008

This study examines the problem faced by a firm which wishes to position a new choice object in an existing product class. It is assumed that both the consumer and the firm are involved in a two-stage decision process. The consumer first decides on his budget for the product class. He then evaluates, within the product class, that subset of competing objects which have prices approximately equal to his budget constraint. This evaluation is performed through a weighted multi-attribute utility model. The product classes considered here are ones for which the consumer has a finite ideal level on each attribute. The consumer is hypothesized to choose, without error, that object which is closest to his ideal. Different individuals are assumed to be heterogeneous in both attribute weights and ideal levels. The firm is assumed to first identify, in the attribute space which contains ideal points and competing objects, promising product positions which would attract a large number of consumers. It then evaluates these positions in terms of costs and resulting profits. The problem of identifying the promising positions, given information on a sample of individuals, is formulated as a Mixed Integer Nonlinear Program. Due to the inability of such a program to solve even small sample problems, the spatial properties of the problem are examined. An exact solution algorithm which is computationally feasible for small samples is developed. It is based on an examination of intersections of indifference hyperellipsoids. For larger sample problems an efficient heuristic which is an extension of the random point search used in nonlinear programming is provided. It involves random line search procedures for our noncontinuous-type problem. The positioning approach and the heuristic are illustrated in a simulated positioning problem in the small car market.
A Branch and Bound Algorithm for Assembly Line Balancing Problems with Formulation Irregularities
Authors: Johnson Roger V.
Published: November 2008

This paper describes a branch and bound algorithm which can solve assembly line balancing probems with nine modifications to the originally formulated problem of minimizing the required number of assembly stations, given a cycle time, a set of tasks with given deterministic performance times, and between-task precedence relationships. The first two formulation modifications are those of permitting planned imbalance in the total of task performance times at each assembly station, and allowing specific tasks to be assigned to specific types of assembly stations. Seven further problem modifications can be solved by the proposed algorithm, or by any algorithm or heuristic that can solve problems containing these first two modifications. They are: treatment of stochastic task performance times on unpaced lines; requirement of particular tasks to be assigned to particular stations; requirement of task groupings according to task skill levels; requirement of particular tasks to be assigned to only a left-of-line or right-of line station; required task separations; some mixed model situations; and where paralleling of a specified task into two (or more stations) is permitted. The algorithm is presented in both conceptual and detailed form. Computer computation times to solve a selected cross-sectional sample of problems are provided.
Note—Modeling Semirational Competitive Behavior
Authors: Rothkopf Michael H.
Published: November 2008

Management Science recently printed an exchange of views between Kadane and Larkey (Kadane, J. B., P. D. Larkey. 1982. Subjective probability and the theory of games. Management Sci. 28 113–120; Kadane, J. B., P. D. Larkey. 1982. Reply to Professor Harsanyi. Management Sci. 28 124.) and Harsanyi (Harsanyi, J. C. 1982. Subjective probability and the theory of games: comments on Kadane and Larkey's paper. Management Sci. 28 120–124; Harsanyi, J. C. 1982. Rejoinder to Professors Kadane and Larkey. Management Sci. 28 124–125.) on the relative usefulness of game theory and decision theory for analyzing decisions in competitive situations. This note comments on some of the arguments used in that exchange with particular emphasis on bidding theory. It then proposes the development of models in which both rational analysis of a model of the competitive situation as well as other factors influence the competitors. Two such models are described.
The Confusion of Is and Ought in Game Theoretic Contexts
Authors: Kadane Joseph B. , Larkey Patrick D.
Published: November 2008

This paper explores the distinction between normative and positive theoretical statements in a game theoretic context from a Bayesian perspective. Normative and positive theoretical statements are often confused in decision making research. The confusion results from some unique epistemological and methodological problems associated with cognitive behavior as an object for scientific inquiry. The confusion persists because of poor model validation procedures which are themselves further complicated by the confusion. The confusion greatly impedes the development of more useful prescriptions for and predictions of human decision behavior. From a Bayesian perspective which acknowledges the importance of incomplete information and imperfect theories of behavior, the confusion is unnecessary.
Conjoint Analysis: A Comparative Analysis of Specification Tests for the Utility Function
Authors: Corstjens Marcel L. , Gautschi David A.
Published: November 2008

The focus of this paper is on determining appropriate combination rules for idiosyncratic ordinal utility functions in conjoint measurement. An axiomatic diagnosis is used which is based on explanatory criteria rather than goodness-of-fit or predictive criteria. Experimental results are presented comparing the selection of combination rules based on axiomatic tests and empirical fitting procedures for additive (x + y + z) and distributive (x(y + z)) combinations of three factors. A number of conflicting diagnoses result from the simultaneous applications of axiomatic tests and goodness-of-fit criteria, suggesting the importance of testing certain necessary conditions for simple polynomial combination rules, such as additive and distributive rules. Because the axiomatic approach is effective in rejecting inappropriate functional forms, we argue that it should complement rather than replace the empirical fitting diagnostic approaches.
Techniques for Facilities Layout: Deciding which Pairs of Activities Should be Adjacent
Authors: Foulds L. R.
Published: November 2008

This paper surveys work done to date on the problem of laying out the facilities of some system in terms of specifying which activities are to be adjacent. Each pair of facilities has a closeness rating which represents the desirability that they are located adjacently. Ratings are usually proportional to the flow of goods or people between facilities. The aim of the layout analyst is to design a system so that the sum of the ratings of adjacent pairs is maximized as this represents travel saved. This paper formulates the layout problem and reviews exact and heuristic methods of solution. In the literature review special emphasis is placed on the newly-emerging graph-theoretic techniques which appear promising.
An Algorithm for Multiobjective Zero-One Linear Programming
Authors: Kiziltan Gülseren , Yucaoğlu Erkut
Published: November 2008

A branch and bound algorithm is presented which is based on the extension of implicit enumeration techniques to multiobjective zero-one linear programming and which appears to be computationally quite efficient. Domination tests, aiming at identifying paths of the enumeration tree that lead to dominated solutions as high up the tree as possible, are developed. Some computational results are also given.
State of the Art—Encoding Subjective Probabilities: A Psychological and Psychometric Review
Authors: Wallsten Thomas S. , Budescu David V.
Published: November 2008

In order to review the empirical literature on subjective probability encoding from a psychological and psychometric perspective, it is first suggested that the usual encoding techniques can be regarded as instances of the general methods used to scale psychological variables. It is then shown that well-established concepts and theories from measurement and psychometric theory can provide a general framework for evaluating and assessing subjective probability encoding. The actual review of the literature distinguishes between studies conducted with nonexperts and with experts. In the former class, findings related to the reliability, internal consistency, and external validity of the judgments are critically discussed. The latter class reviews work relevant to some of these characteristics separately for several fields of expertise. In die final section of the paper the results from these two classes of studies are summarized and related to a view of vague subjective probabilities. Problems deserving additional attention and research are identified.
Optimal Entering Rules for a Customer with Wait Option at an M/G/1 Queue
Authors: Mandelbaum Avishai , Yechiali Uri
Published: November 2008

A “smart” customer arrives at an M/G/1 queue. While every other arrival joins the system unconditionally, our customer is allowed to choose among three alternatives: (i) he may Enter the queue and stay there until his service is completed, (ii) he may Leave the system right away, or (iii) he may Wait outside the queue. If he Enters or Leaves the system, his decision is final and no further actions are taken. If he chooses to Wait, he makes a new decision at the next service completion where he may, again, select one of the three options: Enter, Leave, or Wait.

For a linear cost structure we show that for any n-period horizon (0 < n < ∞) the individual customer's optimal strategy is a 3-region (possibly degenerate) policy by which he Enters a small queue, Leaves a large one and Waits when the queue is of an intermediate size. We also give a necessary and sufficient condition for the Wait option to exist.

The special M/M/1 queue is further analyzed by allowing the Waiting customer to make decisions at instants of customers' arrivals as well as at instants of service completion. In this case, too, the optimality of the 3-region policy is derived and the “smart” customer dichotomy is recognized as the Gambler's Ruin problem.

Computational procedures are developed and numerical results are presented for commonly used service time distributions.
A Transportation Type Aggregate Production Model with Backordering
Authors: Posner Marc E. , Szwarc Wlodzimierz
Published: November 2008

In this paper we consider a certain aggregate production planning model. This model permits regular and overtime production and allows for backordering of goods for a number of periods. Although the discussed model can be formulated as a linear programming problem a special (noniterative) method is developed. First the optimal level of each mode of production is determined for each period. Then the complete solution is immediately constructed. This procedure is so simple that it can be also implemented via pencil and paper. Several computational improvements as well as problem variations are discussed.
Rolling Horizon Procedures for the Facilities in Series Inventory Model with Nested Schedules
Authors: Chand Suresh
Published: November 2008

This paper develops rolling horizon procedures for solving a multistage inventory problem with facilities-in-series. In such an inventory system, we assume that the raw material is processed successively through several facilities before reaching the customer. The input to a facility comes from one preceding facility (or the raw material) and the output from the facility goes to one succeeding facility (or the customer). The rolling horizon procedures form rolling production schedules by solving a finite horizon multiperiod problem and implementing only the first period's decisions. One period later, the multiperiod problem is updated as better forecasts become available and the process is repeated.

The paper considers a simple case when holding costs are linear, production costs on a facility consist of a setup cost and a constant marginal cost of production, and production and holding costs are stationary in time. Demand is allowed to be nonstationary in time. Several rolling horizon procedures are developed for this case and a computational comparison is given.
The Budget-Limit Effect on the Delegation of the Capital Budgeting Authority: The Case of Sequential and Frequent Investment Decisions
Authors: Sharon Ed M.
Published: November 2008

Publishing houses, Savings & Loans and other business firms make frequent long-term investment decisions, and in sequence. Typically they encounter more short-lived investment opportunities than their budget can accommodate. Some will even go out of their way to broaden their horizon of choices. As a result, one will find some organizations which satisfy their needs by choosing opportunities from a relatively narrow horizon, and others which are engaged in an extensive evaluation process whose objective is to gradually narrow down the options available. The latter effort typically covers various layers in the organizations, both at the division (branch) and headquarters (HQ).

Common sense may suggest that the more limited capital resources are, the larger should be the set of explored opportunities, and the more careful (centralized) should the decision making process be. A quantitative approach to the problem is presented here, which captures the relationships between investment-opportunities-horizon “size” and “quality,” the value of funds to be invested, the cost of narrowing the options down, and the limits to centralization/decentralization, all under a limited budget. It demonstrates that under certain conditions the intuitively optimal mode of centralization becomes less than optimal, and decentralization is the rational and consistent mode. Other difficult questions such as “how broad is a broad enough horizon of choices?” are addressed.
Discounting of Life-Saving and Other Nonmonetary Effects
Authors: Keeler Emmett B. , Cretin Shan
Published: November 2008

Cost-effectiveness analysts generally assume that preferences over time are such that streams of monetary and nonmonetary program effects can be reduced to one discounted sum of monetary costs and another of effects. It is known that if the nonmonetary effects can be cashed out in a way that does not vary with time, then the rates of discount for monetary and nonmonetary effects have to be equal. This paper presents a more compelling argument for the equality of those rates when hard to monetize benefits such as life-saving are involved. It shows that if the ability to produce the nonmonetary effect does not diminish too quickly over time, failure to discount benefits implies that programs are always improved by delay. In general, discounting benefits and costs at different rates can lead to peculiar results.
An Optimization Model for Production Costing in Electric Utilities
Authors: Ammons J. C. , McGinnis L. F.
Published: November 2008

Estimating the annual production cost is a crucial component in long range capacity planning for electric utilities. Traditional simulation-based methods are quite expensive in terms of computer resources (space and time), while simpler mathematical programming-based models generally assume a linear variable production cost. This paper presents a method that incorporates quadratic production costs for each unit and uses optimization submodels to develop a system production cost versus output curve. The method is tested using data from a large southeastern utility. Production cost estimates within one percent of the estimates from a large simulation model were obtained with a small fraction of the simulation model's computing time. The concluding section discusses how the new method might be incorporated in procedures for capacity planning.
A Fuzzy Set Approach to Aggregating Internal Control Judgments
Authors: Cooley John W. , Hicks James O.
Published: November 2008

Internal control evaluation traditionally has been an integral part of an audit to provide an opinion on an entity's financial statements. Essentially, internal control evaluation is used to determine the substantive testing necessary to render an opinion on the financial statements. With the passage of the Foreign Corrupt Practices Act (FCPA) and recent proposals of the SEC, internal control evaluation has gained new impetus. These events may lead to the independent auditor being required to provide an internal control opinion separate from a financial statement audit. Consequently, the auditor may be required to aggregate the evaluation of system parts into a statement as to the performance of the system or major subsystem as a whole in addition to the reports currently made to management on the adequacy of internal control. Although mathematical models for internal control evaluation have been proposed, these have failed to receive acceptance by auditors. As an alternative to these models, this paper proposes the use of a procedure for aggregating the evaluation of parts of an internal control system employing the linguistic values commonly in use by auditors such as “strong,” “weak,” and “adequate.” The linguistic model (1) uses the theory of fuzzy sets to aggregate these common linguistic values and (2) returns a linguistic aggregate evaluation of the control system under review. A cash receipts and shipping control system is used in a numerical illustration and future research directions are proposed.
Discrete Approximations of Probability Distributions
Authors: Miller Allen C. , Rice Thomas R.
Published: November 2008

Practical limits on the size of most probabilistic models require that probability distributions be approximated by a few representative values and associated probabilities. This paper demonstrates that methods commonly used to determine discrete approximations of probability distributions systematically underestimate the moments of the original distribution. A new procedure based on gaussian quadrature is developed in this paper. It can be used to decrease the error in the approximation to any desired level.
A Spatial Model of Effectiveness Criteria: Towards a Competing Values Approach to Organizational Analysis
Authors: Quinn Robert E. , Rohrbaugh John
Published: November 2008

This paper presents a framework for organizational analysis. The empirically derived approach does not emerge from the observation of actual organizations, but from the ordering, through multivariate techniques, of criteria that organizational theorists and researchers use to evaluate the performance of organizations.

In a two-stage study, organizational theorists and researchers were impaneled to make judgments about the similarity of commonly used effectiveness criteria. The model derived from the second group closely replicated the first, and in convergence suggested that three value dimensions (control-flexibility, internal-external, and means-ends) underlie conceptualizations of organizational effectiveness.

When these value dimensions are juxtaposed, a spatial model emerges. The model serves a number of important functions. It organizes the organizational effectiveness literature, indicates which concepts are most central to the construct of organizational effectiveness, makes clear the values in which the concepts are embedded, demonstrates that the effectiveness literature and the general literature on organizational analysis are analogues of one another, and provides an overarching framework to guide subsequent efforts at organizational assessment.
Note—On Baluts Algorithm and NP-Completeness for a Chance-Constrained Scheduling Problem
Authors: Kise Hiroshi , Ibaraki Toshihide
Published: November 2008

In 1973, Balut gave an algorithm to solve an n-job one machine scheduling problem in which processing times are random variables and the objective is to minimize the number of tardy jobs with a specified certainty level. This note, however, presents an example for which his algorithm fails to give an optimal schedule. Furthermore, there does not seem to exist any such efficient algorithm because the problem can be shown to be NP-complete.
Untold Horrors of the Waiting Room: What the Equilibrium Distribution Will Never Tell About the Queue-Length Process
Authors: Whitt Ward
Published: November 2008

This paper cautions against using only the equilibrium distribution to describe the behavior of a queue. It is suggested that fluctuations in the queue-length process should also be described, for example, by various first-passage-time distributions. The range of possible fluctuations associated with a given equilibrium queue-length distribution is described for the GI/M/1 queue. The theory of complete Tchebycheff systems in Karlin and Studden [Karlin, S., W. J. Studden. 1966. Tchebycheff systems: with applications in analysis and statistics. John Wiley and Sons, New York.] is applied to construct appropriate extremal distributions, i.e., interarrival-time distributions having the given equilibrium queue-length distribution and maximum or minimum values of fluctuation measures such as the relaxation time.
On the Diffusion of Computer Terminals in an Established Engineering Environment
Authors: Randles F.
Published: November 2008

The introduction of new technologies in existing administrative and technical organizations usually represents a significant investment in equipment and training. A prudent manager will attempt to acquire the equipment needed fast enough to encourage its use while avoiding the inefficiencies of under-utilization. This paper presents a method of applying a mathematical model to the specific problem of predicting the approximate rate at which additional computer terminals should be acquired. The model used is in the form of a “logistics” or “diffusion” function. To apply the model to the Aerospace division of a company, a “calibration” of that organization was required. A questionnaire on the use of hand calculators was submitted to a sample group. At the time of the study, hand calculators had virtually displaced slide rules and desk top adding machines, and about 15 percent of the organization was competing for available terminals of the central computer system. Increased use of terminals and on-line computing was anticipated. The response of the organization to the hand calculator innovation was established by determining a “logistics” or “diffusion” function to fit the sample data. The function was modified to accommodate the additional complexity of the more sophisticated computational capability and then used to predict terminal requirements.

This study was undertaken to satisfy a management need to plan for its investment in terminals. At the introduction of an interactive computing system, terminals were requested for individuals or projects. As the number of terminals increased, the number of qualifed users increased faster, and requests for terminals became more numerous. Justifications frequently appeared to be overlapping or duplicative. At this point, a better perspective of the money needed was required, and the study was initiated. The results of the study, together with user requirements data, have been used to expedite the acquisition of terminals.
Flow Shop Problems with Time Lags
Authors: Szwarc Wlodzimierz
Published: November 2008

This paper defines a model that covers the multimachine extensions of all existing flow-shop problems with time lags as well as flow-shop problems where setup, processing and release times are separated. Approximate solutions and lower completion time bounds are developed for the restricted and unrestricted cases.
State of the Art—Location on Networks: A Survey. Part I: The p-Center and p-Median Problems
Authors: Tansel Barbaros C. , Francis Richard L. , Lowe Timothy J.
Published: November 2008

Network location problems occur when new facilities are to be located on a network. The network of interest may be a road network, an air transport network, a river network, or a network of shipping lanes. For a given network location problem, the new facilities are often idealized as points, and may be located anywhere on the network; constraints may be imposed upon the problem so that new facilities are not too far from existing facilities. Usually some objective function is to be minimized. For single objective function problems, typically the objective is to minimize either a sum of transport costs proportional to network travel distances between existing facilities and closest new facilities, or a maximum of “losses” proportional to such travel distances, or the total number of new facilities to be located. There is also a growing interest in multiobjective network location problems.

Of the approximately 100 references we list, roughly 60 date from 1978 or later; we focus upon work which deals directly with the network of interest, and which exploits the network structure. The principal structure exploited to date is that of a tree, i.e., a connected network without cycles. Tree-like networks may be encountered when having cycles is very expensive, as with portions of interstate highway systems. Further, simple distribution systems with a single distributor at the “hub” can often be modeled as star-like trees. With trees, “reasonable” functions of distance are often convex, whereas for a cyclic network such functions of distance are usually nonconvex. Convexity explains, to some extent, the tractability of tree network location problems.
An Interactive Multiple Objective Linear Programming Method for a Class of Underlying Nonlinear Utility Functions
Authors: Zionts Stanley , Wallenius Jyrki
Published: November 2008

This paper develops a method for interactive multiple objective linear programming assuming an unknown pseudo concave utility function satisfying certain general properties. The method is an extension of our earlier method published in this journal (Zionts, S., Wallenius, J. 1976. An interactive programming method for solving the multiple criteria problem. Management Sci. 22 (6) 652–663.). Various technical problems present in predecessor versions have been resolved. In addition to presenting the supporting theory and algorithm, we discuss certain options in implementation and summarize our practical experience with several versions of the method.
Development of a Tool for Measuring and Analyzing Computer User Satisfaction
Authors: Bailey James E. , Pearson Sammy W.
Published: November 2008

This paper reports on a technique for measuring and analyzing computer user satisfaction. Starting with the literature and using the critical incident interview technique, 39 factors affecting satisfaction were identified. Adapting the semantic differential scaling technique, a questionnaire for measuring satisfaction was then created. Finally, the instrument was pilot tested to prove its validity and reliability. The results of this effort and suggested uses of the questionnaire are reported here.
Cognitive Style and DSS Design: A Comment on Huber's Paper
Authors: Robey Daniel
Published: November 2008

The paper by Huber (Huber, G. P. 1983. Cognitive style as a basis for designing MIS and DSS: much ado about nothing? Management Sci. 29 (5) 567–579.) stimulates further comment. While his conclusions that cognitive styles research has not served and will not serve as a satisfactory basis for operational DSS design guidelines appear justified, some additional points need to be made. This paper looks at several of Huber's arguments more closely and suggests a potentially valuable role for cognitive style awareness in the DSS development process.
Three-Point Approximations for Continuous Random Variables
Authors: Keefer Donald L. , Bodily Samuel E.
Published: November 2008

This paper compares a number of approximations used to estimate means and variances of continuous random variables and/or to serve as substitutes for the probability distributions of such variables, with particular emphasis on three-point approximations. Numerical results from estimating means and variances of a set of beta distributions indicate surprisingly large differences in accuracy among approximations in current use, with some of the most popular ones such as the PERT and triangular-density-function approximations faring poorly. A simple new three-point approximation, which is a straightforward extension of earlier work by Pearson and Tukey, outperforms the others significantly in these tests, and also performs well in related multivariate tests involving the Dirichlet family of distributions. It offers an attractive alternative to currently used approximations in a variety of applications.
A Bayesian Technique for Selecting a Linear Forecasting Model
Authors: Trader Ramona L.
Published: November 2008

The specification of a forecasting model is considered in the context of linear multiple regression. Several potential predictor variables are available, but some of them convey little information about the dependent variable which is to be predicted. A technique for selecting the “best” set of predictors which takes into account the inherent uncertainty in prediction is detailed. In addition to current data, there is often substantial expert opinion available which is relevant to the forecasting problem. The approach taken here utilizes both data and expert judgment by incorporating them into a Bayesian predictive distribution. Precise forecasting models are constructed by selecting the set of predictors which minimizes a measure of variability in prediction. An empirical demonstration of the technique is provided.
Problem Formulation in Planning and Design
Authors: Volkema Roger J.
Published: November 2008

This paper deals with the role of problem formulation in planning and design, including: (a) the importance of problem formulation to planning and design; (b) problematic, physiological, psychological and environmental factors that can affect the formulation process; and (c) problem formulation heuristics. Two types of formulation heuristics are identified—problem reduction and problem expansion. Because the latter type has received little empirical research, an initial study of a problem expansion heuristic (Problem-Purpose Expansion) was conducted. Experimentation showed that Problem-Purpose Expansion may have a positive effect on idea generation, particularly for individuals working on problems that fall outside their area of expertise. Exhorting the importance of problem formulation, a second treatment studied in these experiments, produced little measurable effect on idea generation.
Measuring the Effects of a University Planning Decision Aid
Authors: Dickmeyer Nathan
Published: November 2008

University administrators involved in budget planning must trade off variables such as faculty size, faculty salary increments, tuition increases, and investment in new initiatives. TRADES is a computer-based, interactive financial model designed to assist in making trade-offs and finding preferred feasible solutions. This paper presents the results of an experiment to test the significance of preference changes resulting from the use of the TRADES model.

In this experiment, 38 subjects were divided into two groups, one provided with TRADES and the other only with a printed university projected forecast. The subjects were asked to rank-order 27 different five-year financial policies. The two groups were compared using the preference function assessment technique of Srinivasan and Shocker. The policy preference changes by TRADES users were found to be significantly greater than the preference changes by nonusers. That is, the experience of using the TRADES model to assess budget policy altered the choice of preferred policy.

The implication of this experiment is that the preference functions evolve as better understanding is reached of trade-offs and constraints. Therefore, simply eliciting preference functions and then running a model is not sufficient in situations in which learning can take place.
A Differential Games Solution to a Model of Competition Between a Thief and the Police
Authors: Feichtinger Gustav
Published: November 2008

This paper contains an extension of an optimal control model considered by Sethi (Sethi, S. P. 1979. Optimal Pilfenng policies for dynamic continuous thieves. Management Sci. 25 (6, June) 535–542.) to a differential game situation. It is assumed that Sethi's concave thief, i.e., a risk-averter, plays against the police, whose objective function incorporates convex costs of law enforcement, a one-shot utility at the time of arrest and a continuous utility or cost rate after the thief is arrested. The probability that the thief is caught by time t is influenced not only by the pilfering rate (as is the case in Sethi's model) but also by the instrumental variable of the police, namely its rate of law enforcement.

Our aim is to analyze noncooperative Nash solutions of the differential game sketched above. Due to the special structure of the Hamiltonians, a system of two nonlinear differential equations for the control variables of both players can be derived. The system is solved explicitly under special assumptions. It is shown that the optimal rate of law enforcement of police increases monotonically whereas for the Nash-optimal pilfering rate three cases may be characterized in which increase, decrease or constancy occur. Thus the Nash-optimal solutions show in each case monotonic behavior, i.e., changes in trend never occur. Moreover, the dependency of the terminal values of control can be described. Finally, an interpretation of the model as market entrance game is sketched.
Computing Optimal Control Limits for GI/M/S Queuing Systems with Controlled Arrivals
Authors: van Nunen J. A. E. E. , Puterman Martin L.
Published: November 2008

We consider a GI/M/s queuing system that is controlled by either accepting or rejecting arriving customers. Under weak conditions on the cost structure, Stidham (Stidham, S., Jr., 1978. Socially and individually optimal control of arrivals to a GI/M/1 queue. Management Sci. 24 1598–1610.) showed that a control limit policy is optimal. In this paper we show how the special structure of this queuing system can be exploited to develop efficient procedures to determine an optimal control limit. An explicit algorithm for computing the optimal control as well as an example and some computational results are included.
Improving the Consistency of Conditional Probability Assessments for Forecasting and Decision Making
Authors: Moskowitz Herbert , Sarin Rakesh K.
Published: November 2008

“Public agencies are very keen on amassing statistics—they collect them, add them, raise them to the nth power, take the cube root and prepare wonderful diagrams. But what you must never forget is that every one of those figures comes in the first instance from the village watchman, who just puts down what he damn pleases.” (Sir Josiah Stamp)

The assessment of the conditional probabilities of events is useful and needed for forecasting, planning, and decision making. In this paper the difficulties associated with the assessment of these conditional probabilities are examined. The necessary and sufficient conditions that the elicited information on conditional probabilities must satisfy are evaluated against actual assessments in several different controlled settings. A high frequency of implicit violations of the probability calculus was observed. The consistency of the assessments is affected by the causal/diagnostic and positive/negative relationships of the events. Use of a judgmental aid in the form of a joint probability table reduces the number of inconsistent responses significantly. Using the probability axioms, it is also shown that only the first order conditional probabilities need be assessed, as higher order probabilities are robust to the unconditional and first order conditional assessments.
Business Unit Strategy and Changes in the Product R&D Budget
Authors: Hambrick Donald C. , MacMillan Ian C. , Barbosa Ricardo R.
Published: November 2008

This study of changes in Product R&D intensity in business units supplements past studies by including two major classes of independent variables which have not been examined previously: the competitive strategy of the business and role of the business in the overall corporate portfolio. Multiple regression analysis is used on a sample drawn from the PIMS data base. The results suggest that R&D decisions in growth businesses are responsive to competition, evolving strategies, and intra-firm resource flows. In mature businesses, a pattern of stability and R&D equilibrium is evident, even in the face of changes by competitors. Managerial implications are noted.
The Optimal Selection of Small Portfolios
Authors: Blog B. , van der Hoek G. , Rinnooy Kan A. H. G. , Timmer G. T.
Published: November 2008

Portfolios that are risk-return efficient in the sense of Markowitz sometimes contain too many securities to be attractive to the small investor. An optimal portfolio subject to a size constraint can be found by an implicit enumeration algorithm, that is much faster than a previous approach and moreover allows the inclusion of securities whose β-coefficient is negative. A simple and computationally very efficient heuristic method that almost always produces optimal portfolios is described as well.
Constructing a Complex Judgmental Model: An Index of Trauma Severity
Authors: Fryback Dennis G. , Keeney Ralph L.
Published: November 2008

The modeling of many complex phenomena necessarily relies on numerous interrelated judgments. This paper illustrates an application of the concepts of multiattribute utility assessment, based on the professional judgments of one physician, to scale the trauma severity of injuries to individuals. Special attention is given to problems not usually present or reported in applications of the assessment techniques. These include nonmonotonic functions, strong dependencies among different measures, and the state dependence of trauma severity on age and existing diseases of the individual. The manner in which these complexities were addressed is indicated.
Supply, Storage, and Service Reliability Decisions by Gas Distribution Utilities: A Chance-Constrained Approach
Authors: Guldmann Jean-Michel
Published: November 2008

This paper explores the trade-offs among purchases, storage, and service reliability decisions faced by natural gas distribution utilities. The short-term demand for natural gas fluctuates because of the weather. To encourage load leveling, the pipeline transmission companies that supply the utilities use a demand contract that charges utilities based on their peak day needs and often charge for a minimum daily purchase requirement whether that purchase is made or not. The policy variables available to the utility include increasing its storage capacity and providing interruptible service to some customers thereby lowering reliability of service. There are also technological constraints on the maximum storage gas flows.

To explore these trade-offs, a chance-constrained cost minimization problem is formulated. Two decision rules for gas purchases and storage operation are examined. In these rules, an initial decision is made at the beginning of each month about either the level of purchases or the level of storage flow for that month. The two rules differ in that the supplier is assumed either to be able to adjust sales during the month up to the limit set by the demand contract or to be inflexible. In the latter case, storage must provide flexibility for meeting demand.

Solutions have been obtained under the conditions that apply to the East Ohio Gas Company. A large number of cases have been considered for several levels of increased storage capacity, decreased reliability of service, and conversion capability from gas to oil for commercial and industrial customers. The results show the breakeven points in storage costs under which various policies become feasible and the savings that can be achieved.
Equilibrium Strategies for Final-Offer Arbitration: There is no Median Convergence
Authors: Brams Steven J. , Merrill Samuel
Published: November 2008

Final-offer arbitration is a procedure for settling disputes between two parties in which an arbitrator chooses the final offer of the party closest to what he considers a fair settlement. This procedure is modeled as a two-person, zero-sum game of imperfect information, in which the parties are assumed to know the probability distribution of the arbitrator's fair settlements and to make bids in an infinite strategy space that maximize their expected payoffs. Necessary and sufficient conditions for there to be local and global equilibria in pure strategies are derived, and necessary conditions for mixed strategies in a particular case are found. Such equilibria, when they exist in pure strategies, represent bids which are symmetric about the median and, for most common distributions, are separated from one another by two or more standard deviations. This finding suggests that final-offer arbitration may not accomplish its avowed purpose of inducing the two parties to converge on what they perceive to be the arbitrator's median fair settlement.
Manufacturing Technology in the 1980's: A Survey of Federal Programs and Practices
Authors: Hetzner William A. , Tornatzky Louis G. , Klein Katherine J.
Published: November 2008

This study describes the U.S. government's role in the development of manufacturing technologies and in the transfer of manufacturing innovations to private industry. The goals, organization, technologies, methods of technology transfer, user groups, and methods of program assessment for 13 government programs in this area are described and their implications for national manufacturing innovation and productivity are discussed.