bluuebunny/crossref_metadata_2025 huggingface dataset:
Note—A Preference Ranking Organisation Method
Authors: Brans J. P. , Vincke Ph.
Published: November 2008

Principles for a new family of outranking methods are given. The main aim of the proposed PROMETHEE approach is to be as easily understood as possible by the decision-maker. It is based on extensions of the notion of criterion. Six possible extensions are considered. These extensions can easily be identified by the decision-maker because the parameters to be defined (at most 2) have an economic significance. A valued outranking graph is constructed by using a preference index. Two possibilities are considered to solve the ranking problem by using this valued graph. PROMETHEE I provides a partial preorder and PROMETHEE II a total preorder on the set of the possible actions.
Multi-Agent Customer Allocation in a Stochastic Service System
Authors: Lee Hau Leung , Cohen Morris A.
Published: November 2008

In many service systems, customers interact with an agent who directs customers to specific service facilities. Each agent, as a decision maker, seeks to allocate his/her customers to the service centers so as to optimize a measure of performance based on the customers’ expected waiting time and the expected number of customers in service. In this paper, the problem of multiple agents, each optimizing his/her customer allocation decision in a stochastic service system, is analyzed as a noncooperative game. It is shown that an equilibrium point to such a game exists and sufficient conditions for which this equilibrium point is unique are also given. Finally, the relative efficiency of the multi-agent system is examined by comparing the customers’ average waiting time in the multi-agent system to the one-agent case. It is shown that, in general, the multi-agent system is not as efficient as the one-agent one in terms of customer welfare.
Risk/Return Performance of Diversified Firms
Authors: Bettis Richard A. , Mahajan Vijay
Published: November 2008

Based on a sample of 80 firms, this paper examines the risk/return performance of related and unrelated diversified firms at the level of accounting data. The results suggest that although on the average related diversified firms outperform unrelated diversified firms, related diversification offers no guarantee of a favorable risk/return performance. (Many low performers are related diversifiers.) In fact, different diversification strategies can result in similar risk/return performance. However, a favorable risk/return performance is extremely hard to achieve with unrelated diversification. The study identifies diversified firms that have managed to simultaneously reduced risks and increase returns. The results indicate that these firms differ from other firms on some managerially useful dimensions. The differences suggest clues to guide other diversified firms to improve their risk/return performance.
Parallel Funding of R&D Tasks with Probabilistic Outcomes
Authors: Bard Jonathan F.
Published: November 2008

This paper addresses the problem commonly faced by R&D managers of funding redundant R&D tasks across several stages or components of a project. In the proposed methodology it is assumed that task outcomes are random, but that their distribution can be determined from engineering inputs. In order to account for individual preferences a utility function is used to measure overall project results, and hence guide the decisions at each stage. The problem is formulated as a probabilistic network and solved by means of a heuristic comprising simulation and dynamic programming. Although computational experience is limited, the results obtained from a number of examples associated with the development of a photovoltaic solar module were quite promising; that is, the heuristic always found the optimal investment plan. In general, computational times were minimal when compared to data collection efforts, with the latter perhaps being the principal hurdle to full implementation. The sponsoring organization, however, felt that the unified approach offered by the methodology represented a major improvement over current analytic techniques.
Applications of Integer Programming in Radio Frequency Management
Authors: Mathur Kamlesh , Salkin Harvey M. , Nishimura Koichi , Morito Susumu
Published: November 2008

The radio frequency communication environment, for example, in large vessels, aircraft, space vehicles, and satellites, has become increasingly complex as more and more transmitters, receivers, and corresponding communication nets are being added to perform multiple functions. This paper discusses some of the problems faced by a decision maker in managing a communication network. A particular and important problem worth investigating occurs when different frequencies are simultaneously active in a network. This may cause various types of interference creating a disturbance in communication. One interesting and important type of interference, which may be expressed mathematically, is intermodulation. A typical problem scenario is thus to assign frequencies to the different nets of the network so that intermodulation interference is within desirable limits. A second problem is to add a net to an existing network, with previously assigned frequencies, so that the new net produces an acceptable level of intermodulation interference. Besides these, other related problems may be defined. For many problem scenarios, related integer nonlinear programming models may be derived. These models, corresponding algorithms and related software are discussed.
Focused Scheduling in Proportionate Flowshops
Authors: Ow Peng Si
Published: November 2008

The proportionate flowshop is a special class of flowshops in which the operation times of jobs are proportionate, e.g., because of differences in the speeds of machines. In this paper, we make use of a special property of proportionate flowshops, namely that the bottleneck in the shop is almost always the one where job operations are proportionately longer than for any other operations (the slowest machine) to demonstrate a scheduling procedure that makes scheduling decisions by focusing on the information and consequences at the bottleneck resource. This is called the Focused Approach. The scheduling objective is to minimize the total tardiness cost of jobs, where each job may have a different tardiness cost. The decision rule used in this approach is the Idle Time Rule whose development is described in this paper. The approach was tested using approximately proportionate flowshops of different sizes. The results obtained for small 3-machine problems were compared against the optimal permutation schedules obtained using Branch-and-Bound and was found to be near-optimal. For larger problems using 4- and 8-machine flowshops, the results were compared to five other scheduling methods. The focused approach performed far better than those other scheduling methods not only in minimizing tardiness cost, but also minimizing the percentage of tardy jobs and the percentage of processing time to work-in-process time. Finally, the two-product shop where the bottleneck was dynamic was studied and, using a simple strategy to track bottlenecks, the focused approach was again found to perform well compared with other heuristic methods.
On Approximate Queueing Models of Dynamic Job Shops
Authors: Buzacott J. A. , Shanthikumar J. G.
Published: November 2008

In this paper we consider a class of job shops with a dispatch area and a machine shop, where operational controls are exercised at the dispatch area as well as at the machine shop. For such dynamic job shops with these two levels of control, there are three categories of models. They are (1) pseudo-static, (2) pure dynamic, and (3) pseudo-dynamic. In this paper approximate queueing models are developed for pure dynamic and pseudo-dynamic job shops; open queueing network models and controlled arrival single stage queueing models, respectively. The accuracy of the open queueing network models and their use are illustrated. An example indicative of the possible accuracy of the controlled arrival single stage queueing models is also given.
Rationality in the Analysis of Behavioral Simulation Models
Authors: Morecroft John D. W.
Published: November 2008

An important task in the analysis of a behavioral simulation model is to explain clearly how the model’s organizational assumptions lead to its simulated behavior. All too often, model-based arguments involve an uncomfortable “leap of logic” between equations and consequences. This paper proposes two methods of analysis, premise description and partial model testing, which provide stepping stones between model equations and their simulated consequences. Premise description examines the bounded rationality of policies or decision functions in the model, pointing out the process and cognitive limitations assumed in decisionmaking. Partial model tests expose the intended rationality of smalt combinations of policies, showing that policies produce “sensible” actions with respect to their premises. The application of those methods is illustrated with a simulation model of a sales organization in which sales-force productivity is prone to decline. The behavior of productivity is traced to dysfunctional interactions between objectives, overtime, and salesforce motivation.
Investment Planning and Arm's Length Control in a Nationalised Industry
Authors: Lioukas Spyros K.
Published: November 2008

Applying a relatively decentralised system of control which would keep state-owned enterprises (SOE) at arm's length from ministerial departments has been a stated policy for many governments around the world. However, the specific controls typically used for implementing this policy have seldom been successful. The purpose of this paper is to review and evaluate certain of these controls, drawing upon the British system of arm's length control of nationalised industries. In order to delimit the problem the paper cuts across the government-SOE relationship from the perspective of investment planning. Using primary information from the capital investment process in a particular nationalised industry, the paper searches for evidence on whether and in what ways existing controls have not been successful.

Three types of controls are investigated: (1) The economic and financial groundrules, which are supposed to simulate a competitive, business-style efficiency. These rules are often assumed to act as an “invisible hand,” limiting direct government control. (2) The direct investment review, in the framework of the wider public sector expenditure survey. In discussing the nature of this review the paper examines whether government approval of investment conforms to an incrementalist or “muddling through” model. It further considers the role for incremental methods in controlling SOE investment. (3) The attempt to use corporate planning as a control instrument. Evidence from internal control processes within the enterprise and in particular the review of investment by a Central Executive is used in order to evaluate the above controls. This serves to show the diffuse character of the planning process and the possibilities and limitations of using similar controls at the government level. Suggestions are put forward for strengthening these forms of control by modifying or reinforcing certain elements within the existing arm's length framework.

The paper would be useful for evaulating the difficulties involved in establishing some form of orderlines and formalisation in government-SOE relationships. It shows some of the weaknesses associated with certain “technocratic” rules and solutions to public policy problems in this environment.
On the Joint Decisions of R&D and Technology Adoption
Authors: Lee Tom K.
Published: November 2008

This paper attempts to bridge the gap between R&D models that do not consider technology adoption decisions and technology adoption models that do not consider R&D decisions. It develops and analyzes a decision-theoretic model on the joint decisions of R&D and technology adoption of a firm.

Two interesting comparative statics results are obtained. First, an increase in the cost of R&D reduces the incentive for a firm to do R&D. Secondly, an increase in the cost of technology adoption or an increase in the market interest rate reduces the incentive for a firm to adopt new technology and also reduces the incentive for a firm to do R&D. Under certain conditions, an increase in the cost of R&D increases the incentive for a firm to adopt new technology.
Investing in Reduced Setups in the EOQ Model
Authors: Porteus Evan L.
Published: November 2008

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.
The Impact of Interorganizational Manpower Flows on the Innovation Process
Authors: Ettlie John E.
Published: November 2008

In a study of 56 food processing firms, respondents reported on manpower flows that had an important influence on innovation decision making. Positive gain manpower flows appear to be a relatively rare occurrence. Only 23 (41%) of these 56 firms report any significant, innovation-impact, personnel additions, and 15 of these involve management positions. Four propositions were tested that focus on the relationship between manpower flows and innovative outcomes of an organization, i.e., offering new products and incorporating new processes. Moderate support was found for the proposition that net gain manpower flows are more likely to be related to radical as opposed to incremental process adoption. Evidence suggests that there is an inverted “u” shaped relationship between, net manpower flows and innovation outcomes. New blood stimulates innovation up to a point after which there is disruption to the innovation process. Adding too many people at once who all have a significant influence on the process may be unwise.

The impact of manpower flows on innovative outcomes appears to be moderated by organization structure and the availability of slack resources for innovating. In particular, net manpower flows were significantly more likely to be positively correlated with the sum of the staged adoption behaviors for the retort pouch in decentralized (p ≤ 0.05) and complex (p < 0.01) organizations. This and other evidence suggest that structural autonomy and new job titles with substantial visibility in the firm can go far to accommodate newcomers and capture the innovative benefits of their arrival. The availability of slack resources strengthens the relationship between the adoption of the retort pouch and net manpower flows although the effects were not as strong (p < 0.10) as for the structural moderators. This supports the common sense notion that newcomers who have had a significant effect on innovative decision making will see these decisions implemented in organizations that allocate resources to innovating.
Optimal Compensation for Data-Sharing in Registration Processes
Authors: Brockhoff Klaus
Published: November 2008

Data-sharing is suggested or required in various registration procedures to avoid parallel testing of possibly dangerous substances. The question arises what the optimal compensation of an imitator to the innovator would be under such conditions. In a first arbitration award a scheme to determine the compensation is given. We develop another scheme on the basis of the Nash-solution for cooperative games. This is discussed with respect to the Shapley value and the core of the game.
Balancing Mixed Model Lines with In-Process Inventories
Authors: Chakravarty Amiya K. , Shtub Avraham
Published: November 2008

This paper deals with mixed-model line balancing; i.e., the problem of combining line balancing with lot sizing in a multi-product environment. Recent developments in the area of multi-echelon production/inventory systems are applied, and algorithms are developed which determine the number of work stations required along the line, the tasks assigned to each station, and the cycle time. The algorithms are designed to minimize total production costs composed of labor costs, inventory carrying costs, and setup costs. Computational results are presented to illustrate the ability of the algorithms to design mixed model lines effectively and efficiently.
Note—Rankings from Round-Robin Tournaments
Authors: Stob Michael
Published: November 2008

In a December 1983 article in Management Science, Stephen Goddard studies the problem of ranking contestants in a round-robin tournament. He gives objections to the usual method of ranking contestants by number of victories and proposes both an alternative method for ranking contestants and a criterion for determining the “fairest” ranking. We argue here that his criterion is faulty and, in fact, falls prey to his own objections. We also show that his method, in any event, produces rankings which don't satisfy the criterion. Finally we describe a general class of models of competition which have been proposed to solve this problem and which lead to the usual method of ranking by number of victories.
Optimal Strategic Petroleum Reserve Policies: A Steady State Analysis
Authors: Oren Shmuel S. , Wan Shao Hong
Published: November 2008

A simple model is presented which allows us to determine the optimal size, fillup, and drawdown rates for a Strategic Petroleum Reserve (SPR) under a variety of supply and demand conditions. The optimal policy variables are determined by minimizing an analytic expression which we derive for the expected insecurity cost rate to the U.S. due to uncertainty in supply of imported oil.

The oil market is modeled in terms of an elastic demand curve and two levels of supply which alternate according to a stationary, continuous time Markov process. The SPR policy is characterized by a fixed fillup rate up to the reserve's capacity, when supply is at its normal level, and a fixed drawdown rate during shortages. The insecurity cost rate being minimized includes consumer welfare loss due to price hikes, reserve holding cost and capital appreciation of the reserve.

Base case results and sensitivity analysis are presented and compared to results obtained by previous approaches. These comparisons suggest that the proposed model can reasonably approximate the more computationally demanding stochastic dynamic programming formulation. The main advantage of the new approach is that it permits extensive sensitivity analysis which is important given the quality of the data.
“Lottery Equivalents”: Reduction of the Certainty Effect Problem in Utility Assessment
Authors: McCord Mark , de Neufville Richard
Published: November 2008

This note describes a simple procedure for assessing utility functions which avoids many difficulties of the standard techniques. The conventional methods suffer from at least three drawbacks; they (1) generate utility functions that depend on the probability levels used; (2) chain responses from one question to the next, so that any bias is propagated and even magnified; and (3) change ranges and reference points constantly, introducing range effects and other distortions. Noting the evidence linking the dependence of utility functions on the “certainty effect,” our method: (1) compares lotteries with other lotteries rather than certain amounts; (2) does not “chain” responses; and (3) consistently uses “elementary lotteries” which control for range and reference points. Experimental work supports the proposed procedure.
An Interactive Branch-and-Bound Algorithm for Multiple Criteria Optimization
Authors: Marcotte Odile , Soland Richard M.
Published: November 2008

We present a new interactive algorithm for multiple criteria optimization. The algorithm is of the branch-and-bound type, and differs from previous interactive algorithms in several ways. First, the field of application is wider because it applies to two important classes of multiple criteria decision problems: those for which the feasible set is convex and those for which the feasible set is discrete. Secondly, the algorithm does not require a great deal from the decision maker; he is merely required to indicate his preference between two vectors whenever the algorithm so demands.
The Dynamics of Plant Layout
Authors: Rosenblatt Meir J.
Published: November 2008

The problem of plant layout has generally been treated as a static one. In this paper, we deal with the dynamic nature of this problem. Both optimal and heuristic procedures are developed for this problem and are based on a dynamic programming formulation. The use of one of these approaches depends on the ability to solve the static problem efficiently. Finally, we briefly discuss the issue of extending the planning horizon, and how to resolve system nervousness when previously planned layouts need to be changed.
A Study of Organizational Effectiveness and its Predictors
Authors: Cameron Kim
Published: November 2008

Some authors have argued that research on organizational effectiveness should cease. This study demonstrates why organizational effectiveness studies are crucial in certain types of organizations, and it points out how many of the weaknesses and criticisms of past investigations can be addressed. The results of this study of 29 organizations indicate that certain managerial strategies are strongly associated with high static scores and with improving effectiveness over time. Managerial strategies, in fact, were found to be more important than structure, demographics, finances, and other factors. Proactive strategies and those with an external emphasis are more successful than internal and reactive strategies. Managerial strategies that are multifaceted are more likely to lead to effectiveness than monolithic strategies.
What is an Attractive Industry?
Authors: Wernerfelt Birger , Montgomery Cynthia A.
Published: November 2008

Business Portfolio Planning techniques often suggest that firms should invest in industries with high profitability, high growth, or other attractive characteristics. Critiquing this view, we suggest that the same factors which lead to high profitability in an industry may cause its inefficient participants to earn lower profits. Higher growth, on the other hand, may benefit inefficient firms while reducing the gains of efficient competitors. The paper offers theory and evidence to support this view of performance dependencies for the special case of diversified firms.
Strategic Factor Markets: Expectations, Luck, and Business Strategy
Authors: Barney Jay B.
Published: November 2008

Much of the current thinking about competitive strategy focuses on ways that firms can create imperfectly competitive product markets in order to obtain greater than normal economic performance. However, the economic performance of firms does not depend simply on whether or not its strategies create such markets, but also on the cost of implementing those strategies. Clearly, if the cost of strategy implementation is greater than returns obtained from creating an imperfectly competitive product market, then firms will not obtain above normal economic performance from their strategizing efforts. To help analyze the cost of implementing strategies, we introduce the concept of a strategic factor market, i.e., a market where the resources necessary to implement a strategy are acquired. If strategic factor markets are perfect, then the cost of acquiring strategic resources will approximately equal the economic value of those resources once they are used to implement product market strategies. Even if such strategies create imperfectly competitive product markets, they will not generate above normal economic performance for a firm, for their full value would have been anticipated when the resources necessary for implementation were acquired. However, strategic factor markets will be imperfectly competitive when different firms have different expectations about the future value of a strategic resource. In these settings, firms may obtain above normal economic performance from acquiring strategic resources and implementing strategies. We show that other apparent strategic factor market imperfections, including when a firm already controls all the resources needed to implement a strategy, when a firm controls unique resources, when only a small number of firms attempt to implement a strategy, and when some firms have access to lower cost capital than others, and so on, are all special cases of differences in expectations held by firms about the future value of a strategic resource. Firms can attempt to develop better expectations about the future value of strategic resources by analyzing their competitive environments or by analyzing skills and capabilities they already control. Environmental analysis cannot be expected to improve the expectations of some firms better than others, and thus cannot be a source of more accurate expectations about the future value of a strategic resource. However, analyzing a firm’s skills and capabilities can be a source of more accurate expectations. Thus, from the point of view of firms seeking greater than normal economic performance, our analysis suggests that strategic choices should flow mainly from the analysis of its unique skills and capabilities, rather than from the analysis of its competitive environment.
A Tight Linearization and an Algorithm for Zero-One Quadratic Programming Problems
Authors: Adams Warren P. , Sherali Hanif D.
Published: November 2008

This paper is concerned with the solution of linearly constrained zero-one quadratic programming problems. Problems of this kind arise in numerous economic, location decision, and strategic planning situations, including capital budgeting, facility location, quadratic assignment, media selection, and dynamic set covering. A new linearization technique is presented for this problem which is demonstrated to yield a tighter continuous or linear programming relaxation than is available through other methods. An implicit enumeration algorithm which uses Lagrangian relaxation, Benders' cutting planes, and local explorations is designed to exploit the strength of this linearization. Computational experience is provided to demonstrate the usefulness of the proposed linearization and algorithm.
A Comparison of Heuristics for Scheduling Projects with Cash Flows and Resource Restrictions
Authors: Russell Robert A.
Published: November 2008

The problem addressed in this paper is the scheduling of activities in a project to maximize net present value given cash inflows, outflows, and resource restrictions. Although optimization procedures exist for small problems of this type, they generally cannot solve large-scale problems and may not be widely available. Six heuristic scheduling rules are compared on 80 test problems. The test problems include large-scale engineering construction projects as well as 50 resource constrained problems from the literature.
Quality Improvement and Learning in Productive Systems
Authors: Fine Charles H.
Published: November 2008

Recent interest in product quality suggests that effort devoted to improving the quality of manufactured products may reduce unit costs. This conjecture—that improving quality can lower costs—challenges the traditional assumption that unit costs increase with increased quality assurance activities and has significant implications for quality management.

By introducing the idea of a quality-based learning curve, this paper links the previously disjoint literatures of quality control and learning curves to explain why high quality and low costs need not be inconsistent. When costs are affected by a quality-based learning curve, product quality favorably influences the rate of cost reduction due to learning. Thus, costs decline more rapidly with the experience of producing higher quality products.

Two formulations of the quality-based learning phenomenon are presented. The first assumes that quality-based experience affects direct manufacturing costs. For this formulation, the optimal quality level is decreasing over time, but is always larger than the optimal base-case quality level. The optimal production quantity is constant if the interest rate is zero and increasing in time when the interest rate is positive.

The second formulation assumes that quality-based experience affects quality control costs. In this case, the optimal quality level is always increasing over time. The optimal quantity behavior is qualitatively similar to the first formulation.

A key feature of the second quality-based model is that it resolves the controversy between the economic conformance level model of Juran, which asserts that one should use cost-tradeoff analysis to find the optimal quality level, and the claims of Deming and Crosby, that zero defects is always the optimal quality level. For certain parameter values, the optimal quality policy in the second model conforms to the economic conformance level model but the dynamics of the model demonstrates the optimality of always pushing towards zero defects.
Chief Executive Personality and Corporate Strategy and Structure in Small Firms
Authors: Miller Danny , Toulouse Jean-Marie
Published: November 2008

An empirical investigation of 97 firms was conducted to determine the relationships that three aspects of the chief executive's (CEO's) personality have with the strategies, structures, decision making methods and performance of their firms. CEO flexibility was associated with niche strategies, simple, informal structures, and intuitive, risk-embracing decision making. CEO need for achievement was related to broadly focussed, marketing-oriented strategies, formal and sophisticated structures, and proactive, analytical decision making. Executives with an internal locus of control pursued more product innovation, were more future oriented, and tailored their approaches to the circumstances facing their firms. The relationships between personality and organizational characteristics were found to be by far the strongest in small firms and also somewhat more significant in dynamic environments. Flexibility and locus of control related to corporate performance under certain conditions; need for achievement did not.
The Adoption of Radical and Incremental Innovations: An Empirical Analysis
Authors: Dewar Robert D. , Dutton Jane E.
Published: November 2008

This paper proposes and empirically tests whether different models are needed to predict the adoption of technical process innovations that contain a high degree of new knowledge (radical innovations) and a low degree of new knowledge (incremental innovations). Results from a sample of 40 footwear manufacturers suggest that extensive knowledge depth (measured by the number of technical specialists) is important for the adoption of both innovation types. Larger firms are likely to have both more technical specialists and to adopt radical innovations. The study did not find associations between the adoption of either innovation type and decentralized decision making, managerial attitudes toward change, and exposure to external information. By implication, managers trying to encourage technical process innovation adoption need not be as concerned about modifying centralization of decision making, managerial attitudes and exposure to external information as would managers trying to encourage other types of innovation adoption, e.g., innovations in social services where these factors have been found to be important. Instead, investment in human capital in the form of technical specialists appears to be a major facilitator of technical process innovation adoption.
Concepts and Applications of Backup Coverage
Authors: Hogan Kathleen , ReVelle Charles
Published: November 2008

Backup coverage, the second coverage of a demand node, is suggested as a decision criterion in modelling the location of emergency services on a network. The efficient handling of stochastic demand by vehicles which can respond to only one call at a time may require backup coverage in areas of high demand as a means to maintain a more uniform level of service. This new criterion is applied in the context of the classic covering models, the Location Set Covering Problem and the Maximal Covering Location Problem. First coverage as defined in these models is traded off against backup coverage in the present work. Other efforts which incorporate additional levels of coverage are reviewed. We also show how to extend these models to third as well as subsequent coverage. Based on an example problem we show that significant levels of backup coverage may possibly be provided within a system without substantial loss of first coverage.
Expected Utility, Penalty Functions, and Duality in Stochastic Nonlinear Programming
Authors: Ben-Tal Aharon , Teboulle Marc
Published: November 2008

We consider nonlinear programming problem (P) with stochastic constraints. The Lagrangean corresponding to such problems has a stochastic part, which in this work is replaced by its certainty equivalent (in the sense of expected utility theory). It is shown that the deterministic surrogate problem (CE-P) thus obtained, contains a penalty function which penalizes violation of the constraints in the mean. The approach is related to several known methods in stochastic programming such as: chance constraints, stochastic goal programming, reliability programming and mean-variance analysis. The dual problem of (CE-P) is studied (for problems with stochastic righthand sides in the constraints) and a comprehensive duality theory is developed by introducing a new certainty equivalent (NCE) concept. Motivation for the NCE and its potential role in Decision Theory are discussed, as well as mean-variance approximations.
Sequencing Capacity Expansion Projects in Continuous Time
Authors: Neebe A. W. , Rao M. R.
Published: November 2008

We consider a problem of sequencing capacity expansion projects with a continuous demand function specified over a given time horizon. Each type of expansion project has a specified integer capacity and an associated cost which is nonincreasing with respect to the time at which the project is brought on stream. The problem is to determine the sequence of expansions to provide sufficient capacity to meet demand at minimum cost. A formulation is presented and its relaxation leads to a shortest route problem. The sequencing problem is solved using a branch and bound procedure with Lagrangean relaxation providing bounds. A particularly effective heuristic is also developed. Computational results are given.
Decision Rules and Transactions, Organizations and Markets
Authors: Baligh Helmy H.
Published: November 2008

Organizations and markets are defined as sets of people who are connected together by the logical orders of decision rule and transaction respectively. Super organizations are defined as sets of organizations connected by decision rules. The logical order is the basis of an arrangement of people or organizations. These concepts are developed in an unambiguous manner, and used to produce analytically useful definitions of pure and hybrid classes. The concepts are shown to be of value in the analysis of organizations and markets. The concept of the decision rule is used to define static organization structures, and to define dynamic task processes in them. Generalizations about organizations and markets are developed and put together to get new ones. Two classification schemes in the literature are simplified by a redefinition of their classes in terms of decision rules only. This not only integrates two seemingly different schemes, but it illustrates how useful the concept of the decision rule could be in analyzing and generalizing about organizations, other arrangements of persons, and arrangements of arrangements of persons.
Reducing Social Context Cues: Electronic Mail in Organizational Communication
Authors: Sproull Lee , Kiesler Sara
Published: November 2008

This paper examines electronic mail in organizational communication. Based on ideas about how social context cues within a communication setting affect information exchange, it argues that electronic mail does not simply speed up the exchange of information but leads to the exchange of new information as well. In a field study in a Fortune 500 company, we used questionnaire data and actual messages to examine electronic mail communication at all levels of the organization. Based on hypotheses from research on social communication, we explored effects of electronic communication related to self-absorption, status equalization, and uninhibited behavior. Consistent with experimental studies, we found that decreasing social context cues has substantial deregulating effects on communication. And we found that much of the information conveyed through electronic mail was information that would not have been conveyed through another medium.
Note—On “A Quantity Discount Pricing Model to Increase Vendor Profits”
Authors: Banerjee Avijit
Published: November 2008

Monahan (Monahan, James P. 1984. A quantity discount pricing model to increase vendor profits. Management Sci. 30 (June) 720–726.) develops a model for establishing an optimal quantity discount schedule from a vendor's viewpoint. In this note we show that this model is limited to the case where the vendor buys from another supplier. Incorporating vendor's inventory carrying costs, we develop a generalized version of Monahan's model and demonstrate its equivalence with the joint economic lot size approach suggested by Banerjee (Banerjee, Avijit. 1986. A joint economic lot size model for purchaser and vendor. Decision Sci. 17 (Summer) 292–311.).
Bidding for Contracts
Authors: Samuelson William
Published: November 2008

In a competitive procurement, a buyer seeks to institute a bidding and contracting procedure which selects the most efficient firm to undertake the contract while offering terms that promote risk sharing between buyer and contractor. This paper develops a model to analyze formally the trade-off between the objectives of risk sharing and efficient contractor selection.
A Primal Simplex Approach to Pure Processing Networks
Authors: Chen Chou-Hong J. , Engquist Michael
Published: November 2008

Pure processing network problems are minimum cost flow problems in which the flow entering or leaving a node may be constrained to do so in given proportions. In this paper, new theoretical results concerning pure processing networks are developed, and, based on these results, two new primal simplex variants are presented. One of these variants has been implemented and tested against a general purpose linear programming code. A large class of problems is identified for which the specialized code is an order of magnitude faster than the general purpose code.
Multi-Object Auctions: Sequential vs. Simultaneous Sales
Authors: Hausch Donald B.
Published: November 2008

Would a seller prefer to sell multiple objects through sequential or simultaneous auctions? Sequential auctions with bids announced between sales seem preferable because the bids may convey information about the value of objects to be sold later. The auction literature shows that this information effect increases the seller’s expected revenue. However, there is also a deception effect which develops in the sequential sales. If a bidder knows that his current bid will reveal information about later objects then he has an incentive to underbid. These two opposing effects are studied in a two-signal model. The results show that either effect may dominate the other, leading the seller to sometimes prefer simultaneous sales and to sometimes prefer sequential sales. The winner's curse can explain this ordering.
The Use of Categorical Variables in Data Envelopment Analysis
Authors: Banker Rajiv D. , Morey Richard C.
Published: November 2008

Data Envelopment Analysis has now been extensively applied in a range of empirical settings to identify relative inefficiencies, and provide targets for improvements. It accomplishes this by developing peer groups for each unit being operated. The use of categorical variables is an important extension which can improve the peer group construction process and incorporate “on-off” characteristics, e.g., presence of drive-in window or not in a banking network. It relaxes the stringent need for factors to display piecewise constant marginal productivities. In so doing, it substantially strengthens the credibility of the insights obtained. The paper treats the cases when the categorical variable can be controllable or uncontrollable by the manager, for the cases of technical and scale inefficiency. The approach is illustrated using real data.
Note—A Note on Pert Times
Authors: Sasieni M. W.
Published: November 2008

A note on a formula for PERT estimate of the mean task time.
The Intellectual Development of Management Information Systems, 1972–1982: A Co-Citation Analysis
Authors: Culnan Mary J.
Published: November 2008

Researchers in all academic disciplines benefit from an understanding of the intellectual development of their field. This understanding is essential for conducting studies which build systematically on prior research. The purpose of this study is to document the intellectual development of the ideas represented by published research in Management Information Systems (MIS) based on an author co-citation analysis. The resulting mapping is intended to serve as a benchmark for future assessments of MIS as a field as well as a means for documenting the emergence of new research specialties. The study sought to identify (1) the subfields which constitute MIS research, (2) the reference disciplines of these subfields, (3) the diffusion of the ideas represented by these subfields to other disciplines, and (4) which of these subfields represent active areas of current MIS research. Nine invisible colleges, or informal clusters of research were uncovered. These nine empirically defined conceptual groupings collectively define the intellectual foundations of MIS as well as the forces currently shaping MIS research. Four of the clusters represent early MIS research themes which are still popular, based on subsequent citation patterns. Despite the centrality of the concept of the organization to widely-accepted definitions of MIS, the results suggest that MIS research is not well-grounded in organization theory nor have MIS research results been widely diffused in the organizational literature. Suggestions for developing a better link between MIS and organizational theory are presented based on the concept of organizational effectiveness.
Patents and Innovation: An Empirical Study
Authors: Mansfield Edwin
Published: November 2008

To what extent would the rate of development and introduction of inventions decline in the absence of patent protection? To what extent do firms make use of the patent system, and what differences exist among firms and industries and over time in the propensity to patent? These questions are in need of much more study. This paper, which reports the results of an empirical investigation based on data obtained from a random sample of 100 U.S. manufacturing firms, provides new findings bearing on each of these questions.
A Homogeneous Industry Model of Resource Allocation to Basic Research and Its Policy Implications
Authors: Joglekar Prafulla , Hamburg Morris
Published: November 2008

In a recent paper we showed that unaided industry allocation to basic (inappropriable) research is suboptimal and that in stimulating this allocation, provision of government seed money is generally counterproductive, while the provision of matching subsidies is not cost-efficient. Here we consider a special case of the model developed in the earlier paper (i.e., we now consider a homogeneous industry) and investigate the effects of several relevant factors upon an industry’s allocation of resources to basic research. An extensive numerical example is presented that helps to verify and to interpret the model in realistic terms. Our findings question the validity of a number of popular beliefs about the need for government support of basic research in various types of industries. For example, contrary to popular belief, the greater the risk aversion displayed by member firms in an industry, the lesser may be the need for government support of its basic research. Also, the larger the number of firms in an industry the greater may be the need for government support of that industry's basic research.
Note—Notions of Efficiency and Their Reference Sets
Authors: Färe Rolf , Hunsaker Worthen
Published: November 2008

In this paper we compare various efficiency measures by investigating the sets that are termed efficient.
Note—Naive Diversification and Portfolio Risk—A Note
Authors: Bird Ron , Tippett Mark
Published: November 2008

A number of authors have used the portfolio standard deviation to model the risk reduction advantages of naive diversification. Other authors have pointed out that when risk is modelled by the portfolio's variance the modelling process becomes much simpler and is computationally more efficient. In this note we derive an exact parametric relationship between portfolio standard deviation and size and thus highlight the dangers of using the standard deviation in conjunction with O.L.S. regression techniques to model the risk reduction advantages of naive diversification. It is then shown that past empirical studies which have used this methodology are deficient.
Optimal Timing of Account Audits in Internal Control
Authors: Morey Richard C. , Dittman David A.
Published: November 2008

This paper calculates the minimum required frequency between audits of a given type to meet prespecified accuracy goals for a given type of account. Both “100 percent,” as well as sampling type audits are addressed. The effectiveness of a given audit type includes the mean and standard deviation of any residual error that may remain in the account after the audit has been performed and after account balances have been adjusted. The accuracy goals consist of the maximum accumulated error that is considered by management to be tolerable between audits, and the prescribed likelihood that this tolerance level will not be exceeded. The model assumes that certain parameters of the error process have been estimated, but no distributional information is required. Closed form, easy to use, lot-size type formulae are derived which calculate the required frequency (or upper bounds) between audits. The model also provides insights as to the relative cost-effectiveness of various types of audits.
Comments on Some Axioms for Combining Expert Judgments
Authors: Schervish Mark J.
Published: November 2008

Morris (Morris, P. A. 1983. An axiomatic approach to expert resolution. Management Sci. 29 24–32.) develops an axiom system for combining expert judgments by means of a processing rule. It is shown that the axioms are self-contradictory.