bluuebunny/crossref_metadata_2025 huggingface dataset:
An O(T2) Algorithm for the NI/G/NI/ND Capacitated Lot Size Problem
Authors: Chung Chia-Shin , Lin Chien-Hua Mike
Published: November 2008

In this paper, we study a class of the capacitated dynamic lot size problem, where, over time, the setup costs are nonincreasing, the unit holding costs have arbitrary pattern, the unit production costs are nonincreasing and the capacities are nondecreasing. We investigate the properties of the optimal solution for the problem and develop the concept of candidate subplan. It is proven that only the candidate subplans need to be examined in searching for an optimal solution. A dynamic programming algorithm, incorporating the concept of candidate subplan, is then devised which has run time complexity of O(T2).
Mean Lower Partial Moment Valuation and Lognormally Distributed Returns
Authors: Lee Wayne Y. , Rao Ramesh K. S.
Published: November 2008

In this paper we develop a capital asset pricing model in a mean lower partial moment framework. Specifically, we show that when partial moments are computed about the expected risky portfolio return, optimal portfolio choice in a mean lower partial framework permits a two-fund portfolio separation between a riskless asset and a “market” portfolio of risky assets. In this new framework, risk is measured as semideviation (for second degree stochastic dominance), and semivariance (for third degree stochastic dominance). Further, when security returns are lognormally distributed and “small risk,” this new mean lower partial moment valuation specializes to the mean-logarithmic variance capital asset pricing model.
Dominance Conditions for Multivariate Utility Functions
Authors: Scarsini Marco
Published: November 2008

Stochastic dominance conditions are given for n-variate utility functions, when k-variate risk aversion is assumed for k = 1, 2, …, n. These conditions are expressed through a comparison of distribution functions, as in the well-known univariate case, and through a comparison of random variables defined on the same probability space.
A Study of User Interface Aids for Model-Oriented Decision Support Systems
Authors: Santos Brian L. Dos , Bariff Martin L.
Published: November 2008

The growing importance of DSS for both strategy evaluation and end user computing increases the need to provide research-based guidance for the design of user interface aids. This research study addresses the common belief that greater flexibility and choice in software aids will promote improved user performance. For model-based decision support systems, the effects of user vs. system-guided model manipulation, variable vs. exception-based report content, and display of incremental changes vs. actual outcomes on strategy formulation were investigated in a laboratory experiment with 46 undergraduate business students. The findings suggest that a system-guided or a more structured model manipulation strategy and the display of incremental changes significantly improve performance. Thus, for this task context, evidence is presented which runs counter to popular beliefs.
State-Level Efforts to Transfer Manufacturing Technology: A Survey of Programs and Practices
Authors: Wyckoff Andrew W. , Tornatzky Louis G.
Published: November 2008

This study analyzed state-level university-based efforts to increase manufacturing productivity through the transfer of technologies, such as robotics and microcomputers, to manufacturing establishments. A survey was conducted by phone interview of 15 state programs that were operating in 1985. Information was gathered on the goals, planning, budgets, marketing, staffing, organizational structure, technical focus, and evaluation practices of the programs.

All of the programs were university-based, typically attached to the engineering schools of land grant public universities. Programs generally fell into three types: (1) active programs, which included activities that ranged from technology needs assessment to consultation assistance; (2) broker programs, which provided limited direct assistance, but put industrial clients in touch with people who could; and (3) passive programs, which focused on providing information services, such as data base searches.

Major issues of development and operation of the programs included: conflicts with the academic context, difficulties in keeping technically up to date and problems in retaining quality staff. A significant strategic and program design issue was how to balance intensive and specialized services with the need to respond to the heterogeneous needs of a broad clientele. Few of the programs had adequate planning and evaluation, perhaps contributing to their difficulties.
Information Technology and Organizational Change: Causal Structure in Theory and Research
Authors: Markus M. Lynne , Robey Daniel
Published: November 2008

This article concerns theories about why and how information technology affects organizational life. Good theory guides research, which, when applied, increases the likelihood that information technology will be employed with desirable consequences for users, organizations, and other interested parties.

But what is a good theory? Theories are often evaluated in terms of their content—the specific concepts used and the human values served. This article examines theories in terms of their structures—theorists' assumptions about the nature and direction of causal influence. Three dimensions of causal structure are considered—causal agency, logical structure, and level of analysis. Causal agency refers to beliefs about the nature of causality: whether external forces cause change, whether people act purposefully to accomplish intended objectives, or whether changes emerge unpredictably from the interaction of people and events. Logical structure refers to the temporal aspect of theory—static versus dynamic—and to the logical relationships between the “causes” and the outcomes. Level of analysis refers to the entities about which the theory poses concepts and relationships—individuals, groups, organizations, and society.

While there are many possible structures for good theory about the role of information technology in organizational change, only a few of these structures can be seen in current theorizing. Increased awareness of the options, open discussion of their advantages and disadvantages, and explicit characterization of future theoretical statements in terms of the dimensions and categories discussed here should, we believe, promote the development of better theory.
Note—Optimal Pricing Policy for the Service Facility Offering a Set of Priority Prices
Authors: Alperstein Hanna
Published: November 2008

A profit making service facility that offers a set of different prices for the single service it provides is considered. By paying a higher price, the customer buys into a priority class that shortens his stay in the service system. We determine the optimal number of priority classes and the set of prices that affords the service facility a higher revenue than any other set. Relying on Adiri and Yechiali (Adiri, I., U. Yechiali. 1974. Optimal priority-purchasing and pricing decisions in non monopoly and monopoly queues. Oper. Res. 22 1051–1066.) who demonstrated that the customers' optimal priority-purchasing strategy is of the control limit type, we prove that for every set of M(>1) priority prices that are optimal to the service facility, the control limits of all priority classes equal one except the control limit of the highest priority class that is determined by the parameters of the system. We show that the highest priority class also has a control limit of one when the service facility uses the optimal M and optimal priority prices. Thus full optimality results in implementation of the pure LIFO (Last-In-First-Out) service discipline.
Competitive Maps: The Structure Underlying Asymmetric Cross Elasticities
Authors: Cooper Lee G.
Published: November 2008

A special case of three-mode factor analysis is used to portray the systematic structure underlying asymmetric cross elasticities for a broad class of market-share attraction models. Analysis of the variation over retail outlets and weeks reveals competitive patterns corresponding to sales for the major brands in the market as well as patterns reflecting shelf-price competition. Analysis of the brand domain results in a joint space. One set of brand positions portrays how brands exert influence over the competition. The other set of points portrays how brands are influenced by others. The interset distances (angles) provide direct measures of competitive pressures. Maps are formed as spatial representations of each of the competitive patterns discovered.
Game-Theoretic Optimal Portfolios
Authors: Bell Robert , Cover Thomas M.
Published: November 2008

We show, for a wide variety of payoff functions, that the expected log optimal portfolio is also game theoretically optimal in a single play or in multiple plays of the stock market. Thus there is no essential conflict between good short-term and long-run performance. Both are achieved by maximizing the conditional expected log return.
A Comparison of Two Elicitation Methods for a Prior Distribution for a Binomial Parameter
Authors: Gavasakar Umesh
Published: November 2008

This paper compares two methods of elicitation for the hyperparameters of the conjugate beta distribution for a binomial sampling model. The PM (posterior mode) method of Chaloner and Duncan appears to be more sensitive to elicitation errors than does a new method proposed here. This new method uses the device of imaginary results, due to I. J. Good (Good, I. J. 1967. A Bayesian significance test for multinomial distributions. JRSSB 29 399–431 (with discussion).). An explicit model for elicitation errors is used in a simulation.
Defensive Marketing Strategies: An Equilibrium Analysis Based on Decoupled Response Function Models
Authors: Kumar K. Ravi , Sudharshan D.
Published: November 2008

The entry of a new product (attacker) into a competitive market is likely to provoke responses from some or all of the existing products (defenders). This paper investigates the development of optimal defensive strategies based on an understanding of the possible reactions of all the defenders to an optimal attack. Following Lane (Lane, W. J. 1980. Product differentiation in a market with endogenous sequential entry. Bell J. Econom. 11(1, Spring) 237–260.) we assume that N products each enter sequentially with perfect foresight on subsequent entry. Then, based on new technology, an unanticipated attacker enters. The N defenders respond in price but not position according to Lane's model. Once this equilibrium is obtained, advertising and distribution response functions scale sales.

We show that under these decoupled response function models of advertising and distribution, uniformly-distributed tastes, and nonincreasing market size, the optimal defense for all existing brands is to decrease their respective prices, advertising, and distribution. Those qualitative results are consistent with recommendations by Hauser and Shugan (Hauser, J. R., S. M. Shugan. 1983. Defensive marketing strategies. Marketing Sci. 2(4, Fall) 319–360.) who used related, but different, consumer response models and a different equilibrium assumption.
Strategic Decision Processes in High Velocity Environments: Four Cases in the Microcomputer Industry
Authors: Bourgeois L. J. , Eisenhardt Kathleen M.
Published: November 2008

How do executives make strategic decisions in industries where the rate of technological and competitive change is so extreme that market information is often unavailable or obsolete, where strategic windows are opening and shutting quickly, and where the cost of error is involuntary exit? How do top management teams divide the decision making responsibility? And how is risk of strategic error mitigated? What we report here is a set of hypotheses induced from a field investigation of four microcomputer firms, where we studied how each of the top management teams went about making major decisions. Our goal was to extend prior work on strategic decision making to what we term high velocity environments. Our results consist of a set of paradoxes which the successful firms resolve and the unsuccessful firms do not. We found an imperative to make major decisions carefully, but to decide quickly; to have a powerful, decisive CEO and a simultaneously powerful top management team; to seek risk and innovation, but to execute a safe, incremental implementation. Despite the apparent paradox, effective firms do all of these simultaneously. These paradoxes are presented in the form of propositions and testable hypotheses.
Note—On Making the Illustration Illustrative: A Comment on Banker, Conrad and Strauss
Authors: Frank Richard G.
Published: November 2008

Hospitals are firms which produce multiple outputs. Taking account of the multiproduct nature of the firm is important for appropriate analyses of hospital technology to be conducted. This paper comments on a recent study which was aimed at comparing two methods of analyzing hospital costs which incorporate multiple outputs and inputs. The comment focuses on how outputs are defined and problems related to aggregation of outputs. Limitations on the ability to interpret results reported by Banker, Conrad and Strauss are identified.
Optimal Strategic Pricing of Reproducible Consumer Products
Authors: Nascimento Fernando , Vanhonacker Wilfried R.
Published: November 2008

This paper investigates the strategic pricing of consumer durable products which can be acquired through either purchase or reproduction (e.g., computer software). As copy piracy results in an opportunity loss, its adverse effect on profits needs to be incorporated in strategic decisions such as pricing. Using a dual diffusion model which parsimoniously describes sales and copying, and employing control theory methodology, optimal price trajectories are derived for the period of monopoly. The results indicate that (a) in absence of any protection, skimming pricing strategies are generally optimal, and (b) copy protection is warranted only when sales diffuse much faster than copying and the protection technology does not significantly raise the marginal production cost.
A Nonlinear Optimization Model of Water Allocation for Hydroelectric Energy Production and Irrigation
Authors: Rabinowitz Gad , Mehrez Abraham , Oron Gideon
Published: November 2008

An optimal decision and control model was developed and used for dual purpose allocation of water from a reservoir. The model was constructed for the Hazbani-Dan Water System in the Upper Galilee (Israel). In this system about half of the Dan River water enters and is stored in a reservoir and is then released via a 70″ pipe either to a hydroelectric power station or to agricultural fields for irrigation. The electricity generated is sold to the national electricity utility according to a three-tiered pricing system which is a function of the time in the day and the season.

The decision and control model maximizes the expected return on energy production subject to storage capacity and flow limitations. According to the policy of the system management, water demand for irrigation has to be satisfied and so it is taken as a constraint in the model.

The following paper develops the model, exploring the feasibility conditions of the model and the uniqueness of the solution. An example containing a sensitivity analysis is given.
Strategies for the Probabilistic Lot-Sizing Problem with Service-Level Constraints
Authors: Bookbinder James H. , Tan Jin-Yan
Published: November 2008

We formulate a stochastic-demand version of the single-stage lot-sizing problem with time-varying demand, incorporating a service-level constraint on the probability of a stockout. Three strategies are studied. The “static uncertainty” strategy, in which lot-sizing decisions for every period must be made at the beginning of period 1, is shown to yield an equivalent deterministic problem with time-varying demands for which optimal or good heuristic solutions exist. The procedure by which this equivalent problem is obtained is computationally simple.

The “dynamic uncertainty” strategy allows subsequent lot sizes to be chosen on the basis of demands that have become known at a later point in time. The “static-dynamic” uncertainty approach combines features of the above two strategies and yields an equivalent linear program for any given order schedule. Relationships are suggested between these strategies and various aspects of rolling horizon production planning.

Arguments are given that in such an environment, the static uncertainty strategy is the most straightforward to modify and “roll along” as new demands become known. Good results are found when this procedure is applied to some 300-period stochastic-demand problems using rolling horizons of between 2 and 12 periods in length.
Prospect Versus Utility
Authors: Currim Imran S. , Sarin Rakesh K.
Published: November 2008

We show how to calibrate a prospect model of decision making under risk for an individual. The prospect model is empirically compared to a utility model on two criteria, verification of the postulates of each model, and predictive accuracy. The empirical comparison is performed via three experiments. In Experiment 1, predictive accuracy of the models is compared in nonparadoxical situations, those which favor neither model. In contrast the predictions in Experiment 2 are for paradoxical choices, those which favor the prospect model. In Experiment 1, the prospect model is compared to a model comprising a utility function which permits separate risk attitudes for gain and losses, and hence is more flexible than a utility model as traditionally assessed. In contrast the utility model in Experiment 3 is assessed as is traditionally done assuming constant risk attitude across gains and losses. Several calibration procedures are contrasted across experiments.

Our results show a high degree of consistency with the postulates of both models. On predictive accuracy the prospect model outperforms the utility model for paradoxical choices. However, for nonparadoxical situations there is little difference in the predictive ability of both models.
Critical Number Policies for Inventory Models with Periodic Data
Authors: Zipkin Paul
Published: November 2008

We consider an infinite-horizon in problem with stochastic demands where the data vary periodically. Karlin (Karlin, S. 1960a. Dynamic inventory policy with varying stochastic demands. Management Sci. 6 231–258; Karlin, S. 1960b. Optimal policy for dynamic inventory process with stochastic demands subject to seasonal variations. J. SIAM 8 611–629.) shows that a periodic critical-number policy is optimal and presents an algorithm for computing the critical numbers, assuming discounted costs. Here we develop an alternative, conceptually simpler approach to these problems. The results include a proof of the optimality of such policies for the average-cost case, and a qualitative description of the behavior of the optimal policy as “smoothing” fluctuations in the data.
Technological Accumulation, Diversification and Organisation in UK Companies, 1945–1983
Authors: Pavitt K. , Robson M. , Townsend J.
Published: November 2008

A survey of more than 4,000 significant innovations and innovating firms in the UK from 1945–1983 shows that the scope and organisation of technological activities vary greatly as functions of firms' principal activities and size.

1. Technological opportunities and threats are greatest in firms in chemicals and engineering. Opportunities in such science-based and specialist supplier firms in general emerge horizontally (in related product markets) and downstream (in user sectors). In scale-intensive (e.g. steel, vehicles) and supplier-dominated (e.g. printing, construction) firms, opportunities tend to be upstream in related production technologies. Breakthrough innovations in science-based firms also induce clusters of technological opportunities upstream for suppliers, horizontally for partners, and downstream for users. Their effective exploitation requires diversity of firms' technological activities greater than that strictly required for current output.

2. The nature of technological opportunities, and of organisation for their exploitation, also varies with firm size. Firms with fewer than 1,000 employees have major opportunities with specialised strategies in mechanical engineering and instruments. The prevalence of broad front technological strategies, and of divisionalisation, increases sharply with firm size, together with dependence on formal R and D activities. The size of innovating divisions has diminished sharply over the period. Divisionalisation improves the “goodness of fit” between the core business of innovating divisions and the innovations themselves, but 40% have remained consistently outside the core business of divisions.

3. These findings help identify the key tasks of technological strategy in firms in different industries, and of different sizes. Thus, in large firms, divisionalisation can create the small size of unit conducive to effective implementation, but it cannot absolve central management from the continuous task of matching technological opportunities with organisational forms and boundaries.
A Discrepancy Model of End-User Computing Involvement
Authors: Doll William J. , Torkzadeh Gholamreza
Published: November 2008

Within the context of traditional data processing, the MIS literature has devoted considerable attention to the relationship between user involvement and MIS success: unfortunately, this research has produced conflicting results. After reviewing these results, Ives and Olson provide a framework for research on user involvement. Although their framework uses cognitive and motivational psychological mechanisms to explain the linkage between user involvement and MIS success, the contingency variables they identify do not pertain to individual differences between users. Thus, the framework has limitations that reduce its usefulness for explaining conflicting research findings, and its applicability to the end-user computing environment.

End-user computing is an emerging phenomenon characterized by substantial differences between individuals in skill and motivation. The unique aspects of this dynamic end-user environment are identified here and an end-user involvement construct is described. Next, after reviewing the participative decision making literature, a model of end-user involvement based upon Alutto and Belasco's discrepancy concept of participation is presented.

Focusing on individual differences, this model hypothesizes a contingency relationship between perceived involvement, desired involvement, and end-user satisfaction. Three intervening psychological mechanisms described by Locke and Schweiger (value attainment as well as cognitive and motivational) are used to provide a theoretical rationale for the linkage between involvement and end-user satisfaction. The model is empirically examined using a sample of 618 respondents from 44 firms. The results tend to support the contingency hypotheses. The usefulness of this model for reconciling conflicting research findings in the user involvement literature is discussed, and suggestions for further research are described.
A Branch-and-Cut Approach to a Traveling Salesman Problem with Side Constraints
Authors: Padberg M. , Rinaldi G.
Published: November 2008

A problem posed by O. L. Deutsch (Deutsch, O. L. 1988. Artificial intelligence design challenge—Background, analysis, and relative performance of algorithms. J. Guidance, Control, and Dynamics 11 386–393.) as the Artificial Intelligence Design Challenge for the 1987 American Institute of Aeronautics and Astronautics (AIAA) Conference on Guidance, Navigation & Control (Monterey, CA, August 17–19, 1987) is formulated as a zero-one linear program. We show that the associated (relaxed) linear programming problem can be solved in polynomial time despite an exponential size of the proposed constraint system in terms of the underlying parameter n of the number of cities considered, when a nonlinear constraint of the problem is either ignored or approximated by linearization. We describe a software system AIAA/SOLVER that we have implemented to solve the problem to optimality under an apparently weak assumption about its stochastic cost structure using branch-and-cut.
Flight Scheduling and Maintenance Base Planning
Authors: Feo Thomas A. , Bard Jonathan F.
Published: November 2008

In an effort to control costs, airlines have begun to concentrate on their maintenance operations as a potential source for savings. Nevertheless, federal regulations and internal safety policies effectively limit cost savings to improvements in productivity and scheduling. The purpose of this paper is to present a model that can be used by planners to both locate maintenance stations and to develop flight schedules that better meet the cyclical demand for maintenance. The problem is formulated as a min-cost, multicommodity flow network with integral constraints, and solved using a two-phase heuristic.

The procedure is demonstrated with data supplied by American Airlines for their Boeing 727 fleet. The results show a significant improvement over current techniques, and indicate that substantial cost reductions can be achieved by eliminating up to 5 of the 22 maintenance bases now in operation. Similar results were obtained for American's Super 80 and DC-10 fleets. Perturbation analysis confirms the robustness of these findings, and suggests that loss in flexibility due to interruptions in the flight schedule will be negligible.
Rounding Off to Powers of Two in Continuous Relaxations of Capacitated Lot Sizing Problems
Authors: Roundy Robin
Published: November 2008

In the capacitated version of the Divide and Conquer algorithm for lot sizing in multi-stage production/inventory problems, feasibility is often lost when the reorder intervals are rounded off to powers of two. We propose a new algorithm for rounding off the reorder intervals which always produces a feasible policy. We have shown that the relative increase in cost that occurs when the intervals are rounded off using this algorithm cannot exceed 44%, and that for systems with a single capacity machine (including the ELSP), the cost increase cannot exceed 6%. Computational experience with industrial data sets indicates that the algorithm performs very well.
Expected Waiting Time for Nonsymmetric Cyclic Queueing Systems—Exact Results and Applications
Authors: Sarkar D. , Zangwill W. I.
Published: November 2008

This paper provides the expected waiting time of a nonsymmetric cyclic server queueing system with Poisson traffic, arbitrary switchover and arbitrary service times. For n the number of queues, the expected waiting time is obtained using n equations which is a significant improvement over the previous best result which requires solution of n2 equations. Computer, manufacturing and other applications are discussed.
An Empirical Test of a Stage of Growth Progression Model
Authors: Kazanjian Robert K. , Drazin Robert
Published: November 2008

This paper presents a stage of growth model for technology based new ventures (TBNVs). TBNVs are postulated to evolve through four discrete stages of growth—Conception and Development, Commercialization, Growth, and Stability. Based on a longitudinal sample of 71 ventures in the computer and electronics industries, the hypothesis that TBNVs progress according to this model is tested using the del procedure for prediction analysis of cross-classification tables. The hypotheses are supported, although not all firms progressed as expected. These results suggest that some variation in interstage transition patterns are due to a progression imperative.
Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply
Authors: Dierickx Ingemar , Cool Karel
Published: November 2008

Authors' reply to comments regarding their paper (Dierickx, I., K. Cool. 1989. Asset stock accumulation and the sustainability of competitive advantage. Management Sci.).
Note—A Prediction Model for Manufacturer Warranty Reserves
Authors: Thomas Marlin U.
Published: November 2008

A model for predicting warranty reserves for manufactured units having exponential failures is extended for more general failure distributions. The model allows for discounting. Sample calculations are provided.
Testing the Validity of a Queueing Model of Police Patrol
Authors: Green Linda , Kolesar Peter
Published: November 2008

This paper describes efforts to validate a multiple car dispatch queueing (MCD) model of police patrol operations using New York City data. The MCD model was designed for use in a computer system that has been disseminated to many police departments in the U.S. to help planners allocate patrol cars among precincts. It has also been used to evaluate specific changes in patrol policy in New York. We define validation as a series of hierarchical procedures ranging from tests of mathematical correctness to evaluations of model robustness. We discuss the difficulties and limitations of assessing the validity of a model of a loosely managed system in which human behavior is central and in which controlled experiments cannot be performed. Focusing on specific uses, we conclude that the MCD model is a good although imperfect description of patrol operations in New York and is a potentially useful planning tool for many other urban police departments.
Planning for Surprise: Water Resources Development Under Demand and Supply Uncertainty I. The General Model
Authors: Erlenkotter Donald , Sethi Suresh , Okada Norio
Published: November 2008

A study of water resources development in South Sweden revealed that water consumption unexpectedly stopped growing after construction had begun on a large project to expand water supplies. The project had a long lead time for completion, and planning had been based on traditional deterministic forecasts of future water use.

To explore the implications of such an uncertain structural shift in future consumption patterns, we develop a model for determining the timing for initiating such a project. In this model, the original consumption forecast may be disrupted at some random future time by an event called a “surprise.” As in the Swedish situation, we have modeled the surprise as an unexpected stagnation in future demand growth and benefit levels. We show that this form of uncertainty makes desirable delaying the initiation of the project beyond the time optimal under the original forecast. We then extend the model to include the lead time for the project as a variable, and demonstrate that the lead time should be reduced from that optimal under a deterministic future. Finally, we incorporate the option of abandoning the project when the surprise occurs, and show that higher salvage values for the project lead to earlier optimal commitment times.
Level Schedules for Mixed-Model Assembly Lines in Just-In-Time Production Systems
Authors: Miltenburg John
Published: November 2008

Mixed-model assembly lines are used to produce many different products without carrying large inventories. The effective utilization of these lines requires that a schedule for assembling the different products be determined. For Just-In-Time (JIT) production systems, which require producing only the necessary products in the necessary quantities at the necessary times, the objective is to keep a constant rate of usage of all parts used by the line. This is called levelling or balancing the schedule. This paper develops a theoretical basis for scheduling these systems, and presents new scheduling algorithms and heuristics.
Industry Concentration and Allocation of Resources to Basic Research
Authors: Joglekar Prafulla , Hamburg Morris
Published: November 2008

While the mainstream of Western economic thought believes in competitive markets, the Schumpeterian school considers concentrated industry to be the ideal vehicle for the advancement of industrial technology. Empirical evidence on the Schumpeterian hypothesis that a concentrated industry allocates relatively more resources to its research and development (R&D) activities has been inconclusive. We believe the reason is that the Schumpeterian hypothesis is too general and vague. The fact is that there are several dimensions of industrial concentration, for example, total number of firms in an industry, interfirm differences on a variety of characteristics such as sales, assets, resources, and so forth. Similarly, R&D activities are of several types such as long-term or short-term research, and basic research or applied research and development. Unfortunately, modeling efforts focusing on resource allocation by specific types of concentrated industries to specific types of R&D activities are almost nonexistent, with the exception of Joglekar and Hamburg (Joglekar, P., M. Hamburg. 1986. A homogeneous industry model of resource allocation to basic research and its policy implications. Management Sci. (February) 225–236; Joglekar, P., M. Hamburg. 1987. Industry resource allocation to basic research under normally distributed benefits. Decision Sci. (Winter) 1–24.) who showed that industries consisting of smaller numbers of firms allocate relatively greater amounts of resources to their basic research than industries consisting of larger numbers of firms.

Extending Joglekar and Hamburg's models here we find that when two industries consist of the same number of firms, in most cases, a heterogeneous industry falls as short of its Pareto optimal investment in basic research as its comparable homogeneous counterpart. Numerical examples suggest that in some cases, concentrated (heterogeneous) industries may do worse. Policy implications of the results as well as directions for further research are discussed.
Note—Operations Sequencing in Discrete Parts Manufacturing
Authors: Bard Jonathan F. , Feo Thomas A.
Published: November 2008

This paper presents an algorithm for efficiently sequencing the cutting operations associated with the manufacture of discrete parts on a CNC machine. The problem is first modeled as an integer program but recast via Lagrangian relaxation as a min-cut problem on a bipartite network. Tight lower bounds are obtained with a max-flow algorithm. The corresponding solution is used as input to a greedy heuristic which generates “good” feasible points. Given nonconvergence, a branch and bound strategy is used to find the optimal solution.
Discount Rates Inferred from Decisions: An Experimental Study
Authors: Benzion Uri , Rapoport Amnon , Yagil Joseph
Published: November 2008

Two hundred and four students of economics and finance participated in an intertemporal choice experiment which manipulated three dimensions in a 4 × 4 × 4 factorial design: scenario (postponing a receipt, postponing a payment, expediting a receipt, expediting a payment), time delay (0.5, 1, 2, and 4 years), and size of cashflow ($40, $200, $1000, and $5000). Individual discount rates were inferred from the responses, and then used to test competitively four hypotheses regarding the behavior of discount rates. The classical hypothesis asserting that the discount rate is uniform across scenarios, time delays, and sums of cashflow was flatly rejected. A market segmentation approach was found lacking. The results support an implicit risk hypothesis according to which delayed consequences are associated with an implicit risk value, and an added compensation hypothesis which asserts that individuals require compensation for a change in their financial position.
Product Assortment in a Triopoly
Authors: Shugan Steven M.
Published: November 2008

Producers of super-premium ice cream, such as Häagen-Dazs, offer a smaller assortment of flavors than the producers of lesser quality ice cream. Examples of this phenomenon can be found in other industries as well. In many industries, the producers of higher-quality products offer a smaller assortment of flavors, colors, sizes, patterns, textures, fragrances, tones, styles, models, designs, types or other options. This paper explores when and why producers of super-premium products should find it profitable to offer a smaller assortment than the producers of nonpremium products. We derive a Nash equilibrium both on prices and product assortments for a triopoly. At the Nash equilibrium, we show that additional product quality, increased consumer price-sensitivity and greater assortment costs discourages product assortment. We also show that a larger market potential, greater competitive costs and sharper competition encourage more assortment by the super-premium producer.
Note—Seasonal Exponential Smoothing with Damped Trends
Authors: Gardner Everette S. , McKenzie Ed.
Published: November 2008

In this paper we apply the strategy of trend-damping to the popular Winters exponential smoothing systems for seasonal time series. Efficient model formulations are derived for both multiplicative and additive seasonal patterns. An algorithm is given to test the stability of the models in cases where predetermined smoothing parameters are used. Empirical results are presented to show that trend-damping improves ex ante forecast accuracy in seasonal data, especially at long leadtimes.
Bias in Utility Assessments: Further Evidence and Explanations
Authors: Johnson Eric J. , Schkade David A.
Published: November 2008

Judgments about simple gambles, such as those used in utility assessment, can generate sizable and systematic bias. After Hershey and Schoemaker (Hershey, J. C., P. J. H. Schoemaker. 1985. Probability vs. certainty equivalence methods in utility measurement: Are they equivalent? Management Sci. 31 1213–1231.), we employ both the probability and certainty equivalence methods to explore bias. Our results show that: (1) the direction and degree of bias depend on characteristics of the assessment gamble such as the reference probability and the difference between outcomes, (2) presenting subjects with explicit anchors can change the size and direction of the bias, and (3) subjects using heuristic response strategies show significantly more bias than those using expectation strategies. We also discuss the status of possible explanations for the bias, in light of these new results, including PE mode reframing, random error, and anchoring and adjustment.
A Dynamic Lot-Size Model with Make-or-Buy Decisions
Authors: Lee Sang-Bum , Zipkin Paul H.
Published: November 2008

This paper considers a dynamic lot-size model with make-or-buy decisions. In each period, the production level may not exceed a given capacity, but the purchase is unrestricted. The costs for production, purchase and inventory are concave. The problem is to find a minimum-cost production and purchase schedule that satisfies known demands over T periods. After characterizing the form of an optimal solution, we present an O(T5) algorithm when the production capacities are stationary. The algorithm is extended to the case where the capacities are integer multiples of a constant. The results are further extended to the cases of backlogging, bounded inventory, and capacitated purchase.
A Dynamic Programming Approach to Stochastic Assembly Line Balancing
Authors: Carraway Robert L.
Published: November 2008

Consider the problem of minimizing the required number of work stations on an assembly line for a given cycle time when the processing times are independent, normally distributed random variables. The assignment of tasks to stations is subject to precedence conditions, caused by technological constraints, and a lower bound on the probability of the work at any station being completed within the cycle time. We present two dynamic programming (DP) algorithms for this problem, each guaranteed to be optimal under a certain mild condition. Our general approach is based on the Held et al. (Held, M., R. M. Karp, R. Shareshian. 1963. Assembly-line-balancing-dynamic programming with precedence constraints. Oper. Res. 11 442–459.) formulation of the deterministic line balancing problem and thus represents a modification of previous work by Kao (Kao, E. P. C. 1976. A preference order dynamic program for stochastic assembly line balancing. Management Sci. 22 1097–1104.). Computational results indicate that both algorithms significantly outperform an alternative DP approach suggested by Henig (Henig, M. I. 1986. Extensions of the dynamic programming method in the deterministic and stochastic assembly-line balancing problems. Comput. Oper. Res. 13 443–449.).
A General Framework for Modeling Production
Authors: Hackman Steven T. , Leachman Robert C.
Published: November 2008

We introduce a general framework that guides the management scientist's formulation of deterministic models of production processes. Using the framework, we reformulate the constraints of familiar linear programming-based planning models to specifically treat components of production lead time, thereby realizing a more accurate representation of the production process. In addition, the reformulation accommodates noninteger values for lead times as well as unequal-length planning periods. Manufacturing Resources Planning (MRP) and the Critical Path Method (CPM) are recast in terms of the framework, revealing opportunities for model generalization and extension, and their relationship to linear programming models.
Open Order Due Date Maintenance in MRP Systems
Authors: Penlesky Richard J. , Berry William L. , Wemmerlöv Urban
Published: November 2008

This paper is concerned with the problem of maintaining open order due dates in job shops that plan and schedule their operations using Material Requirements Planning (MRP) methodology. Two different techniques for dealing with open order due date changes are analyzed using customer service level and total inventory level performance measures. With the first technique, called the fixed due date approach, due dates are never changed from those originally assigned to orders when released to the shop. With the second technique, called the dynamic due date approach, all due dates are updated to reflect actual need dates. Beyond evaluating them in an MRP context, this study extends current understanding of these two techniques by observing them in a variety of different operating environments. The results of the study indicate that: (1) the dynamic due date approach performs as good as, or better than, the fixed due date approach across a wide range of operating conditions; and (2) operating conditions have an important effect on the magnitude of the performance differential between the two approaches.
Innovative and Noninnovative Small Firms: Types and Characteristics
Authors: Khan Arshad M. , Manopichetwattana V.
Published: November 2008

This study addresses the proposition that the characteristics of innovative and noninnovative small firms have significant differences. It is based on a sample of 50 Texas manufacturers. Cluster analysis yielded five distinct groups—two innovative and three noninnovative. The two innovative groups were either young firms dubbed the “Young Turks,” or, established, managerially competent firms headed by newcomers called the “Blue Chips.” Among the three noninnovative groups, the “Silver Spoons” appeared to be surviving on past success; the “Striving Stoics” displayed continuing managerial effort but were led by executives who had been at the helm far longer than average; and the “Kismets” showed lesser competence and effort, were highly centralized, and were headed by executives tending more towards an external locus of control. Correlational analysis indicated a significant positive relationship between scanning and innovation. Challenges to the firm in the form of environmental dynamism and heterogeneity evoked positive innovatory responses but environmental hostility was a weak negative correlate inducing the firm to “pull in its horns.” Finally, an abundance of resources encouraged proactiveness.
An Overview of Representative Problems in Location Research
Authors: Brandeau Margaret L. , Chiu Samuel S.
Published: November 2008

We present a survey of over 50 representative problems in location research. Our goal is not to review all variants of different location models or to describe solution results, but rather to provide a broad overview of major location problems that have been studied, indicating briefly how they are formulated and how they relate to one another. We review standard problems such as median, center, and warehouse location problems, as well as less traditional location problems which have emerged in recent years. Our primary focus is on problems for which operations research-type models have been developed. Most of the problems we review have been formulated as optimization problems.
The Effect of Regret on Optimal Bidding in Auctions
Authors: Engelbrecht-Wiggans Richard
Published: November 2008

While most models of auctions and competitive bidding assume that each bidder's utility for an outcome depends only on his own profit, we allow the utility to also depend on any regret that a bidder suffers after the fact and characterize when and how this affects bidding. Specifically, a winner might regret “money left on the table” in Federal offshore oil lease sales, while a loser might regret seeing an object sell for less than his own value for it. We show that for risk-neutral bidders who, after the fact, know the winner's price for the object, a bidder's optimal bidding strategy will not depend on the relative weight given to profit versus regret if both forms of regret weigh equally heavily. However, if bidders weight money-left-on-the-table regret more heavily, then the bid taker suffers. Likewise, if losers do not learn the winner's price, then the bid taker also suffers. Thus, the existing models' exclusion of regret from risk neutral bidders' utility functions affects the applicability of the resulting theory under certain, now clearly delineated, conditions.
Control Policies for the MX/G/1 Queueing System
Authors: Lee Hyo-Seong , Srinivasan Mandyam M.
Published: November 2008

The MX/G/1 queueing system is studied under the following two situations:

(1) At the end of a busy period, the server is turned off and inspects the length of the queue every time an arrival occurs. When the queue length reaches, or exceeds, a pre-specified value m for the first time, the server is turned on and serves the system until it is empty.

(2) At the end of a busy period, the server takes a sequence of vacations, each for a random amount of time. At the end of each vacation, he inspects the length of the queue. If the queue length is greater than, or equal to, a pre-specified value m at this time, he begins to serve the system until it is empty.

For both cases, the mean waiting time of an arbitrary customer for a given value of m is derived, and the procedure to find the stationary optimal policy under a linear cost structure is presented.
Adverse Risk Incentives and the Design of Performance-Based Contracts
Authors: Grinblatt Mark , Titman Sheridan
Published: November 2008

This paper uses option pricing theory to value and analyze many performance-based fee contracts that are currently in use. A potential problem with some of these contracts is that they may induce portfolio managers to adversely alter the risk of the portfolios they manage. The paper is prescriptive in that it presents conditions for contract parameters that provide proper risk incentives for classes of investment strategies. For buy-and-hold and rebalancing strategies adverse risk incentives are avoided when the penalties for poor performance outweigh the rewards for good performance.
A Reduction Method Applicable to Compound Option Formulas
Authors: Schroder Mark
Published: November 2008

Curnow and Dunnett (Curnow, R. N., C. W. Dunnett. 1962. The numerical evaluation of certain multivariate normal integrals. Ann. Math. Statist. 33 571–579.) derive a reduction formula for multivariate normal integrals with a certain type of correlation matrix. This paper presents a more general reduction formula which can reduce substantially the computational cost of high dimension integrals. This method has a number of applications in option pricing theory in finance.