bluuebunny/crossref_metadata_2025 huggingface dataset:
Effects of Anonymity and Evaluative Tone on Idea Generation in Computer-Mediated Groups
Authors: Connolly Terry , Jessup Leonard M. , Valacich Joseph S.
Published: November 2008

A laboratory experiment was used to evaluate the effects of anonymity and evaluative tone on computer-mediated groups using a group decision support system to perform an idea-generation task. Evaluative tone was manipulated through a confederate group member who entered supportive or critical comments into the automated brainstorming system. Groups working anonymously and with a critical confederate produced the greatest number of original solutions and overall comments, yet average solution quality per item and average solution rarity were not different across conditions. Identified groups working with a supportive confederate were the most satisfied and had the highest levels of perceived effectiveness, but produced the fewest original solutions and overall comments.
Communication and Income Smoothing Through Accounting Method Choice
Authors: Suh Yoon S.
Published: November 2008

This paper shows how accounting income smoothing could arise as rational equilibrium behavior. I develop a two-period agency model in which an agent obtains, after the first period's production operation, private information regarding future productivity of the operation. Direct communication of the agent's private signal yields a strict Pareto improvement over no-communication in this two-period world since it allows the agent to achieve signal-contingent interperiod consumption smoothing. Delegation of accounting method choice to the agent is shown to be an alternative, Pareto-equivalent mechanism to direct communication in this paper. Thus, accounting method choice is one way to achieve interperiod signal-contingent consumption smoothing by smoothing accounting income. One such accounting choice which arises from the structure of the problem is the choice of depreciation method.
Venture Theory: A Model of Decision Weights
Authors: Hogarth Robin M. , Einhorn Hillel J.
Published: November 2008

Several theories suggest that people replace probabilities by decision weights when evaluating risky outcomes. This paper proposes a model, called venture theory, of how people assess decision weights. It is assumed that people first anchor on a stated probability and then adjust this by mentally simulating other possible values. The amount of mental simulation is affected by the absolute size of payoffs, the extent to which the anchor deviates from the extremes of 0 and 1, and the level of perceived ambiguity concerning the relevant probability. The net effect of the adjustment (i.e., up or down vis-à-vis the anchor) reflects the relative weight given in imagination to values above as opposed to below the anchor. This, in turn, is taken to be a function of both individual and situational variables, and in particular, the sign and size of payoffs. Cognitive and motivational factors therefore both play important roles in determining decision weights. Assuming that people evaluate outcomes by a prospect theory value function (Kahneman and Tversky 1979) and are cautious in the face of risk, fourteen predictions are derived concerning attitudes toward risk and ambiguity as functions of different levels of payoffs and probabilities. The results of three experiments are reported. Whereas only a subset of the model's predictions can be tested in Experiment 1, all fourteen are tested in Experiments 2 and 3 using hypothetical and real payoffs, respectively. Several of the model's predictions are not supported in Experiment 2 but almost all are validated in Experiments 1 and 3. The failures relate to the exact nature of probability × payoff interactions in attitudes toward risk and ambiguity for losses. The theory and results are discussed in relation to other experimental evidence, future tests of the theory, alternative models of risky choice, and implications of venture theory for explaining further phenomena.
Steady-State Approximation for a Vector Valued Markov Chain
Authors: Vaughan Timothy S.
Published: November 2008

The problem addressed is that of a condensed steady-state solution for the Markov Chain (X(t), S(t)). The steady state marginal distribution of S(t) is known; we desire only the steady state marginal distribution of X(t). Such a case frequently arises when the supplementary random variable S(t) is required in the state description solely to satisfy the Markovian assumption. An iterative algorithm is presented which makes use of an approximation to the conditional distribution for S(t) given X(t).
Conflicting Interests in the Timing of Jobs
Authors: Ackere Ann Van
Published: November 2008

We study a situation where jobs of unknown duration (e.g., surgical procedures) are performed sequentially in a single facility (e.g., a hospital operating room). This facility can be any resource (material or human) that is in limited supply. Due to the uncertain duration of jobs, the time at which the facility will be available for the next job is unknown. Given the existing schedule, a starting time is selected for the next job. The scheduler's task is complicated because a job necessitates the presence of (at least) one individual (e.g., the surgeon), called the agent.

We model this situation as a game between the scheduler and the agent. The scheduler trades off the cost associated with keeping the facility idle between jobs against the cost of keeping the agent waiting. The agent trades off his waiting cost against his lateness cost. We determine the conditions under which it is necessary for the scheduler to take the agent's behavior into account. We introduce moral hazard by assuming that the agent's arrival time is random and compare this to the case where the agent selects a deterministic arrival time.
Note—The Impact of Inspection Delay on Process and Inspection Lot Sizing
Authors: Porteus Evan L.
Published: November 2008

Models in which process quality and lot sizing interact have recently been developed. Lot sizes should be reduced to compensate for poor quality if no effective inspection is possible. This note introduces an inspection delay time, measured in units produced after an inspection is made until results are known. If the inspection delay is negligible, then the problem reduces essentially to two separate lot sizing problems: the classical EOQ lot sizing problem and an inspection lot sizing problem. If the delay is great, then only one inspection should be made and the lot size is as given by Porteus, and Rosenblatt and Lee. This note seeks the optimal production and inspection lot sizes for the full spectrum of inspection delays. The impact of the results is illustrated numerically. The value of automated defect control (with 100% inspection and immediate production stoppage upon detection of a defect) is discussed.
Implicit Cost Allocation and Bidding for Contracts
Authors: Cohen Susan I. , Loeb Martin
Published: November 2008

The question of how, or even whether, indirect costs should be allocated for pricing decisions has been controversial and unresolved. This paper takes a step toward answering this question by examining the special case of a firm that must incur incremental fixed costs to complete any or all of the several projects for which it is submitting simultaneous bids. An independent private-values bidding model is employed to endogenously determine an optimal cost allocation; we term such a cost allocation “implicit.” The optimal implicit fixed cost allocation is shown to fully allocate fixed costs ex ante, although the fixed costs may be under, over, or exactly allocated ex post.
A Note on “Level Schedules for Mixed-Model Assembly Lines in Just-in-Time Production Systems”
Authors: Kubiak Wieslaw , Sethi Suresh
Published: November 2008

This note formulates an assignment problem for obtaining optimal level schedules for mixed-model assembly lines in JIT production systems. The problem was formulated as a quadratic integer programming problem in a recent paper by Miltenburg (1989) where, however, only enumerative algorithms and heuristics were proposed for its solution. Our assignment formulation can also be extended to more general objective functions than the one used by Miltenburg.
Joint Ventures and the Option to Expand and Acquire
Authors: Kogut Bruce
Published: November 2008

This article develops the perspective that joint ventures are created as real options to expand in response to future technological and market developments. The exercise of the option is accompanied by an acquisition of the venture. It is hypothesized that the timing of the acquisition should be triggered by a product market signal indicating an increase in the venture's valuation. Based on a sample of 92 manufacturing joint ventures, this hypothesis is tested by estimating the effect of product market signals on the hazard of acquisition. The results indicate that unexpected growth in the product market increases the likelihood of acquisition; unexpected shortfalls in product shipments have no effect on the likelihood of dissolution. This asymmetry in the results strongly supports the interpretation of joint ventures as options to expand.
Dynamic Bargaining with Transaction Costs
Authors: Cramton Peter C.
Published: November 2008

A buyer and seller alternate making offers until an offer is accepted or someone terminates negotiations. The seller's valuation is common knowledge, but the buyer's valuation is known only by the buyer. Impatience to reach an agreement comes from two sources: the traders discount future payoffs and there are transaction costs of bargaining. Equilibrium behavior involves either immediate trade, delayed trade, or immediate termination, depending on the size of the gains from trade and the relative bargaining costs. This contrasts with the pure discounting model where termination never occurs, and the pure transaction cost model where delayed trade never occurs.
Multinomial Approximating Models for Options with k State Variables
Authors: Kamrad Bardia , Ritchken Peter
Published: November 2008

Contingent claims whose values depend on multiple sources of uncertainty arise in many financial contracts and in the analysis of real projects. Unfortunately closed form solutions for these options are rare and numerical methods can be computationally expensive. This article extends the literature on multinomial approximating models. Specifically, new multinomial models are presented that include as special cases existing models. The more general models are shown to be computationally more efficient.
The Impact of Special Requirements on the Estimation of Electrical Demand
Authors: Muralidhar Krishnamurty , Tretter Marietta J.
Published: November 2008

Estimating electrical demand in 15—30-minute intervals plays a crucial role in the determination of electric utility rates and the planning functions of utility companies. In order to achieve accurate estimation results, the Public Utilities Regulatory Policies Act of 1978 specifies requirements that are unique to this estimation problem. This study investigates the impact of these requirements on estimation effectiveness. The results indicate that these requirements fail to achieve their purpose. The study also notes the importance of addressing the form of the underlying population of electrical demand.
Nondeterministic Polling Systems
Authors: Srinivasan Mandyam M.
Published: November 2008

A nondeterministic polling system is considered in which a single server serves a number of stations. The service discipline at each station is, consistently, either nonexhaustive, semiexhaustive, gated, or exhaustive. If the server polls a station i which uses either the nonexhaustive or the semiexhaustive service discipline, then the next station polled is station j with probability pij if there was service at station i. The service time at station i is a random variable which may depend on the station polled next. If no service is performed at station i, then the next station polled is station j with probability eij. The time to switch between stations i and j is a random variable which may depend on whether service was performed at station i or not.

If the server polls a station i that follows either the exhaustive service discipline or the gated service discipline, then the next station polled is station j with probability pij regardless of whether there was service at station i or not.

Cycle times and stability conditions are derived for this system, and Conservation Laws are obtained which express a weighted sum of the mean waiting times in terms of known data parameters. For systems with a mix of exhaustive and gated service stations, we show how the individual mean waiting times can be obtained.
Note—The Mean-Coefficient-of-Variation Rule: The Lognormal Case
Authors: Levy Haim
Published: November 2008

The mean-variance (M-V) rule may lead to paradoxical results which may be resolved by employing the mean coefficient of variation (M-C) rule. It is shown that the M-C rule constitutes an optimal decision rule for lognormal distributions.
Dispersive Equity and Social Risk
Authors: Fishburn Peter C. , Sarin Rakesh K.
Published: November 2008

Dispersive equity is concerned with the impact of life-threatening risks from alternative policy decisions on homogeneous groups in a population. It is not addressed to the disutility of various numbers of fatalities that might occur, but rather to how fatalities are distributed over the groups. Although dispersive equity has long been recognized as an important component of some policy decisions, it has received little formal treatment within the matrix of salient factors for such decisions. Our purpose is to advance its formal development.

This is done within a formulation based on probability distributions over potential fatality sets. The formulation gives rise to four distinct but not independent equity concepts: individual risk equity, group risk equity, dispersive equity, and social outcome equity. Each of these is analyzed, but special attention is given to dispersive equity. The paper also comments on relationships between total equity and its four components, and between total equity and the disutility of various numbers of fatalities.
On Manufacturing/Marketing Incentives
Authors: Porteus Evan L. , Whang Seungjin
Published: November 2008

Stereotypically, marketing is mainly concerned about satisfying customers and manufacturing is mainly interested in factory efficiency. Using the principal-agent (agency) paradigm, which assumes that the marketing and manufacturing managers of the firm will act in their self-interest, we seek incentive plans that will induce those managers to act so that the owner of the firm can attain as much as possible of the residual returns. One optimal incentive plan can be interpreted as follows: The owner subcontracts to pay the manufacturing manager a fixed rate for all capacity he delivers. Each marketing manager receives all of the returns from his product. In turn, all managers pay a fixed fee to the owner. Under this plan, the marketing managers will often complain about the stock level decisions, even though these levels are announced in advance. Under a revised plan, the owner can eliminate such complaints by delegating the stocking decisions to the respective marketing managers, without any loss. This plan is interpreted as requiring the owner to make a futures market for manufacturing capacity, paying the manufacturing manager the expected marginal value for each unit of capacity delivered, receiving the realized marginal value from the marketing managers, and losing money on average in the process.
Note—Modeling Coordination in Organizations and Markets
Authors: Niman Neil B.
Published: November 2008

In an earlier issue of Management Science, Thomas Malone (1987) utilizes the concept of vulnerability costs in order to compare the degree of flexibility exhibited by markets and hierarchies. The purpose of this note is to redefine the concept of vulnerability to include the corresponding opportunity costs that are created when a coordinating structure restricts the ability to adjust to a change in market conditions. The conclusion reached is that those structures experiencing the lowest opportunity costs are the least vulnerable, and can therefore be classified as the most flexible.
Reducing Bias in a Personnel Assignment Process via Multiplicative Utility Solution
Authors: Yuan Yufei , Mehrez Abraham , Gafni Amiram
Published: November 2008

In this paper we consider a type of bias which stems from the mathematical algorithm often used to determine an optimal match between two groups. We compare two different solution concepts for the matching assignment problem: the traditionally stable solution vs. a multiplicative utility approach that should avoid the bias. Simulation modeling leads us to conclude that: (1) With respect to all sizes compared in our experiment, applicants and employers groups were always treated far more equally under the multiplicative utility approach than the stable approach. (2) When using the stable algorithm, the size of the bias is affected by the size of the problem (i.e., the larger the problem size is the larger the performance discrepancy between two groups of participants). Further analyses of the sensitivity of the finding to different assumptions (e.g., correlation in the preference orderings of the two groups, or use of nonlinear conversion from ranks to utilities) also resulted in a superior performance of the multiplicative utility algorithm in terms of a more equitable outcome.
A Heuristic Ceiling Point Algorithm for General Integer Linear Programming
Authors: Saltzman Robert M. , Hillier Frederick S.
Published: November 2008

This paper first examines the role of ceiling points in solving a pure, general integer linear programming problem (P). Several kinds of ceiling points are defined and analyzed and one kind called “feasible 1-ceiling points” proves to be of special interest. We demonstrate that all optimal solutions for a problem (P) whose feasible region is nonempty and bounded are feasible 1-ceiling points. Consequently, such a problem may be solved by enumerating just its feasible 1-ceiling points. The paper then describes an algorithm called the Heuristic Ceiling Point Algorithm (HCPA) which approximately solves (P) by searching only for feasible 1-ceiling points relatively near the optimal solution for the LP-relaxation; such solutions are apt to have a high (possibly even optimal) objective function value. The results of applying the HCPA to 48 test problems taken from the literature indicate that this approach usually yields a very good solution with a moderate amount of computational effort.
Indexing in Modeling Languages for Mathematical Programming
Authors: Geoffrion Arthur M.
Published: November 2008

Indexing structures are of fundamental importance to modeling languages for mathematical programming as a device for mathematical abstraction, and because they facilitate achieving conciseness, stability, and error-resistance. The aim of this article is to stimulate discussion of such structures, especially the two most common kinds found in algebraic style languages: sets and relations. We offer a taxonomy of set-based and relation-based indexing structures, a suite of detailed examples illustrating this taxonomy, and a number of specific principles (some arguable and some not) for incorporating indexing structures into modeling languages. We also examine four modeling languages in detail with respect to their indexing capabilities: AMPL, GAMS, LINGO, and SML. By attempting to work all of the illustrative examples in each language, we are able to reach some conclusions concerning relative expressive power, economy of notation, obedience to our principles of “good” language design, ease of data handling, and other criteria.
Analytical Evaluation of Multi-Criteria Heuristics
Authors: Daniels Richard L.
Published: November 2008

This paper considers the problem of evaluating the solution quality of multi-criteria heuristics. By assuming an additive multi-attribute value structure, efficient and heuristic solutions can be translated into value measures that depend only on the relative importance assigned to the criteria of interest. Approximation errors are then defined as the value penalty incurred by approximating an efficient solution with its heuristic alternative. Results are derived which can be used to eliminate solutions that cannot represent the best available alternative among the set of efficient and heuristic solutions. For the bicriterion case, a polynomial algorithm for determining the mean and maximum relative heuristic error for a given problem instance is presented. For more general multi-criteria problems, the maximum relative approximation error can be determined by solving a series of linear programming problems.
R&D Cooperation Between Firms—A Perceived Transaction Cost Perspective
Authors: Brockhoff Klaus
Published: November 2008

Transaction cost is considered as an explanatory variable for the choice between markets and various organizational arrangements for performing some predefined tasks, such as engaging in private R&D. With respect to R&D cooperation between firms, we show that the perception of high transaction cost is related to certain characteristics of the firm and to the type of R&D task. We also show a relationship between the perception of transaction cost and the perceived success of the cooperation. The analysis sheds light on various determinants of transaction costs.
Rational Mean-Variance Decisions for Subsistence Farmers
Authors: Tew Bernard V. , Reid Donald W. , Rafsnider Giles T.
Published: November 2008

This paper explores the issue of approximating expected utility in applying portfolio theory. It has been demonstrated that expected utility is very closely approximated by an appropriate quadratic function. Recent studies have again questioned the empirical validity of mean-variance analysis. These efforts disregard the importance of the differences among various approximations, and historically, have focused on domestic financial securities. We re-examine the problem in the context of determining risk-efficient portfolios of production activities for subsistence farmers. The risks faced by these farmers are large and probably actuarially nonneutral. Thus, recommendations based on an inappropriate quadratic approximation could result in substantial losses in welfare.
Forecast Horizons in the Discounted Dynamic Lot Size Model
Authors: Chand Suresh , Sethi Suresh P. , Sorger Gerhard
Published: November 2008

We derive a sharp upper bound on the minimal forecast horizon in the discounted dynamic lot size model with constant initial demand. This bound is given by m(m + 1), where m is the EOQ's worth, i.e., the number of periods for which the total demand equals Economic Order Quantity. Our results do not require the solution of the infinite horizon problem to be unique. Nor do they require the infinite horizon problem to be well defined. We also prove some sensitivity results with respect to the discount factor and the setup cost.
Implications of Errors in Survey Data: A Bayesian Model
Authors: Gaba Anil , Winkler Robert L.
Published: November 2008

Data from surveys often include errors, and such errors can have a serious effect on inferences about behavior or perceptions. In this paper a model is developed for making inferences based on dichotomous survey data with possible errors. A likelihood analysis reveals an identification problem, which can be avoided when a Bayesian approach is taken. The model is illustrated with purchase recall data from two previous studies, and the analysis shows that errors can have a significant impact on inferences about behavior. Ignoring such errors leads to point estimates that are systematically too high in many cases and to interval estimates that are unrealistically narrow. The effective amount of information in the survey data is reduced dramatically by the presence of errors. These results have important implications for the use and value of survey data in marketing and in many other areas.
The Dynamic Line Allocation Problem
Authors: Ahmadi Reza H. , Dasu Sriram , Tang Christopher S.
Published: November 2008

Consider a plant that has information about the arrival schedule of its “inputs” over a planning cycle. The plant has parallel production lines for processing multiple types of products. However, changeover cost and changeover time are incurred when a line changes from processing one type of products to a different type of products. We present a dynamic line allocation problem that determines an optimal line allocation so that the total relevant cost (changeover and waiting costs) is minimized. In this paper we analyze the complexity of the problem and develop three different heuristics for generating near-optimal allocations.
The Output Process of Serial Production Lines of General Machines with Finite Buffers
Authors: Hendricks Kevin B. , McClain John O.
Published: November 2008

Little is known about the interaction among manufacturing subsystems in a factory. The output of one manufacturing subsystem is usually the input to one or more others in the plant. For example, a production line may provide input to another manufacturing stage, a shipping system, or an automated parts conveyor. In all of these examples, the characteristics of the output from the production line can affect the subsequent process. This paper examines the output process of a serial production line of N machines with general processing time distributions and finite buffer capacities.

Simulation is used to examine the effects of line length, buffer capacity, and buffer placement on the inter-departure distribution and correlation structure (autocorrelation function) of the output process of the production line. Results from this analysis are useful in setting production line design parameters and in determining the extent to which buffer placement can be used to control the variability of the output process, and thereby the amount of work-in-process present in downstream subsystems. Additional insights are provided to help explain why small buffers in production lines are normally adequate and to help us better understand the effects of buffers on tightly coupled production systems.

By using a variety of processing time distributions, previously unknown effects attributed to skew of processing time are revealed. Since skew can often be reduced or eliminated by operator training, these effects are of particular interest since they can help to quantify some of the benefits of training.
Antecedents and Consequences of Project Team Cross-Functional Cooperation
Authors: Pinto Mary Beth , Pinto Jeffrey K. , Prescott John E.
Published: November 2008

Cross-functional teams can greatly facilitate the successful implementation of projects. This study examined the influence of a set four antecedent constructs (superordinate goals, accessibility, physical proximity and formalized rules and procedures) on the attainment of both cross-functional cooperation and perceived project outcomes. Through the use of path analysis, the results indicated that superordinate goals, physical proximity and project team rules and procedures have significant direct and/or indirect effects on project outcomes through influencing cross-functional cooperation. Further, cross-functional cooperation was a significant predictor of both perceived task and psychosocial project outcomes. Directions for management practice and future research are discussed.
Direct Estimation of Synergy: A New Approach to the Diversity-Performance Debate
Authors: Davis Rachel , Thomas L. G.
Published: November 2008

This study examines the linkages between relatedness and synergy in the context of diversification among U.S. pharmaceutical firms for the period 1960–1980. Rather than assume (as in the entropy, Herfindahl and concentric indices of diversification) that the levels of synergy generated by different related combinations of business units are identical, we estimate synergy directly using a modified version of the concentric index. In addition to estimating synergy using capital market performance of the firm as a whole, we examine the effects of nondrug diversification on the innovative productivity of firms' pharmaceutical divisions alone.

Our two main findings are that production relatedness, such as that between drugs and chemicals, in fact did not imply synergy over the period of our study; and that the patterns of synergy for different types of relatedness shifted over time with the industry life cycle.
The Effects of Incentive Compensation Contracts on the Risk and Return Performance of Commodity Trading Advisors
Authors: Golec Joseph H.
Published: November 2008

This paper shows that commodity trading advisors' (CTAs) investment performance may be partially explained by their incentive compensation contracts. Contracts include base, incentive and asset parameters. The relationships between contract parameters and performance are theoretically indeterminate but are examined here empirically. Results indicate that incentive parameters are positively related to return means and standard deviations. The dollar amounts of assets CTAs manage are negatively related to return means and standard deviations, supporting Elton et al.'s (1987, 1989) finding that CTA performance falls after public offerings of commodity funds. Intuitively, since dollar fees are a function of assets, at the higher asset and fee levels achieved through commodity fund offerings, CTAs may safeguard assets and fees by pursuing less risky investment strategies.
Stochastic Dedication: Designing Fixed Income Portfolios Using Massively Parallel Benders Decomposition
Authors: Hiller Randall S. , Eckstein Jonathan
Published: November 2008

Drawing on recent developments in discrete time fixed income options theory, we propose a stochastic programming procedure, which we call stochastic dedication, for managing asset/liability portfolios with interest rate contingent claims. The model uses scenario generation to combine deterministic dedication techniques with stochastic duration matching methods, and provides the portfolio manager with a risk/return Pareto optimal frontier from which a portfolio may be selected based on individual risk attitudes. We employ a fixed income risk metric that can be interpreted as the fair market value of a collection of interest rate options that eliminates bankruptcy risk from the asset/liability portfolio. We incorporate this metric into a risk/return stochastic optimization model, using a binomial lattice sampling procedure to construct interest rate paths and cash flow streams from an arbitrage-free term structure model. The resulting parametric linear program has a particularly simple subproblem structure, and we have been able to solve it using resource-directed decomposition on a massively parallel computer system, the Connection Machine CM-2. We take a novel approach that uses a standard serial simplex method to solve the master problem, but generates scenarios and Benders cuts in a massively parallel manner. We discuss the performance of this implementation and present the results for a simple pension fund immunization problem.
A Practical Derived Lease Rate Algorithm
Authors: Gutman Eyal , Yagil Joseph
Published: November 2008

Underlying the widely used multiple-investment-sinking fund (MISF) method for lease evaluation is the determination of a derived lease rate which is a specific rate that provides the lessor with the required yield on equity. To compute this derived lease rate, trial-and-error techniques are traditionally used. In addition to being based on trial-and-error, the employment of these techniques requires a specification of the precise time structure of the various types of cash flows involved, and this can be somewhat technically cumbersome. To overcome these shortcomings, this study presents a mathematical derivation of a formal expression for the derived lease rate. Due to the widespread use of the MISF method, it seems that the formal expression developed here can be very useful for decision makers (at both the corporate as well as the individual-investor levels) in determining the derived lease rate in practice. Another desirable property of the model is that it can be easily employed for the purpose of studying the effects of changes in the various parameters involved on the derived lease rate.
Organizational Simulation and Information Systems Design: An Operations Level Example
Authors: Kumar Arundhati , Ow Peng Si , Prietula Michael J.
Published: November 2008

The interplay between organizational structure, the decisions made by agents within the structure, and the technology supporting those agents is an important and complex, but not well understood, phenomenon in modern organizational studies. In this paper we describe how simulating key aspects of an organization's structure, in this case a hospital, can yield insights into the design of information systems and their performance. In particular, we report on a project that simulates alternative distributed decision-making approaches for patient scheduling tasks. The results indicate that there are important and complicated interactions between the alternative organizational structures simulated, the form of the information systems supporting those structures, and the task environment. This suggests that current, universal, a priori assumptions about the interplay between technology and organizational structure are questionable. Furthermore, organization-specific simulation is seen as a potentially useful method of explicating the important tradeoffs in alternative design possibilities.
Comments on the Two-Product, Single-Machine, Static Demand, Infinite Horizon Lot Scheduling Problem
Authors: Shaoxiang Chen
Published: November 2008

One of the necessary and sufficient conditions derived by F. F. Boctor (1982) for feasibility of a repetitive two-product schedule is that the cycle times (T1 and T2) must be integer multiples of some time interval T (Propositions 2, 3 and 4). This result also holds for N-product schedules. However, the proof for Propositions 3 and 4 in [1] is not exactly valid and therefore a correction has to be made.
Parallelism in Information Production: Moral Hazard and Relative Performance Evaluations
Authors: Bogetoft Peter
Published: November 2008

We analyse how to design incentive schemes for agents producing information. The agents may, for example, be divisional managers, market researchers, OR consultants, financial analysts, corporate auditors, research scientists or political pollsters. We show that an agent should be compensated more for making a correct rather than an incorrect prediction, and for agreeing rather than disagreeing with colleagues. Depending on the environment, correctness should be compensated more or less than agreement. Also, compensation should increase with the difficulties of making correct or conforming predictions. One consequence of the result is that it may sometimes reduce a principal's total incentive costs to engage with more information producers performing parallel investigations, because the possibility to make relative performance evaluations of the agents may substantially reduce the costs of motivating the agents in performing their duties as desired.
Portfolio Selection and Asset Pricing—Three-Parameter Framework
Authors: Simaan Yusif
Published: November 2008

Idiosyncratic security risks are modelled as following a joint spherical distribution characterized by a mean vector and a generalized covariance matrix. Skewness is generated by a single factor for the whole economy, but upon which different securities have different loadings. This results in three-fund separation—two funds to span the spherical risk and one more fund to span the additional skewness risk. A three-parameter normative portfolio analysis that allows short sales restrictions is developed. In addition, a three-parameter capital asset pricing model is provided.
Two-Stage Perishable Inventory Models
Authors: Goh Chon-Huat , Greenberg Betsy S. , Matsuo Hirofumi
Published: November 2008

In this paper we consider perishable inventory systems with two types of demand. Demand may be for either fresh items or for somewhat older items. We model the system with two inventory stages. The first stage holds fresh items and the second stage holds the older items. We approximate the performance of the two-stage inventory system and compare two managerial policies.
On the Use of Mean-Variance and Quadratic Approximations in Implementing Dynamic Investment Strategies: A Comparison of Returns and Investment Policies
Authors: Grauer Robert R. , Hakansson Nils H.
Published: November 2008

This paper compares two approximation schemes for calculating the optimal portfolios in the discrete-time dynamic investment model, specifically, the mean-variance (MV) and the quadratic approximations, to the exact power function method. Future returns are estimated via the empirical probability assessment approach. The results show that (i) with quarterly revision, the MV model approximates the dynamic model very well; (ii) with annual revision, there are often sharp differences between the power function model and the MV approximation; and (iii) these differences become even larger when the quadratic approximation is used.
Common Cycle Lot-Size Scheduling for Multi-Product, Multi-Stage Production
Authors: El-Najdawi Mohammad K. , Kleindorfer Paul R.
Published: November 2008

In this paper we study the Common Cycle Scheduling Problem (CCSP). This classic production problem is concerned with determining optimal production lot sizes for a given set of products using a common facility. CCSP is based on scheduling all products using a common (base) cycle time, so that the lot size for each product is the forecasted demand for that product over the base cycle time. This research provides an optimizing framework for CCSP for a multi-stage, multi-product, flow-shop environment under deterministic and stationary conditions, assuming a fixed sequence is maintained across all processing stages. The framework presented considers the costs of work-in-process inventory and determines a jointly optimal common cycle time and production schedule (start and finish times for each product's production lot-size) for the multi-stage facility in question. The paper also reports some results on the impact of alternative sequencing rules for the CCSP context.
The Effect of Attribute Ranges on Weights in Multiattribute Utility Measurements
Authors: von Nitzsch Rüdiger , Weber Martin
Published: November 2008

Multiattribute utility theory requires a specific relation between the range of outcomes of each attribute and the weight for that attribute. The greater the range, the greater the weight has to be. Experimental results show that subjects do not adjust their judgments properly if the range is varied. For the two methods tested the adjustment is smaller than required by theory. The bias was smaller for a regression procedure than for the direct ratio method. Weights based on an intuitive range were not found to be superior to those elicited over different ranges.
Bounds for Different Arrangements of Tandem Queues with Nonoverlapping Service Times
Authors: Wan Yat-wah , Wolff Ronald W.
Published: November 2008

We bound the difference in performance measures among different orders of tandem queues when service times are nonoverlapping. Two types of nonoverlapping service times, with respect to (w.r.t.) tasks and w.r.t. customers, are defined; it is not required that service times be independent. For nonoverlapping service times w.r.t. tasks, we bound the sample-path difference in number of customers in system by one, and bound the corresponding time-average difference by the traffic intensity of the longest station. For nonoverlapping service times w.r.t. customers, we bound the difference in mean sojourn time when the service times are bounded random variables. While we are motivated by probabilistic results, our methods and results are entirely deterministic.
Expectations and Undesired Inventory
Authors: Mills Edwin S.
Published: November 2008

Both economists and businessmen are interested in knowing whether inventories are higher or lower than firms desire: Economists because it would provide a clue to the structure of business expectations, businessmen because it would give some indication of the future trend of business. In this paper a model is presented with the aid of which an estimate, however crude, of the amount of undesired inventory in the economy is made from market data.
Decision Rules for Buffer Inventories
Authors: Bonini Charles P.
Published: November 2008

This paper presents the derivation of decision rules for determining the amount of each item to produce and hold in inventory in a multi-product factory. Under certain conditions the rules are good approximations to optimal minimum cost solutions.

The model assumes that production is determined for all the items at the beginning of the production period. It uses as a framework a decision rule for the determination of aggregate inventory; this aggregate rule is based upon the approximation of factory cost by a quadratic cost function.

A total inventory cost function, based upon the aggregation of the individual item rules, is derived.
Components of Culture: Nature, Interconnections, and Relevance to the Decisions on the Organization Structure
Authors: Baligh Helmy H.
Published: November 2008

Culture is defined in terms of components and parts. The logical nature of the components and of the connections between them are identified and analyzed. These connections are used as a basis for the argument that there is a meaningful concept of the fit between the components of the organization structure and those of its cultural setting. This concept of fit is defined and the values it may logically take are identified. A theory on the goodness and badness of fit between structure components and culture components is discussed and two of its many pieces are developed in detail.
Capturing the Correlations of Fixed-income Instruments
Authors: Mulvey John M. , Zenios Stavros A.
Published: November 2008

This paper develops a framework for managing portfolios of fixed income instruments based on traditional principles from the equities market, i.e., based on diversification. It shows, through an analysis of the high-yield bond market over the period 1987 to 1991, that fixed-income prices could be highly correlated. These correlations can be quantified and integrated, in a systematic way, in an asset/liability management framework. For vanishing fixed income securities, however, we cannot resort to statistical analysis of historical data in order to quantify correlations. The paper develops a forward-looking simulation procedure for capturing correlations. Applications are illustrated for examples from high-yield bonds and mortgage-backed securities. The superiority of the proposed approach over the traditional portfolio immunization techniques is demonstrated in the context of funding an insurance liability stream with mortgage instruments.
A Parametric Analysis of a Constrained Nonlinear Inventory-production Model
Authors: Gautier Antoine , Granot Frieda
Published: November 2008

We discuss in this paper some inventory-production models which can be formulated as nonlinear parametric network flow problems with one additional linear constraint. Several sensitivity analysis questions are addressed. The qualitative sensitivity results obtained provide the manager with insight to understanding qualitatively how to respond to changes in the environment such as production costs, inventory capacity, external demand, machine break-down, strike, or variations in inventory carrying cost without additional computation.
Clustering for the Design of SONET Rings in Interoffice Telecommunications
Authors: Laguna Manuel
Published: November 2008

Optical fiber systems play an essential role in today's telecommunications networks. The recently standardized SONET (Synchronous Optical Network) technology has made rings the preferred architecture for designing survivable networks. The network design problem is very complex in nature, because it involves not only the configuration of rings at the logical level, but also the mapping of this configuration into physical fiber paths. This paper deals with the problem of finding optimal clusters of offices, which can be used as the basis for designing logical rings. A mathematical model of the problem is presented, and a heuristic solution based on the tabu search framework is developed to find optimal or near-optimal solutions.
Valuing Asian and Portfolio Options by Conditioning on the Geometric Mean Price
Authors: Curran Michael
Published: November 2008

The valuation of Asian, or a average price, options and of European options on portfolios in a “Black-Scholes” environment has given researchers trouble. The difficulty with these problems is that the probability distribution of the variable which determines the option payoff at expiration, a sum of correlated lognormal random variables, has no closed-form representation. For the Asian case the approach generally taken has been to approximate the distribution of the arithmetic average price, while for the portfolio option case, attempts have focused on discretizing the joint distribution of the terminal prices of the assets comprising the portfolio and approximating the expected risk-neutral option payoff with a discrete sum. These approaches are not entirely satisfactory. The distribution-approximating procedures for Asian options are not very accurate for some cases, while the computational requirements for obtaining a reasonably accurate estimate using the discretizing or multinomial approaches for portfolio options become excessive as the number of assets rises above four or five, because the computation time is exponential in the number of assets. This paper presents a method based on conditioning on the geometric mean price which results in a far more efficient technique for valuing these options.
Regulatory Measurement and Evaluation of Telephone Service Quality
Authors: Lynch John G. , Buzas Thomas E. , Berg Sanford V.
Published: November 2008

Regulators of utilities that operate as local monopolies would like to set prices or allow rates of return based upon the quality of a utility's service. However, quality is highly multidimensional. Traditionally, regulators have collected measures of quality on many separate dimensions, and compared performance on these dimensions to explicit pass-fail standards. They have lacked a method of combining complex patterns of substandard and superstandard performance on these many dimensions to arrive at an overall evaluation of the quality of service. To redress this problem, we first describe the information processing problems regulators encounter when they attempt to integrate this complex array of information intuitively, and the problems that arise when the link between service quality (as reflected in patterns of passed and failed standards) and regulatory incentives is not made explicit to utility management. We develop a bootstrapped method for formalizing each expert regulator's evaluation policy using hierarchical conjoint analysis, and apply this method to the evaluation of local telephone companies by the Florida Public Service Commission (FPSC). We show that experts within the FPSC, the regulated utilities, and a large telephone customer exhibit very high agreement about how the various dimensions of quality should be differentially weighted. We derive a consensus measure of overall quality, Q̂, and identify a score associated with meeting all standards exactly, Q̂*. Utilities can then be rewarded based upon whether or not they exceed Q̂*, rather than on the basis of how many standards are met. Compared with a pattern in which each standard is met exactly, there exist patterns of mixed substandard and superstandard performance on the individual dimensions of quality that are less costly to produce and higher in overall quality. We compare utility incentives when rewards are based upon Q̂ to those under the current pass-fail regime.