bluuebunny/crossref_metadata_2025 huggingface dataset:
Communication—Modelling Library Collections
Authors: Sandison A.
Published: November 2008

Sinha and Clelland's recently published paper [Sinha, B. K., R. C. Clelland. 1976. Modeling for the management of library collections. Management Sci. 22 (5) 547–557.] was received by the editor in September 1972, and this no doubt explains their apparent ignorance of recent literature.
Communication—Correction Note to the Paper, “On Jockeying in Queues”
Authors: Koenigsberg Ernest
Published: November 2008

In the paper “On Jockeying in Queues” (Management Science, Vol. 12 (1966), pp. 412–436) I presented erroneous results for two of the seven models examined.
Optimization of Petroleum and Natural Gas Production—A Survey
Authors: Durrer E. J. , Slater G. E.
Published: November 2008

The paper surveys the literature dealing with the optimization of petroleum and natural gas production: Drilling, reservoir simulation, production planning and operations, enhanced recovery processes. Areas of possible future work are identified, such as optimal design and cost benefit studies of enhanced recovery projects. Problems are discussed which, in the authors' opinion, represent major obstacles in developing optimization models for production applications, for example, the nonlinearity and frequently large dimensions of the models, and the inherent uncertainties during the development phase of a field. Attention is also paid to the changing structure of the petroleum industry worldwide, which is shifting emphasis from traditional problems such as internal planning models to studies of new recovery processes, often labor-intensive and to be applied in small fields.
Algoristics for Single-Machine Sequencing with Precedence Constraints
Authors: Morton Thomas E. , Dharan Bala Ganga
Published: November 2008

Although Horn, Sidney and Lawler have considered the problem of minimizing weighted mean flow time for n jobs with precedence constraints on one machine, practical exact algorithms for the general case remain elusive. Two relatively sophisticated heuristics are presented which are computationally attractive. Each is optimal on large subclasses of problems; computational study demonstrates each to be extremely close to optimal in general. Such heuristics are dubbed “algoristics.” The first-come first-served heuristic serves as a benchmark. Finally, a simple “myopic” heuristic produces about 80% of the savings of the algoristics; it possesses the advantages of a dispatching rule. A standard branch and bound procedure has also been computed for a large subset of problems for comparison purposes. Planning horizon results are also derived.
Amtrak, Auto-Train, and Vacation Travel to Florida: Little Trains that Could
Authors: Gapinski James H. , Tuckman Howard P.
Published: November 2008

This paper examines whether Amtrak and Auto-Train altered the demand for vacation travel to Florida by train. A profile of tourist arrivals by train reveals a downward trend until inception of effective Amtrak and Auto-Train service; the trend then reverses. A travel demand function is postulated to include income, price, and interaction dummies which allow for consequences of the trains. Because of multicollinearity, the equation is estimated by ridge regression, the results suggesting that the trains modified both income and price effects in the function. Likely implications of Amtrak and Auto-Train for Florida's leisure industries are considered.
Nevada's Gaming Revenues: Time Characteristics and Forecasting
Authors: Cargill Thomas F. , Eadington William R.
Published: November 2008

The growing interest in gaming activity has led to an increased interest in Nevada's economy. Gross gaming revenues are regarded as an important economic indicator of the Nevada economy and of considerable importance to the State's budgetary planning since taxes derived from these revenues represent almost fifty percent of the general revenues in any given year. The major objective of this study is to identify the time varying characteristics of quarterly gaming revenues over a twenty-year period for the three most important economic areas within Nevada. This will provide the basis for developing a meaningful forecasting methodology.

Examination of the gaming revenues for seasonal and non-seasonal fluctuations indicate that each area's revenues exhibited a consistent seasonal pattern and the amplitude of the seasonal fluctuation tended to diminish over time. No significant evidence of non-seasonal fluctuations such as business cycles could be found. Based on the time characteristics of the gaming revenues it was concluded that the autoregressive-moving average forecasting techniques suggested by Box and Jenkins would be the most appropriate forecasting methodology to employ. A Box-Jenkins model was estimated for each area over a period ending in 1974-IV and forecasts were generated for the period from 1975-I to 1977-IV. The forecasts were judged to be reasonably close to actual gaming revenues at least for the first 6 quarters of the forecast period.
Stochastic Dominance Without Transitive Preferences
Authors: Fishburn Peter C.
Published: November 2008

Traditional definitions of stochastic dominance assume that the decision agent's preference-or-indifference relation on outcomes of risky decisions is transitive. This paper proposes a stochastic dominance relation for the comparison of risky decisions that is applicable to any complete and reflexive preference-or-indifference relation, or to any asymmetric preference relation. The new dominance relation possesses a number of intuitively desirable properties and is equivalent to the usual stochastic dominance relation when preferences are transitive.
Police Deployment—Introduction
Authors: Larson Richard C.
Published: November 2008

Introduction to the special issue devoted to police deployment. By publishing these four refereed papers together in one issue of Management Science, we have the dual purpose of presenting new substantive research results in an important public sector problem area and of attracting other management scientists to the area. The field is still relatively new for OR/MS professionals, and much work remains to be done.
A Patrol Car Allocation Model: Background
Authors: Chaiken Jan M. , Dormont Peter
Published: November 2008

Before designing a computer program for allocating police patrol cars by time and geography, a review was undertaken of previously existing programs of this type. Nearly all of the programs calculated queuing statistics for the collection of patrol cars by assuming a steady-state system with calls for service arriving within priority levels according to Poisson processes and having independent, identical, exponentially distributed service times. Unavailabilities of patrol cars for reasons other than calls for service were handled in the models either by artificially increasing the arrival rate of calls or by assuming that the number of servers is smaller than the number of patrol cars. Some programs calculated additional performance measures such as travel times and preventive patrol frequencies. All the programs had the capabilities to describe performance statistics for an allocation proposed by the user, but they differed in their capabilities to prescribe desirable allocations. None of the programs had achieved general acceptance because each had virtues and inadequacies not present in the others.
A Perspective on Modeling in Decision Analysis
Authors: Tani Steven N.
Published: November 2008

We use mathematical modeling in decision analysis to help us obtain a profit lottery that is “better” than the one we can assess directly. The “goodness” of the profit lottery is defined by the concept of authenticity of probabilities. The role of modeling is to simplify our assessment task through decomposition of the profit lottery. However, budgetary constraints force us to make approximations in the modeling process and thereby force us to misstate the profit lottery. When dealing with our dissatisfactions about the modeling in a decision analysis, we regard models as subjective expressions of our uncertainty rather than as objective descriptions of the real-world.
Note—Solving the Generalized Market Area Problem
Authors: Todd Michael J.
Published: November 2008

Lowe and Hurter introduced the “generalized market area problem” of simultaneously determining production levels and distribution patterns at n plants to satisfy demand distributed over a subset of Rk. Here we give simpler proofs and extensions of their results. We also show how the problem can be solved using unconstrained optimization techniques.
Models of New Product Diffusion Through Advertising and Word-of-Mouth
Authors: Dodson Joe A. , Muller Eitan
Published: November 2008

A model of the diffusion process is developed which recognizes (1) the interaction between adopters and non-adopters and (2) the influence of external information sources such as advertising. The model is extended by incorporating the effects of repeat purchasing. The models written by the following authors are shown to be special cases of this model: Gould. Nerlove and Arrow, Vidale and Wolfe, Palda, Bass, Nicosia, and Glaister. The behavioral assumptions which support the model are made explicit and the implications of these assumptions for the shape of the new product growth curve are derived.
Priority Assignment of OSHA Safety Inspectors
Authors: Adam Everett E.
Published: November 2008

A priority assignment model for OSHA safety inspectors was developed and tested using 34,500 actual employee injuries from a total of 105,000 injuries in Missouri during 1973. The model combines expert opinions concerning selection of injury criteria and data from, reports of employee injuries. First the model computes a relative accident performance score for each employer. Employers are then grouped by general industrial classification and ranked according to their relative accident performance score. This “worst-first” ranking provides the rationale for assigning OSHA safety inspectors to employer locations. The model and research have been reviewed by Region VII OSHA personnel and implementation is currently under consideration within the Department of Labor. This model could replace current random assignment of inspectors in Missouri. Region VII, and the nation.
Probability Revision Under Act-Conditional States
Authors: Schoner Bertram , Mann J. K.
Published: November 2008

This paper presents a simplified procedure to revise prior probabilities when these probabilities are conditional on acts. “Moral hazard” in insurance is one example where such conditions arise. Here coverage granted by the insurer may influence the probability of loss. The procedure developed in this paper permits evidence obtained from some experiment connected with one act to be employed in the revision of probabilities conditional not only on that act but on other acts as well. An example is presented and analyzed in which an insurance company must decide whether or not to grant full coverage to a medical group, based on evidence obtained from the claims history of that group under partial coverage.
Incorporating Exogenous Factors in Adaptive Forecasting of Hospital Census
Authors: Kao Edward P. C. , Pokladnik Frank M.
Published: November 2008

In this paper, we study the use of a recursive discounted least squares model for forecasting daily hospital census. We show, by means of a case study, how one can incorporate, with a minimum amount of cost and effort, institutional and exogenous factors explicitly into the model so as to enhance its forecast accuracy. These factors include holidays, capacity changes, and other events known to affect occupancies. The forecast modification comprises direct adjustments of model parameters, and judicious control of parameter updatings.
Multiobjective Decision Analysis for Transmission Conductor Selection
Authors: Crawford Dale M. , Huntzinger Bruce C. , Kirkwood Craig W.
Published: November 2008

This paper describes a multiobjective decision analysis performed to assist in selecting the conductor, tower size, and number of subconductors per bundle for a proposed 765 kV transmission line. Multiobjective decision analysis is shown to provide a systematic, logical framework for handling uncertainty and multiple objectives in this problem.
Note—Comments on “Single Cycle Continuous Review Policies for Arborescent Production/Inventory Systems”
Authors: Muckstadt John A. , Singer Howard M.
Published: November 2008

In the paper by Graves and Schwarz [Graves, Stephen C., Leroy B. Schwarz. 1977. Single cycle continuous review policies for arborescent production/inventory systems. Management Sci. 23 (5, January) 529–540.], we observed an error in their discussion of optimal policies for the one warehouse-m retailer system. Specifically, Theorem 1, which states that the optimal stationary policy is a single-cycle policy, is incorrect.
Reply—On Stationarity and Optimality in Arborescent Production/Inventory Systems
Authors: Graves Stephen C. , Schwarz Leroy B.
Published: November 2008

We are indebted to Jack Muckstadt and Howard Singer for calling our attention to two errors in [Graves, S. C., Schwarz, L. B. 1977. Single cycle continuous review policies for arborescent production/inventory systems. Management Sci. 23 (5, January) 529–540.].
Communication—On “Dynamic Programming for a Stochastic Markovian Process with an Application to the Mean Variance Models” by J. Goldwerger
Authors: Miller Bruce L.
Published: November 2008

Communication—On “Dynamic Programming for a Stochastic Markovian Process with an Application to the Mean Variance Models” by J. Goldwerger, Management Sci. 23 (6) 612–620.
Managerial Differences in Assessing Probabilities of Technical Success for R&D Projects
Authors: Rubenstein Albert H. , Schröder Hans-Horst
Published: November 2008

Based on the notion that the process of assessing probabilities of technical success for R&D projects is composed of four phases—the perception phase, the evaluation phase, the transformation phase, and the review phase—three types of variables are identified as accounting for individual differences in probability assessments: personal, organizational, and situational variables. The empirical findings about the impact of some selected variables on subjective probabilities are described and discussed for their relevance to the problem at hand. It is found that both an assessor's specific relations towards the project to be evaluated and his organizational rank may be of use in explaining individual differences in R&D probability assessments.
Queues with Instantaneous Feedback
Authors: D'Avignon Gilles R. , Disney Ralph L.
Published: November 2008

Queueing problems in which a customer having received a unit of service, returns to the waiting line, under some decision rule, to receive another unit of service occur often in applications. Inspection procedures provide such a framework for units that must be reworked. A large class of such problems appears in computer modelling under the name of round-robin models and foreground-background models. In the present paper, such a system is referred to as a queue with instantaneous feedback.

Throughout the text it is assumed that there are two independent Poisson arrival processes giving two types of customers. Each type of customer has its own service time distribution. The decision to feedback (to receive another unit of service) or not is based on the type of customer completing service.

Conditions for the existence of a steady state queue length are found and some joint and marginal distribution of these queue lengths are given. Moreover it is shown that several earlier results in queueing and computer modelling can be obtained simply from the results given here. A particular case of the foreground-background model in computer systems analysis serves as an example.
Minimising the Maximum Penalty in the Two-Machine Flow Shop
Authors: Townsend W.
Published: November 2008

It is shown how Lawler's procedure for the one-machine case can be combined with Johnson's rule to produce a branch-and-bound algorithm for the two-machine version.
“Linear Multiparametric Programming by Multicriteria Simplex Method”: Errata
Authors: Yu P. L. , Zeleny Milan
Published: November 2008

Corrections to the authors' paper “Linear Multiparametric Programming by Multicriteria Simplex Method,” Management Science, Vol. 23, No. 2, October 1976, pp. 159–170.
The Single Machine Problem with Quadratic Penalty Function of Completion Times: A Branch-and-Bound Solution
Authors: Townsend W.
Published: November 2008

N jobs are to be sequenced on a single machine, each job carrying a penalty cost which is a quadratic function of its completion time. The objective is to find a sequence which minimizes the total penalty. Criteria are developed for ordering a pair of adjacent jobs in a sequence and these are incorporated into a branch-and-bound procedure.
Optimization of Priority Queues—A Semi-Markov Decision Chain Approach
Authors: Robinson Derek
Published: November 2008

We consider the problem of optimally controlling a semi-Markov chain with countable state space and unbounded costs. We assume that a particular control is suspected of being optimal and derive conditions for checking whether this is so. The result is applied to the following queueing system. A single server serves two types of customers who arrive at random and join separate queues. The two types of customer differ in respect of their arrival rates, waiting costs and service time distributions. The server has control over which queue to serve at any time and may interrupt the service of a customer in order to serve a customer of the other queue. In the latter case, however, an interruption cost is incurred which reflects the disruption or loss of goodwill entailed. The server requires a policy for determining when he should switch queues which minimises the long run expected cost per unit time. We find that such a policy specifies that one of the queues has higher priority. When the service time distribution of the other queue is exponential, this priority is pre-emptive if the length of the higher priority queue exceeds a critical value and is otherwise postponable. When the distribution is Erlang-2, the priority depends both on the length of the priority queue and the phase of service.
Forecasting the Product of Two Time Series with a Linear Asymmetric Error Cost Function
Authors: Wood Steven D. , Steece Bert M.
Published: November 2008

Our objective is to present a methodology which minimizes the expected cost of predictive errors when: (a) predictions are obtained for the product of two separately attained but contemporaneous time series, and (b) a linear asymmetric error cost function reflects the costs associated with predictive errors. Integrated Autoregressive-Moving Average models characterize the two series. Each prediction is expressed as a quantile of the conditional distribution of the contemporaneous product of the two series (i.e., a quantile of the distribution of the product of two Gaussian random variables with nonzero means). An actually observed hospital food service demand problem exemplifies the procedure and utility of our methodology.
Deterministic Inventory Lot Size Models—A General Root Law
Authors: Barbosa Lineu C. , Friedman Moshe
Published: November 2008

The article presents a continuous time inventory model with known time varying demand. The relevant costs are the carrying and replenishment costs; backlogs are prohibited, replenishments are instantaneous, and the planning horizon is finite and known, The problem is to find the optimal schedule of replenishments, i.e., their number and the schedule of time intervals between consecutive orders. A complete solution is given for demand functions of the type b(t) = ktr, k > 0, r > −2, where t stands for time, and the asymptotic properties of the solution when the planning horizon tends to infinity are investigated. For r = 0 the solution reduces to the results obtained by Carr and Howe for the constant demand case with finite horizons, and to the classical “square root law” for infinite horizons. For r = 1 it yields the “cubic root law” given by Resh, Friedman, and Barbosa for time proportional demand rate. More generally, for r integer the solution can be expressed in an “(r + 2) root law.”
Locating Rural Social Service Centers in India
Authors: Patel Nitin R.
Published: November 2008

This paper describes experience with application of operations research techniques in planning new roads and social service centers for the Dharampur area in India. The work involved designing a road network using a minimal spanning tree algorithm; selecting the number and location of the service centers to be constructed over a five year period using a set covering algorithm; and developing a schedule for the construction of the service centers using dynamic programming. Substantial economic benefits resulted from using the mathematical models. The experience shows that operations research models can be useful in providing an objective rationale for administrative decisions, thus playing an important role in the resolution of political conflict.
Multi-Stage Production Planning
Authors: Gabbay Henry
Published: November 2008

The impact of poor production and inventory planning can be significant in any manufacturing firm. On an aggregate level, excessive inventories can lead to poor cash flows necessitating financing to cover operational costs while stock outs can lead to customer service problems and the eventual loss of business. Therefore managers must utilize their aggregate resources effectively while optimizing individual item run quantities on a daily operational level. This paper presents an analytic framework for a hierarchical treatment of a multi-stage linear programming production and inventory problem. The paper is an extension of the single stage case by the author.

The problem we address is multi-item, capacitated, and linear. We require certain cost assumptions: monotone costs to determine an optimal aggregate plan and to establish planning horizons, and separability of costs to optimally disaggregate aggregate production. The hierarchical procedure not only makes business and organizational sense, but is also analytically feasible, computationally attractive, and reduces detailed forecasting requirements. The intent of the paper is twofold: first to present an alternative to the classical single monolithic model for the manager and analyst and second, to provide, for the researcher, a basis for a potentially fruitful area of research in hierarchical planning.
The Optimum Span of Control in a Pure Hierarchy
Authors: Keren Michael , Levhari David
Published: November 2008

This is a model of a pure hierarchy which oversees a given number of productive units. Its aim is to minimize costs, which are the sum of wage costs and costs caused by delays in decision making. The advantage of the model is that it permits the calculation of an optimum formal structure of the hierarchy in terms of the span of control at different levels.

The general result is that spans of control should increase as one goes down the levels of the hierarchy. However, when time savings become more and wage costs less important, the difference between the optimum spans of control shrinks; in the limit, when wage costs are not considered at all, they become equal. These results support the findings of some empirical studies: there is evidence for increasing spans of control in business organizations, while in armies, where cost considerations are secondary, spans of control tend to be more uniform.
An Optimal Algorithm for Sales Representative Time Management
Authors: Zoltners Andris A. , Sinha Prabhakant , Chong Philip S. C.
Published: November 2008

This paper addresses the time management problem confronted by sales representatives. The sales representative planning his itinerary must decide the best way to ration time among the accounts comprising his territory. The time management problem is formulated as an integer program whereby each admissible call frequency for each account is represented by a zero-one decision variable. A branch-and-bound integer programming algorithm for this problem is presented. The algorithm is unique in that two integer programming formulations of the problem are used simultaneously in the search procedure and an approximation-cum-relaxation is evaluated at each branch in the search. Computational testing of the algorithm shows that it can solve many realistic time management problems optimally in fractions of a second.
Note—A Single Server Queue with Constant Service Time and Restricted Accessibility
Authors: Hokstad Per
Published: November 2008

A queuing system has restricted accessibility if not every customer is admitted to the system. In this paper a single server queuing system is studied, where the arriving customers are rejected if their waiting plus service times would exceed a fixed amount K. The arrivals follow a Poisson process. In this case an equation for the stationary waiting time distribution is given. The explicit solution of this equation is obtained, when the service time is assumed to be constant. For this model the queue length distribution is also easily derived. It is observed that the queue with finite waiting room is a special case of this model.
Incentives in a Divisionalized Firm
Authors: Groves Theodore , Loeb Martin
Published: November 2008

This paper examines the problems of coordinating and controlling divisions of a large firm. Divisions are typically interdependent and the corporate headquarters plays an important role in coordinating such decisions as pricing, allocation of funds to the divisions, and determining the level of corporate-wide research and development. One important problem is how to provide division managers with incentives both to act in congruence with the goals of the overall firm and to transmit accurate information to the corporate center so that the center's decisions may be enhanced.

The analysis proceeds by assuming that each division manager possess perfect knowledge of his own division's technology and the market conditions it faces. Each division's profits, however, depend upon certain coordinating decisions taken by the center. The center is assumed to be at least partially ignorant about the operations of the divisions and to rely upon information from the divisions in making coordinating decisions.

A control structure for a divisionalized firm is defined to be a set of rules for evaluating division managers and a decision-rule for central coordinating decisions. Division managers are assumed to act to maximize their evaluation measures so that managerial shirking is not considered. In this setting where perfect information is available, problems of risk aversion and risk sharing do not arise, and a minimum test for optimality of a control structure is given. Specifically, when each division manager seeks to maximize his own evaluation measure and when the center uses its decision-rule for coordination, overall firm profits should be maximized.

A control structure is proposed in which the center acts as if it is receiving “truthful” information from the division managers. This naive decision rule is justified by the accompanying evaluation measures that provide division managers with incentives to communicate in an honest manner. With the proposed evaluation measures, each division manager is rewarded on the basis of his division's contribution to overall profits. If the division's message to the center has no impact on the center's coordinating decisions, then the manager is evaluated on the basis of his own division's realized profits. If the division's message changes the coordinating decision, then the manager is evaluated on the basis of his division's realized profits less the reported impact of the change in coordinating decisions (resulting from his message) on the profits of the other divisions. It is shown that with this evaluation measure, a division manager is best off communicating truthfully, regardless of the messages of all others. The proposed control structure, therefore, provides an alternative to traditional profit-sharing. An application of the control structure to a resource allocation problem is also given.
Note—On Planning Freedom: Some Thoughts About the Ideas of Van Gigch
Authors: Nowakowska Maria
Published: November 2008

This Note is an attempt at showing how the problem of planning for freedom discussed in (Eilon, S. 1976. Planning and freedom. Editorial. OMEGA, Internal. J. Management Sci. 4 (5) 501–505; Singhal, K., V. Vyasulu. 1978. More on planning for freedom. Management Sci. 24 (5) 581–584; van Gigch, J. P. 1976. Planning for freedom. Management Sci. 22 949–961; van Gigch, J. P. 1977. A management science approach to planning freedom—A Rejoinder. OMEGA, Internal. J. Management Sci. 5 (1)) can be formalized in terms of so-called “freedom functions” which express the distribution of rights in a society. It is argued that the approach analogous to that used in Arrow's Impossibility Theorem for social welfare functions would require determining first the class of all feasible freedom functions.
The Computation of Optimal Control Limits for a Queue with Batch Services
Authors: Weiss Howard J.
Published: November 2008

We study the optimal control of a queueing system with Poisson input and a server capable of serving an infinite number of customers per batch. It is known that the optimal type of control policy is a control limit policy: service should begin if and only if the number of waiting customers is at least as large as some control limit. Our objective is to find the control limit that minimizes the long run average cost of waiting and service charges. We determine the cost as a function of the control limit, present properties of the cost function and optimal control limit, present easily computable upper and lower bounds for the optimal control limit and an algorithm for finding the optimal control limit.
Cluster Analysis: An Application of Lagrangian Relaxation
Authors: Mulvey John M. , Crowder Harlan P.
Published: November 2008

This paper presents and tests an effective optimization algorithm for clustering homogeneous data. The algorithm iteratively employs a subgradient method for determining lower bounds and a simple search procedure for determining upper bounds. The overall objective is to assign n objects to m mutually exclusive “clusters” such that the sum of the distances from each object to a designated cluster median is minimum. The model represents a special case of the uncapacitated facility location and m-median problems. This technique has proven efficient for examples with n ≤ 200 (i.e., the number of 0-1 variables ≤ 40,000); computational experiences with 10 real-world clustering applications are provided. A comparison with a hierarchical agglomerative heuristic, the minimum squared error method, is included. It is shown that the optimization algorithm is an effective solution technique for the homogeneous clustering problem, and also a good method for providing tight lower bounds for evaluating the quality of solutions generated by other procedures.
An Inventory Model with Full Load Ordering
Authors: Iwaniec Katarzyna
Published: November 2008

We consider a discrete review, single product, dynamic inventory model with stochastic demands. The ordering cost is assumed to consist of a linear purchase cost and a cost K for each vehicle used. We examine the simple policy: “If the stock level at the beginning of period n does not exceed some critical number Tn, order the smallest number of full vehicle loads which will raise the inventory level just above Tn. If the stock level is above Tn do not order.” Conditions ensuring that this full load ordering rule minimizes total expected cost are given. We prove that the sequence of critical numbers T1, T2, … is bounded and nondecreasing and we find a limiting value T that characterizes an optimal infinite horizon policy. The conditions include typical assumptions, such as the convexity and differentiability of the expected one period holding and shortage cost. The most interesting condition involves the variation in the demand distribution over intervals of length equal to the vehicle capacity. As one would expect, it is satisfied if capacity is small or K is large. The case of exponential demand and linear holding and shortage costs is treated. In this situation, the conditions are easy to check and T is found explicitly.
Comparing Probability Measures on a Set with an Intransitive Preference Relation
Authors: Whitt Ward
Published: November 2008

Recently Fishburn (Fishburn, P. C. 1978. Stochastic dominance without transitive preferences. Management Sci. 24 1268–1277.) proposed a definition of stochastic dominance for probability measures defined on a set with an intransitive preference-or-indifference relation. A significant feature of Fishburn's definition is that the stochastic dominance relation inherits the intransitivity. We propose several alternative definitions of stochastic dominance that are transitive even though the preference relation on the underlying sample space is not. The basic idea is to use ordinary first-order stochastic dominance after appropriately transforming the intransitive relation into a transitive relation. As extreme cases or bounds, strong (weak) stochastic dominance is defined to be ordinary stochastic dominance for probability measures defined on the same set after the intransitive relation is replaced by the transitive relation obtained by regarding any two alternatives that were connected by an intransitive cycle as noncomparable (equivalent). Fishburn's definition is shown to be included within these bounds.
Assessing Project Implementation Risk: A Methodological Approach
Authors: Anderson John , Narasimhan Ram
Published: November 2008

Successful implementation of OR/MS is increasingly becoming a concern of researchers and practitioners in the field. Research efforts to date have resulted in various conceptual models of the implementation process. While offering general insight, these conceptual models provide little assistance to an OR/MS implementor in managing the implementation process or more specifically assessing the nature and extent and resolving implementation problems. This paper proposes a project-risk assessment methodology which could assist the OR/MS implementor in this determination, pointing out the need for development of relevant implementation strategies directed at increasing the chances of successful implementation. Specifically, the methodology involves the use of a discriminant function to: (1) identify high, marginal, or low risk implementation situations; and (2) point out particular “risk factors” that reduce the chances of successful implementation. The paper emphasizes that knowledge of the risk factors specific to an implementation situation is essential for developing relevant strategies to mitigate their influence. It is suggested that the search for viable implementation strategies by the OR/MS implementor would lead to selective review of existing theories of implementation and their use. An illustration of the proposed methodology is provided by the development and use of a discriminant function based on case study data.
Aggregation and Proration in Forecasting
Authors: Shlifer E. , Wolff R. W.
Published: November 2008

Conditions are determined under which (a) the sum of forecasts of sales in market segments is preferred to a forecast of the whole market and (b) a forecast of an individual market segment is preferred to a forecast obtained through proration of a forecast of the whole market. The comparisons in (a) and (b) are also applied to the problem of forecasting for several time periods into the future.
Note—Computation of Particular Economic Equilibria
Authors: Bracken Jerome , Falk James E.
Published: November 2008

The computation of economic equilibria, given specific supply and demand functions, is a well-established problem normally treated by fixed point methods or other iterative schemes which converge to a point satisfying the equilibrium criteria. In cases where there are several points which satisfy the equilibrium criteria, these methods will produce a solution distinguished only by the characteristics of the method itself and the starting point used.

For some applications, it is desirable to characterize a particular equilibrium point in the presence of multiple equilibria. We consider here economies with demand and supply characteristics which can be described in terms of separable functions (i.e., functions which are sums of functions, each of a single variable) or in terms of functions which can be made separable by introducing new variables and equations. We apply a recently developed branch and bound algorithm to the problem of maximizing any one of several separable objective functions subject to the equilibrium criteria, thus producing a particular equilibrium point. If there is more than one equilibrium point solution for a particular objective function, the branch and bound procedure will produce all such solutions.

We present an example with three commodities to show that economic equilibrium models can have different solutions depending on which objective function is used. We briefly discuss other examples with up to 30 commodities.
The Beta Distribution as a Model of Behavior in Consumer Goods Markets
Authors: Stewart John F.
Published: November 2008

Loyalty in branded consumer goods markets is a subject that has often been discussed in the marketing literature. Virtually no matter what definition of loyalty has been adopted, it has been found to exist. This paper examines loyalty from a different perspective—that of an aggregation of consumers' probabilities of purchasing a particular brand, called the loyalty distribution. Loyalty in this context implies that most consumers should either have high probabilities of purchasing the brand or high probabilities of purchasing one of the competitive brands; few consumers have equally likely probabilities of purchasing the brands in a market. Another way of stating the point is that the majority of consumers are loyal and tend to repeat purchase their favorite brand while few are nonloyal and tend to switch back and forth.

The Beta distribution is examined as a model of the loyalty distribution. It is demonstrated that, if this distribution is a good model for the underlying process, it is possible to define, in terms of brand share and repeat, the conditions under which the loyalty distribution will assume each of its possible shapes. Since the U or J shape is consistent with loyalty in consumer goods markets, the requirements for this shape are emphasized. It is shown, in particular, that, in order to maintain one of these shapes, a brand must have a greater percent of its share accounted for by repeat purchasing the larger its share of market.

A model of switching and repeat based on the Beta is explored and a number of examples of the characteristics of the model in different markets are worked out. Maximum switching is shown to occur in markets with equal share brands, i.e., maximum entropy markets. Total switching is shown to increase at a decreasing rate as the number of brands in the market increases.

Finally, a number of areas for further research are suggested. The model developed has barely scratched the surface of its potential.
Worst-Case Analysis of Heuristic Algorithms
Authors: Fisher Marshall L.
Published: November 2008

The increased focus on heuristics for the approximate solution of integer programs has led to more sophisticated analysis methods for studying their performance. This paper is concerned with the worst-case approach to the analysis of heuristic performance. A worst-case study establishes the maximum deviation from optimality that can occur when a specified heuristic is applied within a given problem class. This is an important piece of information that can be combined with empirical testing and other analyses to provide a more complete evaluation of a heuristic. In this paper the basic ground rules of worst-case analysis of heuristics are reviewed, and a large variety of the existing types of worst-case results are described in terms of the knapsack problem. A selected sample of results for four other problems is given. The paper concludes with a discussion of possibilities for further research.
Reply to Farris and Buzzell's Comment on ADVISOR 2 Paper
Authors: Lilien Gary L.
Published: November 2008

Farris and Buzzell's (Farris, Paul W., Robert D. Buzzell. A comment on modeling the marketing mix decision for industrial products. Management Sci. this issue.) comment on my (Liuen, Gary L. 1979. ADVISOR 2: Modeling the marketing mix decision for industrial products. Management Sci. 25 191–204.) paper on the ADVISOR studies and its relationship to their work with the PIMS data calls for clarification of the methodology, objectives and results of both studies. We will show that the ADVISOR models present strong evidence in favor of a descriptive model of advertising/sales expenditures that is not constant with the dollar level of sales. This directly addresses the contention by Farris and Buzzell that modeling the A/S ratio as a constant is theoretically and empirically valid. We then explore some of the differences between the Farris-Buzzell analyses and ADVISOR that are important in understanding where and why the results differ. Next we elaborate on some of the validation analyses done for ADVISOR. Finally, we discuss in more detail the reasons for handling product profitability through a variable called product plans in the ADVISOR model.
A Longitudinal Model to Decompose the Effects of an Advertising Stimulus on Family Consumption
Authors: Winer Russell S.
Published: November 2008

A general model describing individual consuming unit response to an advertising stimulus is developed. The measure of behavior utilized is consumption. In the model, the various effects of advertising on behavior are decomposed. These are price-advertising interactions, transitory or short-run effects, and permanent or long-term effects. Specific parameterized forms of the model demonstrate how alternative theories of the effects of advertising can be tested.
Pivot and Complement–A Heuristic for 0-1 Programming
Authors: Balas Egon , Martin Clarence H.
Published: November 2008

Pivot and Complement is a heuristic for finding approximate solutions to 0-1 programming problems. It uses the fact that a 0-1 program is equivalent to the associated linear program with the added requirement that all slack variables, other than those in the upper bounding constraints, be basic. The procedure starts by solving the linear program; then performs a sequence of pivots aimed at putting all slacks into the basis at a minimal cost; finally, it attempts to improve the 0-1 solution obtained in this way by a local search based on complementing certain sets of 0-1 variables. The computational effort involved in the procedure is bounded by a polynomial in the number of constraints and variables. For the 92 test problems with 5 to 200 constraints and 20 to 900 variables on which the procedure was run, the time used to solve the linear program on the average considerably exceeded the time used for everything else. As to the quality of the solutions obtained, in 45 cases, or 49% of the total, the procedure found an optimal solution; for the capital budgeting problems (positive coefficients everywhere), the solution found was on the average within 0.15% of the optimum; for 81 of the 92 problems, it was within 1% of the optimum; and only in 1 case did the procedure not find a feasible solution.
Long-Term Dependence and Least Squares Regression in Investment Analysis
Authors: Greene Myron T. , Fielitz Bruce D.
Published: November 2008

It is widely assumed that common stock returns approximate a random walk, i.e., the returns are assumed to be serially independent. As a consequence, estimates of systematic risk and efficient portfolios are usually developed using any convenient differencing interval with the implication that they are applicable to any investor regardless of his horizon period. This paper derives the relationships between least-squares estimators and the differencing interval in the presence of long-term dependence. These relationships are then used to show how long-term dependence affects estimates of systematic risk and efficient portfolios selected with the Sharpe index model. The major implication is that, because of long-term dependence, systematic risk estimates and efficient portfolios must be developed using a differencing interval exactly equal to the investor's horizon period.
Note—Planning for Industrial Estate Development in a Developing Economy
Authors: Fong C. O.
Published: November 2008

Since the early 1970s, it has been realized that rapid economic development in developing countries leads to an acute inequality in income distribution. To prevent massive dissatisfaction among their citizens, developing countries were urged to achieve economic growth (particularly industrial growth) with distribution of income as their development goal. A good way of promoting growth and dispersal of industrial activities is the establishment of industrial estates in the locations where such activities are desired. This paper formulates the problem of optimal development of industrial estates, with the incorporation of specified minimum levels of development in poverty (priority) sites as distributive targets, as encountered by a Malaysian state government. The linear programming problem so formulated is then shown to be equivalent to a transportation problem, enabling it to be solved and parametically analyzed efficiently. Computational results, obtained using real-life data, show that the subsidy incurred in fulfilling the distributive targets is small compared to the total revenue generated. This justifies the imposition of the distributive targets on the development process. Further, the optimal policy was found to involve decisions to be taken in the initial years of the planning horizon that are fairly insensitive to variation in demand and cost parameters, thereby demonstrating the relative “goodness” of the optimal policy for industrial estate development in the state.
Manpower Flows and the Innovation Process
Authors: Ettlie John E.
Published: November 2008

A model of the causes and impacts of manpower flows in the innovation process is developed in this paper. A review of some of the relevant literature and discussion of several case studies of manpower flows are presented. Some preliminary results are reported and emergent propositions and future research needs are discussed. One promising area of exploration appears to be the relationship between information flows, manpower flows, and importance of the innovation (radical vs. incremental) under consideration. Some implications for the management of technological change in organizations are discussed.