bluuebunny/crossref_metadata_2025 huggingface dataset:
A Minimum Variance Result in Continuous Trading Portfolio Optimization
Authors: Richardson Henry R.
Published: November 2008

The problem of minimizing the variance of discounted wealth at the end of a fixed period is solved when the expectation of terminal wealth is constrained to a specified investment goal. The results are obtained in a continuous trading framework under the assumption that the funds can be exchanged between a riskless bond and a stock whose discounted price is described by a geometric Brownian motion. Transaction costs are ignored (i.e., the market is “frictionless”) and unlimited borrowing is permitted at the same rate as the return on the bond. Typically the optimal trading policy under the above assumptions involves a highly leveraged investment in the stock in the early stages followed by an accumulation of the bond in the later stages. Numerical results are provided as an illustration of the theory.
Evaluation of Aggregate and Individual Forecast Method Selection Rules
Authors: Fildes Robert
Published: November 2008

A major use of univariate forecasting methods lies in production control where there is a large number of series to be forecast. The appropriate choice of forecasting method has the potential for major cost savings through improved accuracy. Where a new method is to be compared to one already established two distinct approaches to selecting between the two can be considered: aggregate selection, where a single method is applied to all the time series, versus individual selection, where the particular method appropriate for each series is identified and used to forecast future observations for that series. This paper evaluates these two selection rules using 263 data series from a single organization. The results show the potential of “individual selection” and also the difficulty of attaining it. For short lead times “aggregate selection” achieves similar accuracy. For longer leads it is outperformed by “individual selection” and also undermined by sampling variability. As a consequence, “aggregate selection” must be carried out across a wide cross-section of series and across time. When this is done the results of this case study show that “aggregate selection” is both simpler than and of comparable accuracy to “individual selection.”
The Impact of Clustered Defect Distributions in IC Fabrication
Authors: Albin Susan L. , Friedman David J.
Published: November 2008

Whenever defect data is encountered in industrial quality control applications, the Poisson distribution is generally assumed to be the underlying distribution. It has been widely reported that the defect distributions in integrated circuit fabrication exhibit clustering behavior, a condition which invalidates the Poisson distribution assumption. In this paper we employ an alternative model for defect data that exhibits clustering. To demonstrate the impact of the proposed model, we use it to design acceptance sampling plans and show a dramatic difference between these plans and those determined under the Poisson distribution assumption. Although advances in quality control and techniques such as design for manufacture have eliminated the need for acceptance sampling in many areas, integrated circuit fabrication still involves processes with high variability (even using state of the art equipment). Thus acceptance sampling is widely used at various stages of manufacture to insure specified quality levels when 100 percent inspection is infeasible.
Kanban Controlled Pull Systems: An Analytic Approach
Authors: Deleersnyder Jean-Luc , Hodgson Thom J. , Muller-Malek Henri , O'Grady Peter J.
Published: November 2008

Three problem areas exist in designing and implementing a kanban controlled JIT system: the identification of flow lines problem, the flow line loading problem and the operational control problem. This paper addresses the operational control problem. A general N-stage serial production system is modeled as a discrete time Markov process. Capacity constraints, stochastic machine reliability and demand variability are included. The model is illustrated by a 3-stage system, describing the effects of the number of kanbans, the machine reliability, the demand variability and safety stock requirements on the performance of a kanban controlled pull system.
A Dynamic Programming Approach to a Class of Nonpoint Source Pollution Control Problems
Authors: Bouzaher Aziz , Braden John B. , Johnson Gary V.
Published: November 2008

This paper presents a new approach to modeling, analyzing, and solving a class of environmental control problems dealing with sediment deposition. An efficient dynamic programming algorithm is designed to handle the spatial characteristics of soil movement through a watershed, and its ultimate impact on water channels and/or reservoirs. The model generates “sediment abatement cost frontiers” which summarize the trade-off information needed for watershed planning and management. This information can also be used to identify and target special-problem areas. The paper presents both results on the efficiency of the DP algorithm compared to other methods, and results on the application of the model to real world cases.
The Effect of Information Sources and Communication Channels on the diffusion of Innovation in a Data Base Development Environment
Authors: Nilakanta Sree , Scamell Richard W.
Published: November 2008

Increasing importance of emerging information technology, especially the data base component, has prompted the examination of the process of diffusion of innovations in the context of data base system development. This paper (1) examines the extent to which information sources and communication channels facilitate the diffusion of data base design tools and techniques, (2) studies how different information sources and communication channels influence diffusion and (3) assesses whether data base design tools and techniques applicable to the different stages of system development are diffused at different rates. In facilitating the diffusion of data base design tools and techniques, organizational resources such as information sources, communication channels and a technical support function are found to influence only certain classes of these innovations.
Interactive Multiobjective Optimization Under Uncertainty
Authors: Klein G. , Moskowitz H. , Ravindran A.
Published: November 2008

Uncertainty presents unique difficulties in multiobjective optimization problems, because decision makers are faced with risky situations requiring analysis of multiple outcomes in differing states of nature. Very few direct choice (interactive) multiobjective methods are capable of addressing problems with probabilistic outcomes. We thus propose a general multiobjective algorithm which accommodates uncertainty. The method is appropriate for use in a multiple criteria framework with a discrete number of states of nature. Without loss of generality, and in the interest of simplicity of exposition, our method is explored and developed in the context of a bicriterion optimization problem using a two stage mathematical programming model. Simulation and behavioral experiments are conducted which verify that the method is viable for problems with greater dimensionality.
Entrepreneurial Ability, Venture Investments, and Risk Sharing
Authors: Amit Raphael , Glosten Lawrence , Muller Eitan
Published: November 2008

A number of issues that relate to the desirability and implications of new venture financing are examined within a principal-agent framework that captures the essence of the relationship between entrepreneurs and venture capitalists. The model suggests: (1) As long as the skill levels of entrepreneurs are common knowledge, all will choose to involve venture capital investors, since the risk sharing provided by outside participation dominates the agency relationship that is created. (2) The less able entrepreneurs will choose to involve venture capitalists, whereas the more profitable ventures will be developed without external participation because of the adverse selection problem associated with asymmetric information. (3) If a costly signal is available that conveys the entrepreneur's ability, some entrepreneurs will invest in such a signal and then sell to investors; these entrepreneurs, however, need not be the more able ones. The implications for new venture financing of these and other findings are discussed and illustrated by example.
Product Innovation and Start-Up Business Market Share Performance
Authors: Robinson William T.
Published: November 2008

This empirical study estimates the impact of several product innovation attributes on initial market share. We find that the product's advantage relative to competing products has the strongest market share impact. Incompatibility with customers' existing way of doing things does not have a meaningful market share impact. By reducing market share, a new and proprietary product technology tends to act as a barrier to adoption, unless the effect is offset by a major product advantage.
A Quantitative Analysis of U.S. and Japanese Practice and Performance in Software Development
Authors: Cusumano Michael A. , Kemerer Chris F.
Published: November 2008

Since the early 1980s, there has been a mounting debate in industry literature and in U.S. government-sponsored reports over the relative performance of software developers in Japan versus those in the United States. This literature is somewhat divided between assertions of Japanese or U.S. superiority in this technology, although many observers in the popular business press continue to insist that the U.S. maintains an overwhelming lead in this technology. However, both sides of the debate have offered evidence that, to date, has been primarily qualitative or based on one or two cases.

This paper contributes to the debate in two ways. First, it offers a comprehensive literature review that analyzes existing comparisons of Japanese and U.S. practice in software development and summarizes the major proposed differences in performance. Second, it presents the first set of quantitative data collected from a statistically comparable sample of 24 U.S. and 16 Japanese software-development projects, and uses these data to test propositions from the literature. The analyses indicate that Japanese software projects perform at least as well as their U.S. counterparts in basic measures of productivity, quality (defects), and reuse of software code. The data also make it possible to offer models that explain some of the differences in productivity and quality among projects in both countries.
Reducing Separable Convex Programs with Tree Constraints
Authors: Tang Christopher S.
Published: November 2008

This paper describes a class of separable convex programs with tree constraints that has applications in production planning, quality improvement, and other related areas. A reduction procedure is presented for solving this class of separable convex programs with N variables. This reduction procedure determines an optimal solution to the convex problem by solving at most 2N simple convex subproblems with one variable. Hence, this reduction procedure is an efficient approach for solving large scale convex programs of this sort.
Heuristics for Product-Line Design Using Conjoint Analysis
Authors: Kohli Rajeev , Sukumar R.
Published: November 2008

Recently proposed methods for product-line selection use the total utilities of candidate items to construct product lines maximizing seller's return or buyers' welfare. For conjoint (hybrid conjoint) data, enumerating the utilities of candidate items can be computationally infeasible if the number of attributes and attribute levels is large and most multi-attribute alternatives are feasible. For such problems, constructing product lines directly from part-worths data is preferable. We propose such methods, extending Kohli and Krishnamurti's (1987) dynamic-programming heuristic for selecting a single item maximizing share to structure product lines maximizing share, seller's return, or buyers' (utilitarian) welfare. The computational performance of the heuristics and their approximation of product-line solutions is evaluated using simulated data. Across problem instances, the dynamic-programming heuristics identify solutions that are no worse, in terms of approximating optimal solutions, to the solutions of heuristics for the current two-step approaches to product-line design. An application using hybrid-conjoint data for a consumer-durable product is described.
Structured Prescriptive Models of Risk Attitudes
Authors: Harvey Charles M.
Published: November 2008

This paper discusses conditions on risk attitudes that imply special types of expected-utility functions. First, conditions are described that correspond to different choices of an arithmetic operation that measures the importance of changes in consequences. Second, conditions are described such that one consequence in a pair of indifferent lotteries depends linearly on a consequence in the other lottery. Procedures are described for using one of the conditions to model the risk attitude of a public or private decision making group without performing the detailed preference assessments that are needed to determine a general utility function.
The Impact of Uncertainty on a Production Line
Authors: Tang Christopher S.
Published: November 2008

This paper presents a discrete time model of a multi-stage production system that faces two major types of uncertainties: the output rate at each production stage and the demand for the finished product. Our goal is to analyze the impact of these uncertainties on the production level and on the inventory level at each stage in order to provide insights for production planning, inventory control, quality improvement, and capacity planning. We propose a scheme in which a complex production rule is approximated by a linear production rule (that follows the “restoration” concept introduced by Denardo and Tang 1988). This linear production rule leads the system to steady state in which the means and the variances of the production and inventory levels can be expressed in closed form. These closed form expressions enable us to develop a simple approach for determining a “good” production rule and for analyzing the impact of increasing the yield rates and reducing the variance of the demand. The goodness of this approximation scheme is illustrated by an example.
Analysis of a Kanban Discipline for Cell Coordination in Production Lines. I
Authors: Mitra Debasis , Mitrani Isi
Published: November 2008

We describe and analyze a discipline called kanban for the coordination of cells in a large-scale manufacturing facility. There are many cells in a tandem configuration and a fixed number of cards (or kanbans in Japanese usage) in each cell. The cards circulate within the cell and their presence at designated positions signals to the neighboring cells the status of the cell's inventory; rules specify the timing of the movement of parts from cell to cell. We construct a stochastic model of the whole manufacturing facility and give our results in three parts. First, the kanban discipline is compared to the classical production discipline and it is shown to dominate the classical discipline in terms of throughput. Secondly, we give a scheme for analyzing approximately the performance of the kanban system by examining first a single cell in isolation and then combining the isolated cells through fixed-point equations. Thirdly, we report on extensive experiments and on their numerical results which are obtained from simulations and our method of analysis. The throughput-inventory relationship of the kanban scheme is observed to be superior to that of the classical discipline.
Scheduling the Production of Several Items with Random Demands in a Single Facility
Authors: Gallego Guillermo
Published: November 2008

Consider the problem of scheduling the production of several items in a single facility that can produce only one item at a time. This problem occurs since it is often economic to produce several items in a single facility. The objective is to reduce the long run average holding, backorder and setup costs.

We assume that demands are random with constant expected rates. We allow backorders and charge holding and backlogging costs at linear time weighted rates. Items are produced at continuous constant rates. Setup times and setup costs are item dependent constants. These parameters, however, are independent of the order of setups.

A real-time scheduling tool is developed in three steps. First, with demands replaced by their expectations, we compute an optimal or near-optimal target cyclic schedule. Next, we study the problem of scheduling the facility after a single disruption perturbs the inventories. The goal is to recover the target cyclic schedule at minimal excess over the average cost of the cyclic schedule. We formulate this as a control problem and obtain a linear recovery policy that is optimal for a large configuration of disruptions. Finally, we select safety stocks to minimize the long run average cost of following the target schedule with the recovery policy. We show that optimal safety stocks are unique and have the property that in the long run the proportion of time that an item is in stock is the ratio of backorder to holding plus backorder cost. We present an example that integrates the cyclic schedule, the control policy and the safety stocks.
Optimal Bundle Pricing
Authors: Hanson Ward , Martin R. Kipp
Published: November 2008

Bundle pricing is a widespread phenomenon. However, despite its importance as a pricing tool, surprisingly little is known about how to find optimal bundle prices. Most discussions in the literature are restricted to only two components, and even in this case no algorithm is given for setting prices. Here we show that the single firm bundle pricing problem is naturally viewed as a disjunctive program which is formulated as a mixed integer linear program. Multiple components, and a variety of cost and reservation price conditions are investigated with this approach. Several new economic insights on the role and effectiveness of bundling are presented. An added benefit of the solution to the bundle pricing model is the selection of products which compose the firm's product line. Computational testing is done on problems with up to 21 components (over one million potential product bundles), and data collection issues are addressed.
Confidence Interval Estimation for the Variance Parameter of Stationary Processes
Authors: Chen Bor-Chung , Sargent Robert G.
Published: November 2008

Asymptotic confidence interval estimators of the variance parameter σ2 = limn → ∞ n Var((1/n) ∑ni = 1 Xi) are described in this paper for observations X1, X2,…,Xn from a strictly stationary phi-mixing stochastic process. They are based on asymptotic properties of the standardized time series of observations from the process. The new point and interval estimators for the variance parameter are compared to the classical batch means estimator. The results show that the new estimators have asymptotic properties that clearly dominate the classical estimator. Also, asymptotic confidence interval estimators for the ratio of two variance parameters representing two independent processes are discussed.
Remarks on the Analytic Hierarchy Process
Authors: Dyer James S.
Published: November 2008

The analytic hierarchy process (AHP) is flawed as a procedure for ranking alternatives in that the rankings produced by this procedure are arbitrary. This paper provides a brief review of several areas of operational difficulty with the AHP, and then focuses on the arbitrary rankings that occur when the principle of hierarchic composition is assumed. This principle requires that the weights on the higher levels of a hierarchy can be determined independently of the weights on the lower levels. Virtually all of the published examples of the use of the AHP to evaluate alternatives relative to a set of criteria have assumed this principle. The key to correcting this flaw is the synthesis of the AHP with the concepts of multiattribute utility theory.
The Effects of Brand Loyalty on Competitive Price Promotional Strategies
Authors: Raju Jagmohan S. , Srinivasan V. , Lal Rajiv
Published: November 2008

This paper analyzes the role played by brand loyalty in determining optimal price promotional strategies used by firms in a competitive setting. (Loyalty is operationalized as the minimum price differential needed before consumers who prefer one brand switch to another brand.) Our objective is to examine how loyalties toward the competing brands influence whether or not firms would use price promotions in a product category. We also examine how loyalty differences lead to variations in the depth and frequency with which price discounts are offered across brands in the same product category.

The analysis predicts that a brand's likelihood of using price promotions increases with an increase in the number of competing brands in a product category. In the context of a market in which a brand with a large brand loyalty competes with a brand with a low brand loyalty, it is shown that in equilibrium, the stronger brand (i.e., the brand with the larger loyalty) promotes less frequently than the weaker brand. The results suggest that the weaker brand gains more from price promotions. The analysis helps us understand discounting patterns in markets where store brands, weak national brands, or newly introduced national brands compete against strong, well known, national brands. The findings are based on the unique perfect equilibrium in a finitely repeated game. The predictions of the model are compared with the data on 27 different product categories. The data are consistent with the main findings of the model.
A Stochastic Sequencing Problem for Style Goods with Forecast Revisions and Hierarchical Structure
Authors: Matsuo Hirofumi
Published: November 2008

This paper addresses the problem of simultaneously determining a production sequence and production volumes of style goods. Style goods have one selling season per year. During the rest of the year, manufacturers of style goods build up the inventory while continuously reestimating the demand in the final selling season. In this problem, products have a two-stage hierarchy: items and families. The production of a family is assumed to be nonpreemptive. Exploiting the hierarchical structure, we formulate the problem as a two-stage stochastic sequencing problem: the stochastic aggregate sequencing problem and the stochastic disaggregation problem. To solve the stochastic aggregate sequencing problem, a simple heuristic solution procedure is developed that accounts for the forecast revisions and provides a lower bound on the optimal value. The heuristic is tested using the disguised data obtained from a consumer electronics company. The computational results demonstrate the applicability of the proposed procedure.
Goal Setting for Effective Corporate Planning
Authors: Guerard John B. , Bean Alden S. , Stone Bernell K.
Published: November 2008

The hypothesis that firms simultaneously determine their research and development, investment, dividend, and new debt policies generally is substantiated in the financial literature. The strategic planning model advocated in this study offers an alternative to the generally accepted goals of maximizing the return on equity or growth in earnings per share.
Optimal Centralized Ordering Policies in Multi-Echelon Inventory Systems with Correlated Demands
Authors: Erkip Nesim , Hausman Warren H. , Nahmias Steven
Published: November 2008

This paper treats a depot-warehouse system in which demand occurs at the warehouse or retail level. This work differs from a number of other studies in that we allow item demands to be correlated both across warehouses and also correlated in time. Our motivation for this generalization arises from our experience with an actual system of this type used by a major national producer and distributor of consumer products. We observed both high correlations between successive monthly demands (around 0.7) and correlations between demands for an item at different locations (also about 0.7) in a given time period. We derive an explicit expression for the optimal safety stock as a function of the level of correlation through time. The analysis requires two assumptions: 1) the allocation assumption and 2) the equal coefficient of variation assumption. (Similar assumptions have been used by other researchers.) Finally, numerical evaluations are included to illustrate the impact of the various magnitudes of correlation.
Prelaunch Forecasting of New Automobiles
Authors: Urban Glen L. , Hauser John R. , Roberts John H.
Published: November 2008

This paper develops and applies a prelaunch model and measurement system to the marketing planning of a new automobile. The analysis addresses active search by consumers, dealer visits, word-of-mouth communication, magazine reviews, and production constraints—issues that are important in understanding consumer response to durable goods. We address these issues with a detailed consumer flow model which monitors and projects key consumer transitions in response to marketing actions. A test-vs.-control consumer clinic provides data which, with judgment and previous experience, are used to “calibrate” the model to fit the sales history of the control car. We illustrate how the model evolved to meet management needs and provided suggestions on advertising, dealer training, and consumer incentives. Comparison of the model's predictions to actual sales data suggests reasonable accuracy when an implemented strategy matches the planned strategy.
Optimal Investment in Product-Flexible Manufacturing Capacity
Authors: Fine Charles H. , Freund Robert M.
Published: November 2008

This paper presents a model and an analysis of the cost-flexibility tradeoffs involved in investing in product-flexible manufacturing capacity. Flexible capacity provides a firm with the ability to respond to a wide variety of future demand outcomes, but at the expense of the increased cost of acquiring flexible manufacturing capacity, as compared with dedicated or nonflexible capacity. We formulate the product-flexible manufacturing capacity investment decision as a two-stage stochastic program. In the first stage, the firm must make its investment decision in manufacturing capacity, before the resolution of uncertainty in product demand. In the second stage, after demand for products are known, the firm implements its production decisions, constrained by the first-stage investments.

The main contributions of this paper are threefold. First, we develop a model of the firm's flexible manufacturing investment decision that conceptually captures some of the key characteristics of this complex decision problem. Second, with the aid of the model, we characterize the necessary and sufficient conditions for a firm to invest in flexible capacity to protect efficiently against uncertainty in demand for all of its products. Third, we explore the sensitivity of the firm's optimal capacity investment decision to key problem components, namely to the cost of flexible and nonflexible production capacity, to the underlying distribution of product demand, and to the level of risk.
Foreign Market Entry: Production-Related Strategies
Authors: Tang Ming-Je , Yu Chwo-Ming Joseph
Published: November 2008

This paper examines the profit to a firm of different production-related strategies for entering a foreign market. The entry strategies examined are foreign direct investment, exclusive licensing, multiple licensing, joint venture, and a combination of joint venture and licensing. It is shown that even though the entering firm is able to charge the optimal licensing fee, foreign direct investment generates the highest profit and is thus the dominant entry strategy in many contexts. This paper also suggests counter-strategies for responding to government restrictions on firms' entry.
Evaluating Forecast Performance in an Inventory Control System
Authors: Gardner Everette S.
Published: November 2008

This paper analyzes the impact of forecasting on inventory decisions in a large physical distribution system. Alternative forecasting models are evaluated by developing tradeoff curves between inventory investment and customer service. The results demonstrate that the choice of forecasting model is an important factor in determining the amount of investment needed to support any target level of customer service.
Optimal Price Skimming by a Monopolist Facing Rational Consumers
Authors: Besanko David , Winston Wayne L.
Published: November 2008

This paper considers the intertemporal pricing problem for a monopolist marketing a new product. The key feature differentiating this paper from the extant management science literature on intertemporal pricing is the assumption that consumers are intertemporal utility maximizers. A subgame perfect Nash equilibrium pricing policy is characterized and shown to involve intertemporal price discrimination. We compare this policy to the optimal policy for a monopolist facing myopic consumers and find that for any given state, prices are always lower with rational consumers than with myopic consumers. For plausible parameter values the assumption of consumer rationality can be shown to lead to large differences in optimal prices. Moreover, if a monopolist facing rational consumers implements the optimal myopic consumer pricing policy, profits can be significantly less than if the monopolist follows the equilibrium pricing policy for rational consumers.
Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice
Authors: Thaler Richard H. , Johnson Eric J.
Published: November 2008

How is risk-taking affected by prior gains and losses? While normative theory implores decision makers to only consider incremental outcomes, real decision makers are influenced by prior outcomes. We first consider how prior outcomes are combined with the potential payoffs offered by current choices. We propose an editing rule to describe how decision makers frame such problems. We also present data from real money experiments supporting a “house money effect” (increased risk seeking in the presence of a prior gain) and “break-even effects” (in the presence of prior losses, outcomes which offer a chance to break even are especially attractive).
User Satisfaction with Computer-Mediated Communication Systems
Authors: Hiltz Starr Roxanne , Johnson Kenneth
Published: November 2008

Interactive computer systems should be viewed as “socio-technical” systems whose acceptance is influenced by an interaction among characteristics of the individual users, the groups and organizations in which they are implemented, and the computer systems themselves. Four months after completing baseline questionnaires, new users of four computer-mediated communication systems (CMCS) answered follow-up questionnaires which included a number of items measuring subjective satisfaction. Factor analysis identified two primarily instrumental dimensions (satisfaction with the Interface and with system Performance), and two primarily social-emotional dimensions (Unexpressive—perceived inadequacy of the system for expressive, emotional, or personal communication—and Mode Problems with computer-mediated communication). The strongest correlates of Interface satisfaction are differences in system software and documentation, interacting with baseline attitudes and characteristics of the individual users. By contrast, the strongest correlates of the Unexpressive factor include such group-level variables as frequency of previous (off-line) communication with the group, and attitudes towards the group task. Thus to insure a successful implementation, managers must consider the “fit” between a CMCS and a particular work group.
Market Share Pioneering Advantage: A Theoretical Approach
Authors: Fershtman Chaim , Mahajan Vijay , Muller Eitan
Published: November 2008

In this paper we present an industry in which a pioneer has entered, accumulated capital in the form of goodwill, and in his monopoly period has also reduced his cost of production as a result of some form of learning by doing. At some later date a newcomer enters. His production cost is higher than that of the monopolist at that date. However due to diffusion of information, the costs of the two firms equate at some future date.

Once the new firm enters the market a duopolistic game begins in which the firms choose prices and investment rates. Analyzing this game we discover the conditions under which the final market shares no longer depend on the order of entry, the initial cost advantage, the length of the monopoly period, or the length of time it took the newcomer to overcome the pioneer's cost advantage.

We analyze the speed and pattern of convergence to the final market shares and the capital path of the pioneer in his monopoly period, depending on his beliefs concerning the possibility of entry.
Shared Learning
Authors: Adler Paul S.
Published: November 2008

Total productivity learning curve results are reported for several departments of an electronic equipment manufacturer with plants in the U.S., Europe and Asia. These results were used to focus qualitative field investigations into the behavioral and cognitive determinants of considerable diversity across departments in learning curve parameters. The field investigation suggested that three forms of shared learning are critical to manufacturing productivity improvement: (1) sharing across the Development/Manufacturing interface, (2) sharing between the primary location and plants that started up later, and (3) the ongoing sharing among plants after start-up. Innovations in each of these three processes are identified and mapped onto Daft and Lengel's information uncertainty/equivocality matrix. Implications for the role of manufacturing engineering are identified.
Eliciting Public Values for Complex Policy Decisions
Authors: Keeney Ralph L. , von Winterfeldt Detlof , Eppel Thomas
Published: November 2008

Several approaches exist to illuminate and clarify public values relevant for making public policy decisions. These include surveys, indirect and direct value elicitation, focus groups and public involvement. This paper describes a new approach, called the public value forum, which combines elements of focus groups and direct multiattribute value elicitation techniques. Two public value forums were conducted with selected members of the West German public to elicit values relevant for setting long term energy policies. The purposes of conducting the value forums were to examine the feasibility of eliciting values from laypeople and combining them with factual assessments of experts, to determine the extent to which values elicited formally conflict with values elicited informally, and to assess the advantages and disadvantages of the public value forum. The results indicate that the public value forum is feasible, that the participants felt comfortable with the procedure and that they were eager to resolve inconsistencies between their intuitive judgments and the multiattribute models. There was substantial conflict between the formally and informally elicited values. However, the participants were able to resolve those conflicts in the course of the value forum, tending towards more moderate alternatives in the process. The public value forum provided useful information for the policy process and education for the participants. However, because it is expensive and time consuming, its main application may involve small samples of opinion leaders and stakeholder representatives, rather than large representative samples of the general public.
Combining Forecasts: Operational Adjustments to Theoretically Optimal Rules
Authors: Schmittlein David C. , Kim Jinho , Morrison Donald G.
Published: November 2008

Clemen and Winkler (1985) have described the theoretical effectiveness of Winkler's (1981) formula for optimally combining forecasts. The optimality of Winkler's formula is, however, contingent on actually knowing the forecasters' statistical properties, i.e., the variances and covariances of their forecasts. In realistic applications, of course, these properties have to be estimated, usually from a set of prior forecasts. In this case we show how the “operationally optimal” combining strategy differs from Winkler's “theoretically optimal” formula. Specifically, we provide figures indicating the operationally optimal strategy for combining two forecasts. We then propose a heuristic to choose the best set of parameter estimates in combining any number of forecasters and demonstrate its effectiveness via simulation.
Note—Gains from International Dual Listing
Authors: Yagil Joseph , Forshner Zivan
Published: November 2008

This study presents an attempt to explain how international dual listing of securities can reduce the effects of segmented international markets. By applying the mean-variance model we show that, for a return generating process given by the maximum distribution, the expected return on the dually listed security will be higher and the variance associated with it will be lower than for an otherwise identical (domestically) single listed security. This result appears to be consistent with the existence of dually listed securities in capital markets which are otherwise not integrated.
Final-Offer Arbitration Under Incomplete Information
Authors: Samuelson William F.
Published: November 2008

In recent years, final-offer arbitration (FOA) has become an increasingly frequent means of resolving labor disputes in the private and public sectors. The present paper models FOA when each disputant has private information bearing on the true value of the case. The model characterizes the disputants' equilibrium offer behavior and examines arbitration performance. The main conclusion is that FOA outcomes are crudely responsive to the underlying merits of the case. In its favor, FOA can be expected to be less costly to administer than arbitration procedures that attempt to extract perfect information.
Restructurable Representations of Negotiation
Authors: Kersten Gregory E. , Michalowski Wojtek , Szpakowicz Stan , Koperczak Zbig
Published: November 2008

The paper introduces restructurable modelling of negotiation aimed at supporting decision situations with an evolving structure. The theoretical framework of such models is presented by means of a rule-based formalism. This framework encompasses both qualitative and quantitative models, and the use of multiple procedures for solving the negotiation problem, adjusting the solution, and restructuring the problem representation. A hypothetical example of a house purchase is given to illustrate the discussion. The implications of the study for future directions of research on negotiation modelling and support are presented.
Information Technology for Negotiating Groups: Generating Options for Mutual Gain
Authors: Nunamaker J. F. , Dennis Alan R. , Valacich Joseph S. , Vogel Douglas R.
Published: November 2008

The study of negotiating groups, whether distributive between competing parties (i.e., “win-lose”) or integrative between essentially friendly parties from the same organization (i.e., “win-win”), remains important. While much previous research in this area has focused on key analytical issues such as evaluating proposed options, much less research has addressed the equally important initial stage of negotiation: generating options for mutual gain. In general, groups do this poorly, as there are many obstacles that inhibit successful option generation. Recent advances in computer technology provide additional approaches that can be used to support option generation as one component in an overall Negotiation Support System. This paper presents an integrated series of laboratory and field studies that investigated various aspects of computer-supported option generation for groups that meet at the same place and time. The use of anonymity to separate personalities from the issues and promote more objective evaluation was found to improve option generation in some circumstances, particularly those with increased criticalness and/or power differences among the participants. Larger groups were found to be more effective than smaller groups, several smaller groups combined, and nominal groups. We present several implications for theory development and system design and use, as well as a tentative model for computer-supported group option generation.
Computer Support of Groups: Theory-Based Models for GDSS Research
Authors: Rao V. Srinivasan , Jarvenpaa Sirkka L.
Published: November 2008

Empirical research in the area of computer support of groups is characterized by inconsistent results across studies. This paper attempts to reconcile the inconsistencies by linking the ad hoc reasoning in the studies to existing theories of communication, minority influence and human information processing. Contingency models are then presented based on the theories discussed. The paper concludes by discussing the linkages between the current work and other recently published integrations of empirical GDSS research and theories of GDSS.
Sufficient Working Subsets for the Tour Scheduling Problem
Authors: Easton Fred F. , Rossin Donald F.
Published: November 2008

Mathematical programs to schedule service employees at minimum cost represent each feasible schedule, or tour, with an integer variable. In some service organizations, policies governing employee scheduling practices may permit millions of different tours. A common heuristic strategy is to reformulate the problem from a small working subset of the feasible tours. Solution quality depends on the number and types of schedules included in the model.

This paper describes a working subset heuristic based on column generation. The method is general and can accommodate a mix of full- and part-time employees. Experiments revealed its formulations had objective values indistinguishable from those of models using all feasible tours, and significantly lower than those generated by alternative working subset procedures.
Ordering and Production Decisions with Supply Quality and Demand Uncertainty
Authors: Bassok Y. , Akella R.
Published: November 2008

In this paper, we solve a production planning problem that has a direct bearing on the cost to a facility of vendor quality and reliability. This solution is also an important first step in solving the multi-plant coordination problem.

We consider a manufacturing facility with one critical raw material, and one or more products whose demand needs to be met. It is assumed that demand for finished goods and the arrival process for raw material are stochastic. We calculate simultaneously the optimal production level, and the raw material order quantity which minimize the total expected cost subject to capacity and release level constraints. The results obtained by our model (the integrated model) show that the production level should be no larger than the production level obtained by solving the traditional (nonintegrated) models, and that major savings are obtained by solving the integrated model. We are also able to characterize and evaluate the cost of reliable supplies of raw material. In addition we solve the above problem in the presence of capacity constraints. A procedure which allocates capacity to different products is presented.
Shared Preferences and State-Dependent Utilities
Authors: Schervish Mark J. , Seidenfeld Teddy , Kadane Joseph B.
Published: November 2008

This investigation combines two questions for expected utility theory:

1. When do the shared preferences among expected utility maximizers conform to the dictates of expected utility?

2. What is the impact on expected utility theory of allowing preferences for prizes to be state-dependent?

Our principal conclusion (Theorem 4) establishes very restrictive necessary and sufficient conditions for the existence of a Pareto, Bayesian compromise of preferences between two Bayesian agents, even when utilities are permitted to be state-dependent and identifiable. This finding extends our earlier result (Theorem 2, 1989a) which applies provided that all utilities are state-independent. A subsidiary theme is a decision theoretic analysis of common rules for “pooling” expert probabilities.

Against the backdrop of “horse lottery” theory (Anscombe and Aumann 1963) and subject to a weak Pareto rule, we show, generally, that there is no Bayesian compromise between two Bayesian agents even when state-dependent utilities are entertained in an identifiable way. The word “identifiable” is important because, if state-dependence is permitted merely by dropping the Anscombe-Aumann axiom (Axiom 4 here) for “state-independence,” though a continuum of possible Bayesian compromises emerges, also it leads to an extreme underdetermination of an agent's personal probability and utility given the agent's preferences. Instead, when state-dependence is monitored through (our version of) the approach of Karni, Schmeidler, and Vind (1983), the general impossibility of a Bayesian, Pareto compromise in preferences reappears.
Advertising Cost Interactions and the Optimality of Pulsing
Authors: Hahn Minhi , Hyun Jin-Sok
Published: November 2008

Whether pulsing, other than chattering, can be optimal is an important concern to both advertising practitioners and marketing scientists. In this paper, we explicitly incorporate various types of costs to a one-state advertising model to analyze the effect of these costs on the optimal advertising policy. We prove that the interaction of fixed and pulsing costs does make pulsing optimal under a reasonable condition. This result not only identifies an important factor that leads to the optimality of pulsing, but also generalizes the finding obtained by Sasieni (1971).
New Organizational Forms for Enhancing Innovation: The Case of Internal Corporate Joint Ventures
Authors: Zajac Edward J. , Golden Brian R. , Shortell Stephen M.
Published: November 2008

Organizations have increasingly turned to alternative organizational forms such as joint ventures and internal corporate ventures to enhance innovation. The present study examines the use of a similar, newly-developing organizational form for purposes of innovation; namely, the internal corporate joint venture (ICJV), which has characteristics of both traditional joint ventures and internal corporate venturing. This study presents an industry-specific analysis of innovation across 53 ICJV's (hospital/physician group combinations), using qualitative and quantitative analyses to identify those factors most strongly associated with the degree of innovativeness in these new organizations. The empirical findings suggest three factors most significantly associated with innovation in the ICJV's in our sample: (1) age similarity among organizational members, (2) the sponsoring organization's orientation towards innovation, and (3) ICJV participation in integrative activities with the sponsoring organization. The study concludes by suggesting that greater attention be devoted to studying “nested innovation,” i.e., innovation within a new organizational form that is itself an administrative innovation.
Modeling a Multiprocessor System with Preemptive Priorities
Authors: Kao Edward P. C. , Narayanan Kumar S.
Published: November 2008

Consider a system with N processors and two job types with one having preemptive priority over the other. Arrivals are Poisson and service times are exponential. We present two approaches for modeling the system. The difference between the two lies in the order with which we list the numbers of jobs of each type in the system in the state definition. Although both approaches yield matrix-geometric solutions, their implications for computation are significantly different. The first approach has attractive structural properties and an easily solvable rate matrix, but the system of equations at the boundary is most often prohibitively large. The second approach, while not amenable to any easy computation of its rate matrix, renders itself to an efficient solution at the boundary, and provides a basis for waiting time analysis for low priority jobs. In the paper, we present an efficient implementation of state reduction for solving the stationary probabilities associated with the boundary states. We give a numerical example to highlight various issues in the computer solution.