bluuebunny/crossref_metadata_2025 huggingface dataset:
Comparing Hierarchical and Nonhierarchical Weighting Methods for Eliciting Multiattribute Value Models
Authors: Stillwell William G. , von Winterfeldt Detlof , John Richard S.
Published: November 2008

A value tree relating general values and concerns to specific value relevant attributes was constructed to compare three energy options: nuclear, coal, and a combined geothermal and conservation package. Thirty-seven nonexpert subjects provided judgments of the relative importance of attributes in the tree using both hierarchical and nonhierarchical weighting procedures, and they rated the energy options on all attributes and all levels of the tree. From these importance weights and ratings several additive multiattribute value models were constructed and compared with holistic rankings and ratings of the three options.

The experiment had three basic findings: First, hierarchical weights were steeper (higher weight ratios) than nonhierarchical weights. Second, groups that differed in their holistic first choice nevertheless showed substantial agreement in their assessment of attribute weights. Third, attribute level ratings of the relative desirability of energy options also agreed rather well across groups, although there was a tendency for each group to favor their holistic first choice. This convergence of multiattribute value model parameters resulted in a “common model” that was most consistent with holistic evaluations of the pro-conservation group, and generally inconsistent with those of the pro-nuclear group. This third finding of differential consistency between model composites and holistic evaluations is interpreted as a result of weight parameter distortions due to social desirability and/or a neglect to consider attribute value ranges when making weight judgments.
Diffusion and Advertising: The German Telephone Campaign
Authors: Simon Hermann , Sebastian Karl-Heinz
Published: November 2008

The goal of the present paper is to investigate the influence of advertising on the diffusion of new telephones in West Germany. Several alternative ways of integrating advertising into the well-known Bass-diffusion-model are suggested and empirically tested.

The econometric investigation yields results which are consistent with the behavioral assumption. A model which assumes that advertising mainly influenced the demand of imitators is accepted as the most valid representation of reality. The lag structure of advertising response was best captured by a Nerlove-Arrow-model. Advertising attained its maximum effect after several months. A cumulative measure of the total advertising effect is suggested and quantified. Directions for potential generalizations are discussed.
A Game-Theoretic Model of Corporate Takeovers by Major Stockholders
Authors: Powers Imelda Yeung
Published: November 2008

This paper models the exchange between cash and decision power among all stockholders in a company with two major stockholders. It investigates the feasibility and profitability of corporate takeovers, and shows the existence, under some conditions, of pairs of Nash equilibrium strategies that result in one major stockholder taking control of the company. Finally, it solves for threat-resistant strategies (takeover offers that will not be outbid) for both major players, and concludes with a threat-resistant Nash equilibrium solution to the model.
A Sequential Model of R&D Investment Over an Unbounded Time Horizon
Authors: Hopp Wallace J.
Published: November 2008

A Markov model of sequential R&D investment, where successful firms are assumed to have an advantage in related follow-on R&D, is formulated and a solution approach is given. Under this assumption, profit maximizing firms must consider the effect of R&D investments on their future market position as well as the direct monetary returns from innovation.

Under certain conditions, free entry is shown to lead to excessive competition and overinvestment by the firms. This market failure can be corrected through a three-part policy of restricted patent lives, subsidies to firms for consecutive successes, and entry taxes. In addition to these policy conclusions, the modeling and solution approaches presented here provide a framework for further research efforts to incorporate market position into project selection and budget allocation models.
A Foundation for the Study of Group Decision Support Systems
Authors: DeSanctis Gerardine , Gallupe R. Brent
Published: November 2008

Technical developments in electronic communication, computing, and decision support, coupled with new interest on the part of organizations to improve meeting effectiveness, are spurring research in the area of group decision support systems (GDSS). A GDSS combines communication, computing, and decision support technologies to facilitate formulation and solution of unstructured problems by a group of people. This paper presents a conceptual overview of GDSS based on an information-exchange perspective of decision making, Three levels of systems are described, representing varying degrees of intervention into the decision process. Research on GDSS is conceived as evolving over time from the study of simple “shell” systems, consisting of menus of features available for selection by a group, to consideration of sophisticated rule-based systems that enable a group to pursue highly structured and novel decision paths. A multi-dimensional taxonomy of systems is proposed as an organizing framework for research in the area. Three environmental contingencies are identified as critical to GDSS design: group size, member proximity, and the task confronting the group. Potential impacts of GDSS on group processes and outcomes are discussed, and important constructs in need of study are identified.
Ordinal Time Series Methodology for Industry and Competitive Analysis
Authors: Ruefli Timothy W. , Wilson Chester L.
Published: November 2008

Ordinal time series analysis is a new methodology that is especially appropriate for industry and competitive analysis along multiple dimensions of performance over periods of time. The methodology, by using ordinal data, eliminates the requirements encountered in cardinal analysis for further assumptions and calculations concerning model specifications, appropriate discount rates, and re-scaling of data to facilitate presentation. Using longitudinal data, ordinal time series analysis allows the strategy analyst to develop empirical measures of the position, volatility, direction of movement, and relative uncertainty associated with an industry or with groups of firms within that industry. Using these statistical patterns of industry behavior, key strategic dimensions and relationships among and across performance measures, groups of firms, and industries can be identified. The methodology is illustrated by using published data to perform a comparative ordinal time series analysis of the largest firms in the transportation industry over the last quarter century.
Planning System Success: A Conceptualization and an Operational Model
Authors: Venkatraman N. , Ramanujam Vasudevan
Published: November 2008

Research on strategic planning has been handicapped by lack of an appropriate operationalizing scheme for measuring the success of planning systems. In this paper, an operational model for measuring planning system success is developed in terms of two interrelated dimensions—improvements in the capabilities of the planning system and extent of fulfillment of key planning objectives. Multiple items reflecting these dimensions are proposed. Construct validity of the two dimensions are evaluated by applying Jöreskog's analysis of covariance structures approach on data on the planning practices of 202 strategic planning units. Validated measurement schemes for the two model dimensions are offered for use in future research efforts on strategic planning effectiveness.
Consensus Forecasts of Corporate Earnings: Analysts' Forecasts and Time Series Methods
Authors: Conroy Robert , Harris Robert
Published: November 2008

An alternative to using a single forecasting method is to average the forecasts made by various methods. In this paper we examine empirically combinations of financial analysts' forecasts and forecasts from time series methods in order to predict corporate earnings per share. We conclude that, on average, the primary forecasting advantages of analysts over time series methods based on annual data appear to occur over short forecast horizons (less than a year). Neither analysts nor other time series methods substantially outperform a random walk prediction of no change when forecasts are made near the beginning of the fiscal year. For predictions in the first half of the fiscal year, there is evidence of forecasting benefits from combining time series and analysts' forecasts, especially if there are few analysts' forecasts.
The Optimality of (s, S) Policies for a Stochastic Inventory Problem with Proportional and Lump-Sum Penalty Cost
Authors: Aneja Yash , Noori A. Hamid
Published: November 2008

In this paper we consider a single product multi-period inventory problem for which the penalty cost consists of two parts, a lump-sum portion which is independent of the size of the shortage and a portion which is linear in the size of the shortage. We show that for all nonincreasing demand density functions, the expected total cost function is K-convex and hence, there is an optimal policy for the n-period problem that is (s, S).
Inventory Policies Under Various Optimizing Criteria and Variable Markup Rates
Authors: Arcelus F. J. , Srinivasan G.
Published: November 2008

This paper extends the deterministic EOQ model to reflect various optimizing criteria and alternative demand and price structures. Its primary purpose is to develop decision rules for the management of finished goods inventories, especially in retailing, where inventories are evaluated in the same way as any other investment, namely on their ability to generate profits, rather than on the traditional least-cost basis. To that effect, the models developed here consider demand to be a function of price, with price defined as a markup of unit cost. The decision variables are the order quantity and the markup rate. Possible optimizing objectives include profits, return on investment, or residual income, the three most widely used evaluators of short-term investment performance. Optimal solutions for each case are obtained and the resulting inventory policies evaluated.
On Optimal Reservation Prices in Auctions
Authors: Engelbrecht-Wiggans Richard
Published: November 2008

The theory of auction design examines how various factors affect the outcome of an auction. Most of the existing literature focuses on how varying the amount of information available to each bidder affects the bid-taker's expected revenue when all other factors remain constant. This paper studies how the bid-taker's expected revenue varies with changes in the auction format when such changes affect the number of bidders, and, in turn, the bidders' maximum value for the object being sold. Specifically, we examine how varying the reservation price or screening level affects the bid-taker's expected revenue though its effect on the number of bidders. For two simple examples, the losses associated with a reduced number of bidders outweighs any benefits that nontrivial reservation prices might have had in models with an exogonously set number of bidders.
A Mathematical Model of Dental Caries Used to Evaluate the Benefits of Alternative Frequencies of Bitewing Radiographs
Authors: Shwartz Michael , Pliskin Joseph S. , Gröndahl Hans-Göran , Boffa Joseph
Published: November 2008

This paper describes the development of a mathematical model that can provide the basis for a decision support system to aid dentists (or patients) in making decisions about how often to perform (or receive) bitewing radiographs. The model, which describes the initiation and progression of approximal dental caries, is developed from an analysis of 4 to 13 sets of serial bitewing radiograph exams taken on over 700 individuals. Caries incidence is modeled as follows: (1) there is an underlying gamma distribution representing variation in an individual's expected annual number of new lesions; (2) an individual's distribution of new lesions in a year follows a Poisson process with expected value that can be thought of as having been randomly selected from the gamma distribution. Progression is modeled by assuming duration of carious lesions in each half of the dental enamel can be approximated by a piecewise exponential distribution. Using this model, we determine the relationship between when the next set of bitewing radiographs is performed and the probability carious lesions are detected before any lesions reach the inner half of the dentin. For high risk individuals with no unrestored enamel lesions from their last set of radiographs, bitewings should be scheduled yearly; for low risk individuals with no unrestored enamel lesions, bitewings could be scheduled every 2.5 to 3 years, though both of these conclusions depend on the patient's and/or dentist's attitude toward risk.
A Constrained Capital Budgeting Problem with Applications to Repair Kit Selection
Authors: Mamer John W. , Shogan Andrew W.
Published: November 2008

We consider a capital budgeting problem in which each potential project requires the performance of a known set of activities. In general, these sets of activities are not mutually exclusive. However, when a particular activity is common to the requirements of multiple projects, a single performance of the activity simultaneously satisfies the requirements of the multiple projects. Associated with the performance of each activity are two quantities: a known fixed cost and a consumption of a known amount of a scarce resource. Because the sets of activities required by the projects are not mutually exclusive, we cannot apportion an activity's fixed cost or resource consumption to a single project. In this paper, we formulate this capital budgeting problem (and a slight variant) as a maximal network flow problem with a side constraint, and we report computational experience using Lagrangian relaxation to find an optimal solution. We also discuss an application to the selection of parts and tools to include in a field repair kit used to fix a variety of types of breakdowns.
An Optimization Based Integrated Short-Term Refined Petroleum Product Planning System
Authors: Klingman Darwin , Phillips Nancy , Steiger David , Wirth Ross , Padman Rema , Krishnan R.
Published: November 2008

This paper contains a new and very successful application of mathematical programming in the petroleum industry. Specifically, the paper describes the design and implementation of a model and computer system to address the complex short-term planning and operational issues associated with the supply, distribution, and marketing of refined petroleum products. This system has been successfully implemented at Citgo Petroleum Corporation. The benefits include a $116 million reduction (based on historical inventory-to-sales ratios) in product inventories resulting in a $14 million per year reduction in working capital costs and an additional $2.5 million per year estimated contribution to bottom line profits due to multiple supply, distribution, and marketing insights provided by the system.
Performance Evaluation of State-Owned Enterprises in Theory and Practice
Authors: Ramamurti Ravi
Published: November 2008

This study explores the goal orientation of state-owned enterprises (SOEs) with a view to develop a behavioral theory of SOEs. It is set in India, where as in many other countries the government expects SOEs to promote the “public interest” rather than maximize profits.

The research design consisted in searching for patterns in the subjective evaluations of a set of Indian SOEs by critical environmental actors (senior bureaucrats and influential journalists). The study attempted to get at each respondent's “espoused theory” for performance evaluation as well as his or her “theory-in-use,” and compared both with official goals as well as the prescriptions of welfare economists. Five models of performance evaluation, varying in criteria and weighting schemes, were considered.

The results showed—with surprising consistency—that commercial profitability was the most important criterion that explained bureaucrats' subjective evaluations. Lack of comprehensive information seemed to accentuate their reliance on profitability—but not by very much. For a minority of bureaucrats (Type 1), the more important explanation seemed to be their “incorrect” belief that SOEs could be judged like private firms, official policy notwithstanding. For the majority (Type 2), who espoused views consistent with official policy, the explanation seemed to be conceptual confusion or double standards. Both types also behaved as if they would like SOEs to maximize profitability rather than just break even or earn a reasonable return. Some of these findings were true for responding journalists as well.

Given these results, managers of Indian SOEs can be expected to seek profits not only to reduce financial dependence on government but also to gain a measure of external legitimacy. Recognizing the importance of profitability as a criterion-in-use, they can be expected to propose strategies that would increase their firm's profitability and resist those that would reduce it, regardless of official goals. Where managers are free to act independently, profitability may prevail as the dominant decision criterion, but where they are not, the outcome may depend on more complex factors.

More generally, the profit motive in SOEs may be as strong or stronger than it appeared to be in India in countries with (a) less sophisticated administrative systems or personnel; (b) an official ideology more to the right than in “socialist” India; and (c) a higher proportion of mixed enterprises. The paper concludes with the implications of these findings for the design of performance evaluation systems at the government-SOE interface.
Minimizing Mean Squared Deviation of Completion Times About a Common Due Date
Authors: Bagchi Uttarayan , Sullivan Robert S. , Chang Yih-Long
Published: November 2008

This paper addresses a nonpreemptive single machine scheduling problem where all jobs have a common due date and have zero ready time. The scheduling objective is to minimize mean squared deviation (MSD) of job completion times about the due date. This nonregular measure of performance is appropriate when earliness and tardiness are both penalized, and when large deviations of completion time from the due date are undesirable. A special case of the MSD problem, referred to as the unconstrained MSD problem, is shown to be equivalent to the completion time variance problem (CTV) studied by Merten and Muller (Merten, A. G., M. E. Muller. 1972. Variance minimization in single machine sequencing problems. Management Sci. 18(September) 518–528.) and Schrage (Schrage, L. 1975. Minimizing the time-in-system variance for a finite jobset. Management Sci. 21(May) 540–543.). Strong results for this latter problem are combined with several new propositions to develop a reasonably efficient procedure for solving the unconstrained MSD problem. This enables us to improve the existing procedures for the CTV problem. We also propose a branching procedure for the constrained MSD problem and present computational results.
Parallel Machine Scheduling: Processing Rates Dependent on Number of Jobs in Operation
Authors: Dror Moshe , Stern Helman I. , Lenstra Jan Karel
Published: November 2008

We treat the class of n job − m machine scheduling problems with job processing times dependent on the number of jobs being simultaneously processed in the system at any point in time. Such systems occur when jobs are assigned to multiple parallel processors driven by a common power source. In situations typical of hydraulic and pneumatic power sources the level of power delivered to each processor is inversely proportional to the number of processors simultaneously at work. Aside from the variable processing rate assumptions, the remaining assumptions on the structure of the system conform to those of the standard identical parallel processor problem without job preemption. Although the standard n job − m machine problem is NP-hard with respect to a makespan measure, this is not the case when our seemingly complicating variable processing rate function, typical of hydraulic power sources, is included.

In this case our main results are exceedingly simple. The makespan is found to be independent of the job-machine assignment, and the flowtime is minimized using one out of m processors. When other job processing rate functions or constant switch-over times are considered, then solving the problem becomes increasingly difficult, and the use of multiple processors is recommended. This paper concludes with a description of a real-world problem (scheduling the refueling of navy boats) which motivated this research.
A Layout Planning System with Multiple Criteria and a Variable Domain Representation
Authors: Jacobs F. Robert
Published: November 2008

This paper describes a new system capable of solving detailed facility layout problems. The system allows the consideration of multiple objectives on the layout solution. Criteria related to weighted distance between interacting layout elements, the structure of the final layout design, the use of circulation space in the layout and the satisfaction of special adjacency requirements, are included in the formulation. The paper includes a comparison of this new procedure to existing procedures using problems selected from the literature.
Priority Rules for Job Shops with Weighted Tardiness Costs
Authors: Vepsalainen Ari P. J. , Morton Thomas E.
Published: November 2008

Mainstream research in priority dispatching has considered jobs with equal delay penalties, thereby ruling out strategic differentiation of customer orders. We develop and test efficient dispatching rules for the weighted tardiness problem with job-specific due dates and delay penalties. Our approach builds on previous greedy heuristics which assign the priority on the basis of the expected tardiness cost per immediate processing requirements. In multi-machine applications, estimates of the remaining leadtime are needed to determine local operation due dates and to evaluate the adequacy of the job's slack. Two slightly different “look-ahead” features are identified, and the corresponding priority rules are tested in job shop experiments with a variety of load conditions. The results indicate that the new rules are not only superior to competing rules for minimizing weighted tardiness penalties but are also robust for several other criteria, such as the number of tardy jobs and the costs of in-process inventories.
Asymmetric Players and Bargaining for Profit Shares in Natural Resource Development
Authors: Anandalingam G.
Published: November 2008

In this paper we study how natural resource development contracts depend on the level of bargaining power of Trans National Corporations (Agents) and host country governments (Principal). We concentrate on share contracts where a portion of the net firm income from resource development is transferred to the government, and show that (i) as the number of agents increase, the principal receives a greater share; (ii) if either player is able to threaten the other, the threatening player receives a greater share; and (iii) if the principal shares in production costs, he obtains a greater share. These results would generally be invariant if the principal was less risk averse than the agent.
Marketing-Production Decisions in an Industrial Channel of Distribution
Authors: Eliashberg Jehoshua , Steinberg Richard
Published: November 2008

This paper presents a model that considers the interface between marketing and production decisions in a channel of distribution of industrial goods comprised of a manufacturer and a distributor. The key issue investigated is the nature of the coordination within the channel in light of an unstable pattern of seasonal demand. The investigation, which focuses on dynamic issues, considers production activities such as product delivery and inventory policy, and their link to marketing strategies such as pricing policies.

The focus here is on the dynamic nature of the coordinational aspects of the various policies. For example, the following questions are addressed: What is the distributor's pricing strategy throughout the season? What is the nature of the contractual price in the channel? Under what conditions should the distributor carry no inventory throughout the seasonal period? Under what conditions should the manufacturer carry no inventory? What is the impact of the seasonal parameters and differing holding and processing costs upon the various policies of the distribution channel? We propose a mechanism to address these issues, and we provide explicit answers to these questions.
Simultaneous Determination of Production Cycle and Inspection Schedules in a Production System
Authors: Lee Hau L. , Rosenblatt Meir J.
Published: November 2008

Classical Economic Manufacturing Quantity (EMQ) models have usually ignored the possibility of process deterioration and the existence of defective items in the production lot. Moreover, the use of machine inspection for maintenance and restoration purposes has not been considered. On the other hand, past studies on maintenance models do not consider the length of a production run to be a decision variable. This paper addresses the problem of joint control of production cycles or manufacturing quantities and maintenance by inspection. A simple relationship has been developed to determine the effectiveness of maintenance by inspection. Furthermore, when maintenance by inspection is adopted, it is shown that the optimal inspection intervals are equally-spaced. The problem of simultaneous determination of EMQ and the inspection schedules is solved by using an approximation to the cost function. The resulting EMQ is found to be an adjustment to the classical EMQ. Finally, the relationships between different parameter values and the magnitudes of the cost penalty for using the classical EMQ are examined.
Reducing the Congestion in a Class of Job Shops
Authors: Yao David D. , Kim S. C.
Published: November 2008

Consider a job shop that is modelled as an open queueing network of the Jackson (Jackson, J. R. 1957. Networks of waiting lines. Oper. Res. 5 518–521.) type. All work stations in the shop have the same number of parallel servers. Two problems are studied: the loading of stations and the assignment of servers, which are represented by loading and assignment vectors, respectively. Majorization and arrangement orderings are established to order, respectively, the loading and the assignment vectors. It is shown that reducing the loading vector under majorization or increasing the assignment vector under arrangement ordering will reduce the congestion in the shop in terms of reducing the total number of jobs (in the sense of likelihood ratio ordering), the maximum queue length (in the sense of stochastic ordering), and the queue-length vector (in the sense of stochastic majorization). The results can be used to support production planning in certain job shops, and to aid the design of storage capacity.
A Goal Programming/Constrained Regression Review of the Bell System Breakup
Authors: Charnes A. , Cooper W. W. , Sueyoshi T.
Published: November 2008

The recently implemented court decision to break up Bell (=American Telephone & Telegraph Co.) to accord with U.S. anti-trust laws represents a highly significant policy decision which is proving to be influential in other countries as well as the U.S. The telecommunication industry is of such size and importance that even relatively small economies that might be lost with Bell's breakup as a “natural monopoly” could involve substantial welfare losses to consumers and producers. Studies commissioned by the U.S. Justice Department that approached this topic by econometric methods reported that the evidence failed to support the contention that Bell was a natural monopoly. Here a goal programming/constrained regression, as developed in the Management Science literature, uses the same functional form and the same data but nevertheless reverses the main findings of the econometric studies in every one of the 20 years covered. This kind of difference in results obtained by two different methods of analysis points up a need for drawing on persons from different disciplines who are capable of checking each other's methodologies when important policy decisions may be influenced by results that depend on the methodologies that these disciplines customarily use. Advantages of doing this are further illustrated by data deficiencies that escape detection by the econometric methods employed in the Justice Department-commissioned studies.
Multiproduct Queueing Networks with Deterministic Routing: Decomposition Approach and the Notion of Interference
Authors: Bitran Gabriel R. , Tirupati Devanath
Published: November 2008

Queueing networks have been used to model the performance of a variety of complex systems. Since exact results exist for only a limited class of networks, the decomposition methodology has been used extensively to obtain approximate results. In this paper, we consider open queueing networks with multiple product classes, deterministic routings and general arrival and service distributions. We examine the decomposition method for such systems and show that it provides estimates of key parameters with an accuracy that is not acceptable in many practical settings. Recognizing this weakness, we enrich the approach by modeling a phenomenon previously ignored. We consider interference among products and describe its effect on the variance of the departure streams. The recognition of this effect significantly improves the performance of this methodology. We provide extensive experimental results based on the data of a manufacturer of semiconductor devices.
The Speed and Cost of Industrial Innovation in Japan and the United States: External vs. Internal Technology
Authors: Mansfield Edwin
Published: November 2008

This study, based on detailed data obtained from carefully selected samples of about 200 Japanese and American firms, seems to be the first comprehensive empirical investigation of the differences between Japan and the United States in innovation cost and time. Whereas the Japanese have substantial advantages in this regard in some industries (notably machinery), they do not seem to have any substantial advantage in others (notably chemicals). Whereas they have great advantages in carrying out innovations based on external technology, they do not seem to have any in carrying out innovations based on internal technology. Japanese firms allocate their resources quite differently than do American firms, a larger percentage of total innovation cost being devoted to tooling and manufacturing equipment and facilities, a smaller percentage being devoted to marketing startup. A large part of America's problem in this regard seems to be due to its apparent inability to match Japan as a quick and effective user of external technology.
Event Graph Modelling for Simulation with an Application to Flexible Manufacturing Systems
Authors: Sargent Robert G.
Published: November 2008

This paper contains numerous extensions and refinements to event graphs which were recently introduced by Schruben for simulation modelling. These new results are integrated with Schruben's work to present a complete description of event graphs and their analysis. A (simple) flexible manufacturing system is modelled via event graphs to illustrate event graph modelling and analysis.
Note—A Note on “The Use of Categorical Variables in Data Envelopment Analysis”
Authors: Kamakura Wagner A.
Published: November 2008

A variant of Banker and Morey's (Banker, R. D., R. C. Morey. 1986. The use of categorical variables in data envelopment analysis. Management Sci. 32(12, December) 1613–1627.) DEA model for controllable ordinal outputs. As opposed to the original model, this version allows the comparison of a Decision Making Unit (DMU) to other DMU's operating at equal or higher levels of the ordinal outputs.
Resolving a Conflict Situation with a Reference Outcome: An Axiomatic Model
Authors: Gupta Sunil , Livne Zvi A.
Published: November 2008

We formulate an axiomatic model of conflict situations in which there exist two prominent outcomes. One is the traditional conflict outcome, the other is the reference outcome. The latter is an outcome with the following properties: (1) It is Pareto-superior to the conflict outcome, (2) It is not Pareto optimal, (3) All the bargainers agree that the conflict's solution should be Pareto superior to it. We present a solution function for this model. It satisfies uniquely several desirable requirements. The model is an extension of Nash's Bargaining Problem paradigm, and the particular solution function we propose is a variation of the Kalai-Smorodinsky solution.
Economic Design of Control Charts with Different Control Limits for Different Assignable Causes
Authors: Tagaras George , Lee Hau L.
Published: November 2008

The use of multiple control limits and multiple corresponding levels of response for processes is an effective way for statistical process control when different assignable causes exist which lead to different out-of-control states of the processes, and different restoration procedures. This paper examines the optimal economic design of such process control charts. The exact mathematical model is developed and the expected cost per time unit function is derived. The costs associated with the statistical process control are minimized by means of an optimization procedure involving a quasi-Newton method and a Fibonacci lattice search. Sensitivity analysis performed on a large number of numerical examples reveals key relationships between model parameters. A comparison between the proposed control chart and an approximate matched single-cause chart shows that the former can be a significant improvement over the latter. Several model extensions and managerial implications are also discussed.
Modeling Time-Dependent Arrivals to Service Systems: A Case in Using a Piecewise-Polynomial Rate Function in a Nonhomogeneous Poisson Process
Authors: Kao Edward P. C. , Chang Sheng-Lin
Published: November 2008

We consider the use of a nonhomogeneous Poisson process in modeling time-dependent arrivals to service systems. In analyzing a set of actual arrival times corresponding to epochs of calls for on-line analysis of electrocardiograms, we found that approximating the rate function by an exponential polynomial (or exponential trigonometric polynomial) suggested in the literature inadequate. This was caused by the nature of our data which contained frequent cyclic abrupt changes in arrival rates. In this paper, we propose the use a piecewise polynomial to represent the rate function. We present two maximum likelihood estimators for estimating the parameters of the piecewise polynomial—one based on arrival times, and another based on aggregated counts, and a numerical method for carrying out the computation. We use a procedure based on thinning for generating arrival times from such a process. For hypothesis testing, these are combined to produce critical values for the Kolmogorov Smirnov statistic by a Monte Carlo simulation. While our approach is presented and discussed in the context of a specific case, the results are applicable and observations relevant to many other systems sharing similar patterns of variation.
Determining Safety Stock in the Presence of Stochastic Lead Time and Demand
Authors: Eppen Gary D. , Martin R. Kipp
Published: November 2008

We consider the problem of setting safety stock when both the demand in a period and the lead time are random variables. There are two cases to consider. In the first case the parameters of the demand and lead time distributions are known; in the second case they are unknown and must be estimated. For the case of known parameters a standard procedure is presented in the literature. In this paper, examples are used to show that this procedure can yield results that are far from the desired result. A correct procedure is presented.

When the parameters are unknown, it is assumed that a simple exponential smoothing model is used to generate estimates of demand in each period and that a discrete distribution of the lead time can be developed from historical data. A correct procedure for setting safety stocks that is based on these two inputs is given for two popular demand models. The approach is easily generalized to other models of demand. Safety stock calculation is simplified when certain normality assumptions are valid. Simulation results in the Appendix indicate when these assumptions about normality are reasonable.
Note—Comments on “A Quantity Discount Pricing Model to Increase Vendor Profits”
Authors: Joglekar Prafulla N.
Published: November 2008

Monahan (Monahan, J. P. 1984. A quantity discount pricing model to increase vendor profits. Management Sci. (June) 720–726.) adapted the quantity discount model of inventory theory to the problem of determining an optimal quantity discount schedule from a vendor's point of view, and opened up an important direction of research. However, his one-item, one-customer, one-vendor model is based on several implicit assumptions that must be judged unreasonable. Monahan must account for the vendor's inventory carrying charges and redefine his variable S2. It is shown that a rational vendor's manufacturing frequency would not be identical to the buyer's ordering frequency if the vendor's manufacturing setup costs are substantially larger than the buyer's ordering costs. A numerical example presented in this note also questions the practical usefulness of Monahan's model even after its theoretical inaccuracies axe corrected. Monahan's model may explain discounts that are a fraction of 1% of the price of an item, but it fails to explain commonly observed magnitudes of quantity discounts, such as 10% of the unit price.
Reply—On “Comments on a Quantity Discount Pricing Model to Increase Vendor Profits”
Authors: Monahan James P.
Published: November 2008

Professor Joglekar is to be thanked for his generally insightful Comments (1988) concerning my paper (Monahan [Monahan, J. P. 1984. A quantity discount pricing model to increase vendor points. Management Sci. 30(6, June) 720–726.). He has in my view correctly assessed the limitations of two important production assumptions I made, assumptions which need to be rethought in any quantity-discount pricing models of the future. Yet, although I find myself in general agreement with Joglekar's comments, I wish to clarify some points concerning the model and its potential applicability.
Selection and Design of Heuristic Procedures for Solving Roll Trim Problems
Authors: Haessler Robert W.
Published: November 2008

This paper discusses the selection and design of heuristic procedures for solving one-dimensional roll trim problems. These are well-defined combinatorial problems which are too large to optimize. Five different roll trim problems from the paper and film industries are described along with the heuristic procedures that have been used successfully to improve the quality of the solutions generated. The paper concludes with some general guidelines for developing “industrial-grade” heuristic problem solving procedures.
Computing Block-Angular Karmarkar Projections with Applications to Stochastic Programming
Authors: Birge John R. , Qi Liqun
Published: November 2008

We present a variant of Karmarkar's algorithm for block-angular structured linear programs, such as stochastic linear programs. By computing the projection efficiently, we give a worst-case bound on the order of the running time that can be an order of magnitude better than that of Karmarkar's standard algorithm. Further implications for approximations and very large-scale problems are given.
Note—On Piecewise Reference Technologies
Authors: Färe R. , Grosskopf S. , Njinkeu D.
Published: November 2008

In this paper we introduce a piecewise parametric production model that may be used as a reference technology for efficiency gauging. We show that other piecewise reference technologies used in efficiency measuring are obtained as special cases of our model.
Decision Support System Effectiveness: A Review and an Empirical Test
Authors: Sharda Ramesh , Barr Steve H. , McDonnell James C.
Published: November 2008

Despite the increasing popularity of decision support systems (DSS), effectiveness of such systems remains unproven. Past research claiming usefulness of the DSS has relied largely on anecdotal or case data. The relatively few laboratory experiments report mixed results regarding the effects of a decision aid. This study reviews the results of prior investigations and examines the effectiveness of DSS-aided decision makers relative to decision makers without a DSS over an eight-week period. An executive decision making game was used in two sections of a business strategy course. Three-person teams in one section used a DSS while the teams in the other section played the game without such an aid.

Various measures of decision quality were recorded. Overall, the groups with access to the DSS made significantly more effective decisions in the business simulation game than their non-DSS counterparts. The DSS groups took more time to make their decisions than the non-DSS groups at the beginning of the experiment. However, the decision times converged after the third week.

The DSS teams reported investigating more alternatives and exhibited a higher confidence level in their decisions than the non-DSS groups, but these differences were not statistically significant.
Momentum Accounting and Managerial Goals on Impulses
Authors: Ijiri Yuji
Published: November 2008

Conventional accounting measures wealth W (assets and liabilities) and accounts for its net change, W(t + 1) − W(t), by means of income ΔW(t), classified into various revenue and expense items. Proposed “momentum accounting” measures income momentum Ẇ = dW/dt (time rate at which income is being earned at a given point in time) and accounts for its net change, Ẇ(t + 1) − Ẇ(t), by means of impulses ΔẆ(t). Here the impulses, a term borrowed from the momentum-impulse principle in mechanics, are classified into various factors, internal or external to the enterprise, that contributed to the momentum change. If conventional accounting is viewed as focusing on an odometer of a car, momentum accounting is analogous to focusing on its speedometer and attributing the change in its reading to impulses that are judged to be responsible for the change. This paper proposes impulse-based managerial goals as a substitute for currently popular income-based managerial goals, discussing problems associated with the latter that highlights short-term income achievements and that tends to reward management for the momentum created by their predecessors as it is realized as income by the mere passage of time.
Modeling Multiattribute Utility, Risk, and Belief Dynamics for New Consumer Durable Brand Choice
Authors: Roberts John H. , Urban Glen L.
Published: November 2008

This paper proposes a brand choice model to aid in the prelaunch management of a new consumer durable entry in an existing category. The model contributes to theory by integrating the critical phenomena of multiattribute preference, risk, and dynamics in an individual level expected utility framework. The integration is based on established theoretical constructs in utility, Bayesian decision analysis, and discrete choice theory. Measurement and estimation procedures are presented, an application is described, and the managerial relevance of this work as a planning and forecasting tool is examined.
The Reliability of Subjective Probabilities Obtained Through Decomposition
Authors: Ravinder H. V. , Kleinmuntz Don N. , Dyer James S.
Published: November 2008

The use of decomposition as a procedure for improving the consistency of subjective probability encoding is discussed. Using a psychometric measurement model, an expression is developed that describes the random error associated with decomposition estimates as a function of characteristics of the component assessments. Decomposition is compared to direct assessment in terms of the percent change in measurement error that can be attributed to the use of decomposition. Potential benefits of decomposition are specified and recommendations made on how to utilize decomposition as an approach for error control.
Optimizing Resource Acquisition Decisions by Stochastic Programming
Authors: Bienstock Daniel , Shapiro Jeremy F.
Published: November 2008

This paper reports on the application of stochastic programming with recourse to strategic planning decisions regarding resource acquisition. A resource directed decomposition method, which simultaneously exploits stochastic programming and mixed integer programming model structures, is proposed. Computational experience with the method applied to fuel contract and plant construction decisions faced by an electric utility is presented.
Note—A Branch-and-Bound Approach to the Bicriterion Scheduling Problem Involving Total Flowtime and Range of Lateness
Authors: Sen Tapan , Raiszadeh Farhad M. E. , Dileepan Parthasarati
Published: November 2008

This paper considers a bicriterion scheduling problem where a linear combination of two objective functions is considered, with weighting factors used to represent relative importance of the two criteria, i.e., total flowtime and range of lateness. A branch-and-bound solution procedure is designed for the problem. Computational results are also reported.
Heuristics Based on Spacefilling Curves for Combinatorial Problems in Euclidean Space
Authors: Bartholdi John J. , Platzman Loren K.
Published: November 2008

We describe a family of heuristics to solve combinatorial problems such as routing and partitioning. These heuristics exploit geometry but ignore specific distance measures. Consequently they are simple and fast, but nonetheless fairly accurate, and so seem well-suited to operational problems where time or computing resources are limited. We survey promising new application areas, and show how procedures may be customized to reflect the structure of particular applications.
Heuristics with Constant Error Guarantees for the Design of Tree Networks
Authors: Altinkemer Kemal , Gavish Bezalel
Published: November 2008

A tree network is a collection of trees rooted at a common central node. Several types of network design problems can be viewed as requiring the formation of a spanning tree network of minimum length, subject to a bound on the sum of “weights” on the nodes of any component tree. Such problems are NP-complete, and experience has shown that only small examples can be solved to optimality. This paper describes an efficient heuristic algorithm based on partitioning of a traveling salesman tour. When all the nodes have a unit weight and the bound is K, the heuristic finds a solution whose cost is at most 3 − 2/K times the minimum; in the general case the error bound is 4.
Finding Embedded Network Rows in Linear Programs I. Extraction Heuristics
Authors: Bixby Robert E. , Fourer Robert
Published: November 2008

An embedded network within a linear program is, roughly speaking, a subset of constraints that represent conservation of flow. We examine three broad classes of heuristic techniques—row-scanning deletion, column-scanning deletion, and row-scanning addition—for the extraction of large embedded networks. We present a variety of implementations, and compare their performance on realistic test problems. The success of our tests depends, in part, on several preprocessing steps that scale the constraint matrix and that set aside certain rows and columns. Efficiency of the subsequent network extraction is dependent on the implementation, in predictable ways. Effectiveness is harder to explain; the more sophisticated and expensive implementations seem to be most reliable, but much simpler implementations sometimes find larger networks. The largest networks are obtained by applying a final augmentation phase, which is studied in the second part of this paper.