bluuebunny/crossref_metadata_2025 huggingface dataset:
Strategy, Strategy Making, and Performance—An Empirical Investigation
Authors: Segev Eli
Published: November 2008

The purpose of this paper is to study the effect of the relationships between strategic type and strategy-making mode on organizational performance. Two important typologies were used in this study, one stressing strategic type, the other, strategy-making mode. Hypotheses were stated on strategy “fit” of specific strategy type with strategy-making modes, where strategic fit contributes to organizational performance. As part of a larger study of strategy formulation, the two top executives in each of 126 kibbutz-owned industrial enterprises evaluated their organization's strategic type as Defender. Prospector, Analyzer, or Reactor, and its strategy-making mode as Entrepreneurial, Adaptive and Planning. The executives typed their organizations using textual descriptions of strategies. The findings clearly indicate links between the two typologies, i.e., associations between strategic types and strategy-making modes, and that certain combinations are more conducive to enhancing organizational performance than others. When nonoptimal stragies are adopted they result in lower levels of performance. The paper also relates the primary discussion on the relationship between the strategy type and strategy-making mode typologies to the content-process dilemma on which it sheds some light.
Note—Lot-Sizing and Sequencing Delays
Authors: Karmarkar Uday S.
Published: November 2008

In production scheduling, time performance is usually taken to be the province of sequencing models which take task processing times to be given. However, in practice, processing times can often be controlled by the choice of lot sizes which thus have a major impact on makespan, waiting times, flow times and other measures. Here the interface between lot sizing and sequencing is introduced and the effect of lot sizes on makespan and flow times is qualitatively analyzed.
Manufacturing Strategy, Environmental Uncertainty and Performance: A Path Analytic Model
Authors: Swamidass Paul M. , Newell William T.
Published: November 2008

In recent years, researchers and practitioners are paying increasing attention to the phenomenon of manufacturing strategy. However, there exists no formal theory of manufacturing strategy to explain the phenomenon. There is a real need for empirical studies for the development of such a theory. This study takes a step in that direction by clarifying, organizing and integrating terms and concepts relevant to manufacturing strategy in the process of conducting an empirical investigation of key manufacturing strategy variables.

The empirical section of this study based on data gathered from 35 manufacturers found that environmental uncertainty influenced manufacturing strategy variables such as Manufacturing Flexibility, and the Role of Manufacturing Managers in Strategic Decision Making. The manufacturing strategy variables, in turn, influenced business performance.
An Approach for Confirmatory Measurement and Structural Equation Modeling of Organizational Properties
Authors: Anderson James C.
Published: November 2008

A crucial undertaking in research on organizations is to obtain valid estimates of the organization-level constructs and their relationships to one another. One organizational research methodology has multiple individuals within each firm act as informants and report their perceptions of these constructs. Drawing upon past work, a comprehensive, confirmatory measurement approach is presented that enables delineation of the organizational constructs of interest from potential sources of measurement error in multiple informant reports.

A confirmatory composition model first specifies the relationship between measurements taken from multiple informants and organization-level indicators of organizational constructs. This model provides an explicit representation of the informants' perceptual agreement with respect to each measure, the bias in their responses due to their particular perspectives on the firm, and random measurement error. Measures which demonstrate significant perceptual agreement across informants are retained as organization-level indicators.

A confirmatory measurement model is then presented that relates the defined indicators to their posited underlying organizational constructs, with the constructs allowed to freely inter-correlate. Finally, a structural model relates the constructs to one another as specified by some theory. The structure model in conjunction with the measurement model permits a comprehensive assessment of the construct validity of the organizational properties.

An extension of the approach is also discussed where the assessment of commonalities and differences between different kinds of organizations with respect to some theoretical model is of interest. An illustration of the confirmatory approach is given, drawing upon data from a study of distributor firm and manufacturer firm working relationships.
Nonorthogonal Two-Dimensional Cutting Patterns
Authors: Rinnooy Kan A. H. G. , De Wit J. R. , Wijmenga R. Th.
Published: November 2008

The optimal way to cut a number of pieces from a reel is usually studied under the assumption that each piece has one of its sides parallel to the reel edge. If the material to be cut is homogeneous, it may be attractive to consider patterns in which certain pieces appear in an intermediate, tilted position. Certain properties of a class of such nonorthogonal cutting patterns axe derived that make it possible to allow for tilting in a simple manner. Substantial savings may thus be realised at the expense of a modest increase in computational effort.
Entry and Learning
Authors: Devinney Timothy M.
Published: November 2008

This paper shows the difficulties associated with discerning the impact of learning and pressures of competitive entry on the price and cost of production in commodity markets. It shows that the patterns of price and cost movements over time will be dramatically affected by the entry of new competitors. If firms possess U-shaped average cost curves, entry alone can generate price and cost declines which look like learning induced reductions. Alternatively, cost increases may occur even when learning is quite strong.

This research has dramatic managerial and empirical implications. Managers, operating in highly competitive environments subject to rapid entry, must put more emphasis on the role of their own day-to-day decisions in affecting cost. The fact that costs have declined may have nothing to do with learning but may be driven by their reactions to competitive pressures. Investigators empirically estimating learning curves must also be cognizant of the role entry plays in affecting cost. Simple comparisons of cost or price versus accumulated production, so common in applied studies, seriously confounds the role of entry and the consequent managerial decisions in determining accumulated production. It is argued that a more careful examination of entry needs to be taken into account when evaluating the role of learning and the estimating cost curves.
A Predictive Method of Teacher's Structure in China's University (1985–2000)
Authors: Ling Chen , Guozhong Pen
Published: November 2008

In this paper, a predictive model is designed to provide the Educational Department of China with the information necessary to draw up the program (1985–2000) for education development. This model contains two submodels, that is, the predictive model to the annual teacher's number of each title and the fuzzy predictive model to the annual teacher's number of each age. The first submodel is a Markov Chain model and the second submodel is a fuzzy predictive model. Before establishing the second submodel, the fuzzy set of judging indices for the promotion of teachers and the reasonable age's regions for the promotion of teachers for each title were stated and the fuzzy membership functions for every judging index were established by using the fuzzy statistical method. In this paper, a method is presented for establishing models. The predictive models are widely useful. Not only can the models be used in the educational departments, but they can also be used for making promotion policy in other administrative departments.
Batching to Minimize Flow Times on One Machine
Authors: Dobson Gregory , Karmarkar Uday S. , Rummel Jeffrey L.
Published: November 2008

Machine sequencing formulations typically assume that the characteristics of the job set to be processed are given. However, in many applications, jobs can be batched in different ways. Two types of minimum flow-time sequencing problems with lot sizing are formulated. The “item-flow” formulation is solved giving an index rule for ordering items. The “batch-flow” formulation is solved for the single product case showing that processing is done in unequal batches ordered in decreasing size. Heuristics and bounds are provided for the multiproduct case.
An Integer Programming Approach and Implementation for an Electric Utility Capacity Planning Problem with Renewable Energy Sources
Authors: Sherali Hanif D. , Staschus Konstantin , Huacuz Jorge M.
Published: November 2008

This paper presents an integer programming model and algorithm for an electric utility capacity expansion problem which considers the option of investing in nondispatchable or renewable energy sources. A branch-and-bound algorithm is proposed for this problem in which the continuous relaxation of the subproblem associated with each node in the enumeration tree is solved via an efficient two-phase procedure. This procedure solves a deterministic approximation of the problem in the first phase in order to determine a quick near-optimal solution. The resulting solution is subsequently refined in a second phase using more accurate techniques to represent the negative load due to the renewable sources, and to perform the probabilistic production costing. This technique conserves about 80% of the effort which would be required without the deterministic phase. An implementation of this approach is described for the Tijuana-Mexicali subsystem of the Mexican utility, which is not connected to the rest of the Mexican electric system, and which faces a very high summer peak load and a comparatively low winter load. The results suggest that along with a prescribed capacity expansion of conventional equipments, the utility should invest in some solar cooling systems, and, more pertinently, should involve itself intensely in conservation measures in homes of individual customers.
A Heuristic Procedure for the Layout of a Large Number of Facilities
Authors: Drezner Zvi
Published: November 2008

A new approach to the solution of the facilities layout problem on the plane is presented in this paper. A simple procedure that can replace the dispersion phase of DISCON is constructed. The result of the new method is a scatter diagram of the facilities on the plane that can be used by practitioners as guidelines for planning the layout. Since the method is simple and effective, large layout problems can be solved efficiently by it.
Note—A Note on Computing Optimal Control Limits for GI/M/1 Queueing Systems
Authors: Puterman Martin L. , Thomas Lyn C.
Published: November 2008

This note corrects an error in van Nunen and Puterman (van Nunen, J. A. E. E., M. L. Puterman. 1983. Computing optimal control limits for GI/M/s queueing systems with controlled arrivals. Management Sci. 29 725–734.) and extends some of their results to the average reward case.
An Optimal Design Problem for Limited Processor Sharing Systems
Authors: Yamazaki Genji , Sakasegawa Hirotaka
Published: November 2008

An optimal design problem is considered for processor-sharing service systems, where the number of customers served simultaneously is limited to a fixed finite number (called multiplicity). The decision variable is the multiplicity and the optimal criterion is to minimize the mean number of customers in the system, or, alternatively, to minimize the mean sojourn time for a customer. It is proved that the processor-sharing discipline with any multiplicity ameliorates the system performance if a service-requirement distribution is an NWU (new worse than used) type and deteriorates the performance if the distribution type is Erlangian. Moreover, it is conjectured through numerical results that the limited processor-sharing system will ameliorate (deteriorate) the performance if the coefficient of variation of the service-requirement distribution is larger (smaller) than 1.
A Model for Predicting Frequencies of Random Events
Authors: Rosenfield Donald
Published: November 2008

This paper presents a new technique for forecasting frequencies of events over time for individuals. The technique bases future occurrences on an estimation procedure based on historical data. The estimation procedure incorporates two types of uncertainty: population variation and individual propensity to change. An example is presented.
A Class of Utility Functions Containing all the Common Utility Functions
Authors: Brockett Patrick L. , Golden Linda L.
Published: November 2008

This paper presents a class of utility functions (class A∞) that contains all of the utility functions commonly used for mathematical modeling: the class consisting of those utility functions whose derivatives alternate in sign. A simple representation via mixtures of exponential utilities is provided for this class which is both mathematically convenient and conducive to functional operations. A connection with Laplace transforms and the resultant implications for preference relations, aggregation and utility assessment are discussed.
A Diffusion Theory Model of Adoption and Substitution for Successive Generations of High-Technology Products
Authors: Norton John A. , Bass Frank M.
Published: November 2008

This study deals with the dynamic sales behavior of successive generations of high-technology products. New technologies diffuse through a population of potential buyers over time. Therefore, diffusion theory models are related to this demand growth. Furthermore, successive generations of a technology compete with earlier ones, and that behavior is the subject of models of technological substitution. Building upon the Bass (Bass, F. M. 1969. A new-product growth model for consumer durables. Management Sci. 15(January) 215–227.) diffusion model, we develop a model which encompasses both diffusion and substitution. We demonstrate the forecasting properties of the model by estimating parameters over part of the data and projecting shipments for later periods.
Strategic Group Formation and Performance: The Case of the U.S. Pharmaceutical Industry, 1963–1982
Authors: Cool Karel O. , Schendel Dan
Published: November 2008

The focus of this paper is on three major questions: (1) what is the theoretical rationale for the strategic group concept?; (2) does strategic group membership have performance implications?; and (3) are strategic groups and membership in strategic groups stable characteristics of industries? A statistical procedure is proposed to longitudinally identify strategic groups. The empirical setting is the U.S. pharmaceutical industry over the period 1963–82. While performance differences are found in terms of market share, profitability differences between groups are not observed. Neither are differences found in terms of risk and risk-adjusted performance. These results are attributed to the existence of performance variation within each strategic group. A dynamic model of competitive repositioning is proposed which helps integrate the findings from the study.
Freezing the Master Production Schedule Under Rolling Planning Horizons
Authors: Sridharan V. , Berry William L. , Udayabhanu V.
Published: November 2008

The stability of the Master Production Schedule (MPS) is a critical issue in managing production operations with a Material Requirements Planning System. One method of achieving stability is to freeze some portion or all of the MPS. While freezing the MPS can limit the number of schedule changes, it can also produce an increase in production and inventory costs. This paper examines three decision variables in freezing the MPS: the freezing method, the freeze interval length, and the planning horizon length. Simulation experiment results are reported which suggest that freezing up to 50% of the planning horizon has a marginal effect on production and inventory cost under a wide range of operating conditions. These results also suggest that an order based freezing method produces superior results in comparison with a period based method.
Eliminating Inventory in a Series Facility Production System
Authors: Zangwill Willard I.
Published: November 2008

Zero inventory (ZI) and the related concepts of Just in Time and Kanban are innovative and powerful means to improve production efficiency. This paper applies these concepts to a series facility production system and, in particular, identifies which facilities will never hold inventory irrespective of product demand. Pinpointing beforehand that certain facilities will have no inventory can simplify such strategic decisions as facility design, site location, and space utilization, plus it eases production scheduling. Next, a procedure is developed which increases the number of facilities that will never hold inventory. This procedure implements the ZI philosophy of cutting set up costs to increase efficiency.

The results of this paper impact three major areas of production research: (1) strategy and planning—by detecting beforehand facilities that need never hold inventory irrespective of demand; (2) operations—by simplifying day to day production scheduling; and (3) productivity improvement—by cutting set up costs to enhance efficiency.
Developing Competitive Strategies for Buyer-Supplier Negotiations
Authors: Bard Jonathan F.
Published: November 2008

Using differential game theory, a model is developed to analyze the dynamics accompanying buyer-supplier negotiations. Two cases are examined: the first supposes that the players bargain cooperatively and try to reach Pareto-optimal solutions; the second assumes a noncooperative atmosphere and seeks out Nash equilibria. Although the latter are not necessarily efficient, they do provide a measure of stability, and hence may be considered a conservative strategy. In either case, the buyer and supplier are bargaining over n issues with a view toward minimizing their individual costs. These costs are represented by a linear combination of the terminal offer or bid, and the cumulative losses incurred during the negotiating process. In the analysis, closed form solutions are obtained for a variety of structural and behavioral assumptions. For certain Nash equilibria it is shown that agreement is reached on all issues simultaneously. The results can be used to evaluate the performance of different strategies, as well as check for suboptimality.
Optimal Advertising Policies for Diffusion Models of New Product Innovation in Monopolistic Situations
Authors: Dockner Engelbert , Jørgensen Steffen
Published: November 2008

This paper deals with the determination of optimal advertising strategies for new product diffusion models. We consider the introduction of a new consumer durable in a monopolistic market and the evolution of sales is modelled by a flexible diffusion model. Repeat sales and possible entry of rivals are disregarded but we allow for discounting of future revenue streams and cost learning curve. Using standard methods of optimal control theory we characterize qualitatively the structure of an optimal advertising strategy for different versions of the diffusion model.
Perturbation Analysis Gives Strongly Consistent Sensitivity Estimates for the M/G/1 Queue
Authors: Suri Rajan , Zazanis Michael A.
Published: November 2008

The technique of perturbation analysis has recently been introduced as an efficient way to compute parameter sensitivities for discrete event systems. Thus far, the statistical properties of perturbation analysis have been validated mainly through experiments. This paper considers, for an M/G/1 queueing system, the sensitivity of mean system time of a customer to a parameter of the arrival or service distribution. It shows analytically that (i) the steady state value of the perturbation analysis estimate of this sensitivity is unbiased, and (ii) a perturbation analysis algorithm implemented on a single sample path of the system gives asymptotically unbiased and strongly consistent estimates of this sensitivity. (No previous knowledge of perturbation analysis is assumed, so the paper also serves to introduce this technique to the unfamiliar reader.) Numerical extensions to GI/G/1 queues, and applications to optimization problems, are also illustrated.
Analyzing Simulation Experiments with Common Random Numbers
Authors: Kleijnen Jack P. C.
Published: November 2008

To analyze simulation runs which use the same random numbers, the blocking concept of experimental design is not needed. Instead, this paper applies a linear regression model with a nondiagonal covariance matrix. This covariance matrix does not need to have a specific pattern such as constant covariances. A simple example yields surprising results. The paper proposes a new framework for the error analysis. This framework consists of three factors (namely, common random numbers, replication, model validity), each with three levels.
Comparative Invention Performance of Major Industrial Countries: Patterns and Explanations
Authors: Glismann Hans H. , Horn Ernst-Jürgen
Published: November 2008

The paper presents an analysis of invention performance, as measured by patenting activities, of six countries (France, Italy, Japan, United Kingdom, USSR, West Germany) relative to the United States for 41 SIC industries over the past 20 years. It turns out that non-U.S. countries as a group have increased their (relative) invention performance in all fields of technology, including high technology fields. In a second step hypotheses which can be supposed to explain the relative decline of the United States' patenting activities are discussed and tested. There is strong evidence that catching up processes contributed most to the relative decrease of the United States; there is only little evidence that government interventions regarding research and development activities have had counterproductive effects on invention performance.
The Adoption of the M-Form Organizational Structure: A Test of Imitation Hypothesis
Authors: Mahajan Vijay , Sharma Subhash , Bettis Richard A.
Published: November 2008

The study of organizational adoption of administrative innovations has been generally guided by the imitation hypothesis. This hypothesis states that, within a relevant population of firms, an innovation is first adopted by a select few innovators who communicate and influence others to adopt it resulting in a predictable diffusion pattern. Using data on the adoption of the M-form organizational structure, this paper reexamines this hypothesis. Based on the reported results, we cannot reject the null hypothesis that organizational adoption of administrative innovations is characterized by a white-noise process. This result brings into question the appropriateness of the imitation hypothesis. Limitations and implications of the results are discussed.
Reduced System Algorithms for Markov Chains
Authors: Lal Ram , Bhat U. Narayan
Published: November 2008

A reduced system is a smaller system derived in the process of analyzing a larger system. In solving for steady state probabilities of a Markov chain, generally the solution can be found by first solving a reduced system of equations which is obtained by appropriately partitioning the transition probability (or rate) matrix. Following Lal (Lal, R. 1981. A unified study of algorithms for steady state probabilities in Makov chains. Ph.D. Dissertation, Department of Operations Research and Engineering Management, School of Engineering and Applied Sciences, Southern Methodist University, Dallas, TX 75275.), a Markov chain can be categorized as standard or nonstandard depending on the location of an invertible submatrix necessary for an efficient solution in a transition probability (or rate) matrix. In this paper, algorithms for the determination of steady state probabilities are developed by using (i) a backward recursion which is efficient for standard systems and (ii) a forward recursion which is efficient for nonstandard systems. It is also shown that the backward recursion can be used for finding the first passage time distribution and its mean and variance.
Multiple Shift Workforce Lower Bounds
Authors: Koop Gerald J.
Published: November 2008

Previous lower bounds on workforce size have been derived from the consideration that the number of working shifts which can be provided by the workers over a given period of time must be at least as large as the number of working shifts required by the staffing demands over that period. None of those bounds incorporates the effect of constraints on the changing of shifts in a multiple shift manpower scheduling problem. This paper utilizes a network model of the problem to model its multiple shift aspect and provide new lower bounds on workforce size. For some common special cases of constraints these lower bounds can be calculated by band. For some common special cases of demands the multiple shift lower bounds degenerate to the single shift lower bounds.
Managerial Influence in the Implementation of New Technology
Authors: Leonard-Barton Dorothy , Deschamps Isabelle
Published: November 2008

In the implementation of an organizational innovation, managers are usually presumed to influence the extent to which the innovation is adopted and used by their subordinates. However, the findings presented in this paper suggest that the managerial influence is not equally perceived by all subordinates. Rather, certain context-specific characteristics of individual employees mediate the managerial influence. Users of the expert system studied herein who were low in personal innovativeness toward this class of innovations, for whom the subjective importance of the task being computerized was low, whose task-related skills were low or who were low performers in their sales job—all these user groups perceived their management had encouraged them to adopt. In contrast, users who rated high on any of these measures did not perceive any management influence in their adoption decision. Moreover, although access to the innovation was in fact highly similar for all users, high performers also were inclined to perceive the system as more accessible than were low performers. These findings suggest that the diffusion of an innovation within an organization perhaps could be viewed as a two-step managerial process. Employees whose characteristics incline them to adopt an innovation will do so without management support or urging if it is simply made available. Employees low on these characteristics will await a managerial directive before adopting. Implications for future research are discussed.
Note—Can a Reduction in Set Up Costs Indeed Increase Total Costs?
Authors: Gerchak Yigal
Published: November 2008

Zangwill (Zangwill, W. I. 1987. From EOQ towards ZI. Management Sci. 33 1209–1223.) has constructed an example which purports to show that reducing set up costs can increase total cost. We show that this happened as a result of restricting the policies to be of a “greedy” nature. The expected cost of truly optimal policies is shown not to increase.
Rejoinder—Rejoinder to the Note by Yigal Gerchak
Authors: Zangwill Willard I.
Published: November 2008

Gerchak's note further elaborates on an example in my paper “From EOQ Towards ZI” (Zangwill, W. I. 1987. From EOQ towards ZI. Management Sci. 33 1209–1223.). My example is correct. His example is correct also, and I was aware of examples of his type when I wrote the paper as were the referees when they reviewed it. His example makes several additional assumptions which totally change the situation and indeed the viewpoint of reality.
Erratum to: Sharp Bounds and Simple Approximations for the Erlang Delay and Loss Formulas
Authors: Harel Arie
Published: November 2008

Erratum to Sharp Bounds and Simple Approximations for the Erlang Delay and Loss Formulas (Vol. 34, No. 8 (August 1988), pp. 959–972.)
Competitive Dealing Strategy and Deal Value Escalation
Authors: Fraser Cynthia , Ginter James L.
Published: November 2008

This note is an extension of “A Mathematical Model for Price Promotions” (Kinberg, Rao and Shakun [Kinberg, Yoram, Ambar G. Rao, Melvin F. Shakun. 1974. A mathematical model for price promotions. Management Sci. 20 948–959.]). That paper derived the revenue maximizing deal value for a firm in a monopolistically competitive, price (quality) partitioned market having two premium brands and consumers whose responses to deals are heterogeneous. This “optimal” deal value was derived under the assumed condition of no competitive dealing. When competitive dealing was considered, both dealing brands were assumed to offer the same “optimal” deal value. By extending the work of KRS to include a number of competitors sufficiently large that at least one is dealing in each period, this paper shows that a reactive dealing strategy based on a single “optimal” deal value produces negative profits and will not produce a stable equilibrium.
A Light-Traffic Approximation for Single-Class Departure Processes from Multi-Class Queues
Authors: Whitt Ward
Published: November 2008

This paper discusses an approximation for single-class departure processes from multi-class queues: If the arrival rate of one class upon one visit to the queue is a small proportion of the total arrival rate there, then the departure process for that class from that visit should be nearly the same as the arrival process for that class for that visit. This can be regarded as a light-traffic approximation, but only the one class must be in light traffic; the overall traffic intensity of the queue need not be low. As a consequence, in a queueing network if the routing for one class is deterministic, and if the light-traffic condition applies at every queue this class visits, then the arrival and departure processes for this class at each visit to each queue should be nearly the same as its external arrival process. This approximation is explained in terms of different time scales, and is justified here by a limit theorem in a special case. There are important implications for parametric decomposition approximation techniques: the variability parameter partially characterizing the departure process at any visit to any queue of such a low-intensity class should be nearly the same as the variability parameter partially characterizing the arrival process for that class at that visit to that queue. The approximation principle in this form was recently proposed by G. Bitran and D. Tirupati while developing improved parametric-decomposition approximations for low-variability multi-class queueing networks with deterministic routing, which have important, applications in manufacturing. The approximation principle also has important implications for data networks showing how burstiness in originated traffic can pass through heavily shared network facilities where it has relatively little effect and then reappear at the destination.
Inducing Rules for Expert System Development: An Example Using Default and Bankruptcy Data
Authors: Messier William F. , Hansen James V.
Published: November 2008

With rapidly growing interest in the development of knowledge-based computer consulting systems for various problem domains, the difficulties associated with knowledge acquisition have special importance. This paper reports on the results of experiments designed to assess the effectiveness of an inductive algorithm in discovering predictive knowledge structures in financial data. The quality of the results are evaluated by comparing them to results generated by discriminant analysis, individual judgments, and group judgments. A partial intersection of predictive attributes occurs. More importantly, for all cases tested, the inductively produced knowledge structures perform better than the competing models.
One-Switch Utility Functions and a Measure of Risk
Authors: Bell David E.
Published: November 2008

Consider the relative attractiveness to a decision maker of two financial gambles as the wealth of that individual varies. It may seem reasonable that either one alternative should be preferred for all wealth levels or that there exists a unique critical wealth level at which the decision maker switches from preferring one alternative to the other. Decreasing risk aversion is not sufficient for this property to hold: we identify the small class of utility functions for which it does. We show how the property leads naturally to a measure of risk.

The results of this paper apply equally well to discounting functions for cash flows: one-switch discount functions permit at most one change in preference between cash flows as all payoffs are deferred in time.
Approximating Expected Warranty Costs
Authors: Frees Edward W. , Nam Seong-Hyun
Published: November 2008

In this paper, we survey a portion of the literature in the analysis of warranty costs. In order to compare the price of different warranty policies, we review a framework which leads to expressing the expected costs in terms of complex functions arising in renewal theory. These functions and several approximations are discussed. In particular, a straight line approximation performs well.
Frames of Mind in Intertemporal Choice
Authors: Loewenstein George F.
Published: November 2008

Recent research has demonstrated that choices between gambles are systematically influenced by the way they are expressed. Kahneman and Tversky's Prospect Theory (Kahneman, D., A. Tversky. 1979. Prospect theory: An analysis of decision under risk. Econometrica 47(2) 363–391.) explains many of these “framing” effects as shifts in the point of reference from which prospects are evaluated. This paper demonstrates the applicability of the reference point concept to intertemporal choice. Three experiments demonstrate that when people choose between immediate and delayed consumption, the reference point used to evaluate alternatives can significantly influence choice. The first study elicited relative preference for immediate and delayed consumption using three methods, each of which differently framed choices between alternatives offering identical end-state consumption. The conventional discounted utility model predicts that the three methods of elicitation should yield similar estimates of time preference, but preferences were found to differ in accordance with a reference point model. The second and third studies extend and replicate the results from the first, the third using real rather than hypothetical choices.
Minimum Spillage Sequencing
Authors: Tovey Craig A. , Weiss Gideon , Wilson James R.
Published: November 2008

The minimum spillage sequencing problem, which arises in real-time satellite signal data processing, requires a set of numbers to be arranged so as to minimize the “overflow” of the partial sums above an upper bound. We subject several heuristics to worst-case analysis, average-case analysis, and computational testing. The results demonstrate that the problem, though NP-hard, can be handled effectively. One of the highlights of the analysis is a tight upper bound on the fraction of overflow when the problem is solved to optimality, together with an O(n log n) “safe” heuristic which never exceeds this bound.
Piecewise-Linear Approximation Methods for Nonseparable Convex Optimization
Authors: Feijoo B. , Meyer R. R.
Published: November 2008

An algorithm is described for the solution of nonseparable convex optimization problems. This method utilizes iterative piecewise-linear approximation of the nonseparable objective function, but requires function values only along a translated set of axes, thereby avoiding the curse of dimensionality commonly associated with grid methods for multi-dimensional problems. A global convergence proof is given under the assumptions that the objective function is Lipschitz continuous and differentiable and that the feasible set is convex and compact. The method is well-suited to linearly constrained large-scale optimization, since the direction-finding problems reduce to linear programs of manageable size. It is particularly appropriate for nonlinear networks, since it preserves the network structure of the constraints. In addition, because the resulting objective function approximation is separable, this approach permits for certain problem classes a decomposition that may be exploited for parallel computation. Some numerical results on the CRYSTAL multicomputer are presented to illustrate this decomposition feature.
The Effects of Splitting Attributes on Weights in Multiattribute Utility Measurement
Authors: Weber Martin , Eisenführ Franz , von Winterfeldt Detlof
Published: November 2008

This study examined how weights in multiattribute utility measurement change when objectives are split into more detailed levels. Subjects were asked to weight attributes in value trees containing three objectives which were specified by either three, four, five, or six attributes. The robust finding was that the more detailed parts of the value tree were weighted significantly higher than the less detailed ones. This overweighting bias was found for several weighting techniques, but the techniques that used holistic judgments to derive weights were affected somewhat less than techniques that used decomposed attribute weights. This bias is interpreted in terms of the increased salience and availability of attributes that are spelled out in more detail.
Optimal Order of Servers for Tandem Queues in Light Traffic
Authors: Greenberg Betsy S. , Wolff Ronald W.
Published: November 2008

We study single-server stations in tandem, in which customers arrive according to a Poisson Process and are to be served at each of two servers. The order of the stations is assumed not to affect the quality of the service customers obtain. Using a light traffic approximation, we select (for various joint distributions of service time) the order of the stations that minimizes expected customer delay.
The Relationship Between Shareholding Concentration and Shareholder Voting Power in British Companies: A Study of the Application of Power Indices for Simple Games
Authors: Leech Dennis
Published: November 2008

This paper reports an analysis of the relationships between shareholding and voting power distributions in a sample of British companies. It applies two standard approaches to the measurement of power in simple games: the Shapley-Shubik and the Banzhaf power indices. The results indicate that power is more concentrated than ownership in every case. A comparison of the two indices reveals that typically the Banzhaf index gives a more concentrated power distribution. For the Shapley-Shubik index the power ratio for the largest shareholder is accurately described in terms of the size of holding and the concentration of the remainder. The corresponding Banzhaf power ratio is less dependent on these variables. There is no association between power concentration and company size.
A Simple Method of Computing Prediction Intervals for Time Series Forecasts
Authors: Gardner Everette S.
Published: November 2008

Theoretical approaches to computing prediction intervals require strong assumptions that do not appear to hold in practice. This paper presents an empirical approach to prediction intervals that assumes very little. During model-fitting, variances of the errors are computed at different forecast leadtimes. Using these variances, the Chebyshev inequality is applied to determine prediction intervals. Empirical evidence is presented to show that this approach gives reasonable results. For example, using the 111 series in the M-competition, 95% prediction intervals actually contain 95.8% of post-sample observations.
Strategic Implications of Darwinian Economics for Selling Efficiency and Choice of Integrated or Independent Sales Forces
Authors: Anderson Erin
Published: November 2008

Most managers, when confronted with a difficult strategic decision, would like to know what is the prevailing practice in their industry. Prevailing practice interests managers, in part, because it may indicate which decisions are good, even “best.” The rationale is “Darwinian economics,” which proposes that competitive markets operate to force at least an approximation of optimal behavior, because “wrong” decisions are extinguished by the market mechanism. If so, the bulk of survivors make good business decisions and their collective practice is worth knowing, meaning it should be difficult to improve upon. This paper tests whether prevailing practice represents “good” decisions. The context is the decision whether to fill a sales district with a company (integrated) sales force or with outside agents (independents). The outcome of the choice is the ratio of sales to the cost of running the sales force, i.e., selling efficiency. A model is described which summarizes industry decisions, and two propositions are developed. Proposition 1, a simple version, states that efficiency declines as firms depart from the industry rule as to when they should integrate. Proposition 2, a contingent version, states that efficiency declines as firms depart from the industry rule in unpredictable selling environments but that conforming to the rule has no impact in predictable environments. The rationale is that firms learn the environment well enough to know when to depart from the rule in predictable settings but not otherwise. The relationship between efficiency and conformity to prevailing practice is examined for 93 sales districts of 11 recognized electronic component manufacturers. The results support proposition 2: the most efficient sales forces conform to prevailing practice and the least efficient deviate, but only in uncertain environments. In more certain environments, conformity and efficiency are unrelated. Implications (such as when it pays to be different) and suggestions for future research are discussed.
Long Range Process Design and Compatibility Among Operations
Authors: Singhal Jaya , Singhal Kalyan , Weeks James K.
Published: November 2008

Most processes consist of several operations. Some or all of these operations may have more than one alternative technological method, resulting in an exponential relationship between the number of possible designs and the number of operation alternatives. However, some of these designs may not be feasible because of incompatibilities among operation alternatives. A feasible process design will include one alternative for each operation in such a way that each operation is compatible with every other operation in the design. For identifying these feasible designs, there are two approaches: traditional and morphological. The former relies on trial-and-error, expert judgment, and creative thinking and the latter considers, explicitly or implicitly, every possible design. This paper presents an efficient algorithm with computational results for identifying all feasible designs based on compatibility considerations. The implementation issues, both computational and organizational, are discussed as integral parts of a framework for process design efforts. This framework combines the advantages of both the traditional and morphological approaches and mitigates their disadvantages. It also facilitates interaction between the expert's judgment and the programmed model.
Decision Analysis: Practice and Promise
Authors: Howard Ronald A.
Published: November 2008

Decision analysis stands on a foundation of hundreds of years of philosophical and practical thought about uncertainty and decision-making. The accomplishments and promise of the field are impressive, yet it has not become commonplace even in very important decisions. While human nature may pose an ultimate limitation, maintaining clarity of concept and exploiting progress in the realms of scope, skill, and efficiency should lead to more widespread use.

A central conceptual distinction is that between normative and descriptive views of decision-making. We discuss the importance of maintaining this distinction in the face of attempts to compromise.

The procedures for formulating, eliciting, evaluating, and appraising the decision problem are all experiencing major improvements. The strategy-generation table helps in finding creative alternatives. Decision quality concepts permit us to assure both effectiveness and efficiency in analyzing decision problems. The influence diagram provides new clarity to the conversation between decision-maker and analyst, allowing representations that are both easily understandable and mathematically consistent. The clarity test makes sure we know what we are talking about regardless of what we are saying about it. Direct and indirect values illuminate preferences. Generic risk attitude considerations indicate how to relate corporate risk tolerance to the financial measures of the corporation. Spreadsheet, decision tree, and influence diagram programs speed evaluation. Intelligent decision systems realized in computers offer promise of providing the benefits of decision analysis on a broader scale than ever before. Decision analysis is now poised for a breakthrough in its usefulness to human beings.
Forecasting with a Repeat Purchase Diffusion Model
Authors: Rao Ambar G. , Yamada Masataka
Published: November 2008

A methodology for forecasting the sales of an ethical drug as a function of marketing effort before any sales data are available and for updating the forecast with a few periods of sales data is presented. Physicians' perceptions of the drug on a number of attributes, e.g. effectiveness, range of ailments for which appropriate, frequency of prescriptions, are used to estimate the parameters of a model originally proposed by Lilien, Rao and Kalish (Lilien, G. L., A. G. Rao, S. Kalish. 1981. Bayesian estimation and control of detailing effort in a repeat purchase diffusion environment. Management Sci. 27(May) 493–506.). This model conceptualizes the drug adoption process as a repeat purchase diffusion model; sales are expressed as a function of a drug's own and competitive marketing efforts and of word of mouth. The model is first validated in this paper via predictive testing on 19 drugs prescribed by three types of physicians. The forecasting methodology is illustrated using physicians' perceptions on these drugs. Forecasts obtained without any sales data, and updated forecasts using seven periods of sales data are presented, and are encouraging.
A Transportation Problem in Which Costs Depend on the Order of Arrival
Authors: Denardo Eric V. , Rothblum Uriel G. , Swersey Arthur J.
Published: November 2008

This paper describes a problem in which the “cost” of satisfying the demand at a particular location is a weighted average of the travel times for the items that are supplied. The greatest weight is given to the first-arriving item, with decreasing weights given to each succeeding item. In the case of known demand, the problem is transformed into an equivalent transportation problem. In the case of stochastic demand, the problem is transformed into a transportation problem whose objective is to minimize the sum of a linear function and a convex function of the sum of the flows on selected arcs. This problem is linearized by substituting for the convex function the product of a parameter and a linear term. The parameterized problem is solved by parametric linear programming and by “updating the slope.”