bluuebunny/crossref_metadata_2025 huggingface dataset:
Resource-Constrained Project Scheduling with Time-Resource Tradeoffs: The Nonpreemptive Case
Authors: Talbot F. Brian
Published: November 2008

This paper introduces methods for formulating and solving a general class of nonpreemptive resource-constrained project scheduling problems in which the duration of each job is a function of the resources committed to it. The approach is broad enough to permit the evaluation of numerous time or resource-based objective functions, while simultaneously taking into account a variety of constraint types. Typical of the objective functions permitted are minimize project duration, minimize project cost given performance payments and penalties, and minimize the consumption of a critical resource. Resources which may be considered include those which are limited on a period-to-period basis such as skilled labor, as well as those such as money, which are consumed and constrained over the life of the project. At the planning stage the user of this approach is permitted to identify several alternative ways, or modes, of accomplishing each job in the project. Each mode may have a different duration, reflecting the magnitude and mix of the resources allocated to it. At the scheduling phase, the procedure derives a solution which specifies how each job should be performed, that is, which mode should be selected, and when each mode should be scheduled. In order to make the presentation concrete, this paper focuses on two problems: given multiple resource restrictions, minimize project completion time, and minimize project cost. The latter problem is also known as the resource-constrained time-cost tradeoff problem.

Computational results indicate that the procedures provide cost-effective optimal solutions for small problems and good heuristic solutions for larger problems. The programmed solution algorithms are relatively simple and require only modest computing facilities, which permits them to be potentially useful scheduling tools for organizations having small computer systems.
Priority Scheduling Rules for Repairable Inventory Systems
Authors: Hausman Warren H. , Scudder Gary D.
Published: November 2008

Improved priority scheduling rules are presented for a repair shop supporting a multi-item repairable inventory system with a hierarchical product structure. A variety of scheduling rules are evaluated using a simulation of a representative shop and product structure. The results indicate that dynamic rules which use inventory status information perform better than other dynamic or static rules which ignore inventory status; moreover, dynamic rules which use work-in-process inventory information outperform dynamic rules which ignore work-in-process inventory levels. In the simulation, the use of improved scheduling rules provides performance equivalent to a 20% reduction in spares inventory.
Parametric Mixed Integer Programming: An Application to Solid Waste Management
Authors: Jenkins Larry
Published: November 2008

A method is developed for carrying out parametric analysis on a mixed integer linear program (MILP) as either objective function coefficients or right-hand-side values of the constraints are varied continuously. The method involves solving MILPs at point values of the parameters of variation and joining the results by LP parametric analysis.

The procedure for parametric analysis on the objective function can be continued until a theoretical result proves that the analysis is complete. However, a heuristic rule that is presented may greatly reduce the number of individual MILPs that have to be solved and thus reduce the total computational effort. The rule assumes that if the same values of the integer variables are optimal at two different values of the change parameter, these same integer variable values will also be optimal at all intermediate parameter values. If the rule is applied, a complete parametric analysis requires solving 2n different MILPs, where n is the number of different sets of optimal integer variable values found. We determine the savings in number of MILPs solved using the heuristic rule compared to continuing the procedure to obtain theoretical proof of completeness. The paper also proposes various possible “advanced start” aids for solving the individual MILPs.

Previously there has existed no method that could be used to perform continuous right-hand-side parametric analysis on an MILP of realistic size. A heuristic rule presented here makes possible such an analysis. The procedure again requires solving 2n different MILPs.

The procedures for both objective function and right-hand-side analysis can be implemented using any software that can solve MILPs and perform LP parametric analysis. Computational results are reported using commercially available packages. The procedures are applied to a large fixed-charge model that was developed to analyze where to locate resource recovery plants in Southeastern Ontario. In that model it was essential to consider very wide variation in values of the parameters related to resource recovery. It was found that the results of the parametric analyses could be distilled into clear recommendations regarding which plants to build if a resource recovery policy is implemented.
Aggregate Safety Stock Levels and Component Part Commonality
Authors: Collier David A.
Published: November 2008

The relationship between aggregate safety stock inventory levels and component part commonality is developed. A simulation experiment strongly supports the functional form of this relationship in an uncertain operating environment.

Managers can use these equations to assess the trade-offs between aggregate safety stock levels, service level and the degree of component part standardization. For example, these relationships can be used to predict service, inventory level and cost standards for any change in component part commonality.
Note—A Multiple-Item Inventory Model with a Job Completion Criterion
Authors: Graves Stephen C.
Published: November 2008

Most office equipment is maintained by service organizations consisting of teams of service representatives. An important problem for the service organizations is the determination of the spare parts inventory to be carried by each service representative. This note presents a model for finding the spare parts kit that has the minimum inventory investment for a specified job completion criterion. The model is shown to be equivalent to a binary knapsack problem. The model is contrasted with the model developed by Smith, Chambers and Shlifer for a similar problem.
Note—On the Optimality of Integer Lot Size Ratios in “Economic Lot Size Determination in Multi-Stage Assembly Systems”
Authors: Williams Jack F.
Published: November 2008

The proof of a well known theorem by Crowston and Wagner in Crowston, Wagner, and Williams (Crowston, W. B., M. H. Wagner, J. F., Williams. 1973. Economic lot size determination in multi-stage assembly systems. Management Sci. 19 (5, January) 517–527.) is shown here to be defective. According to this theorem, an optimal solution to the batch size determination problem for multi-echelon production/inventory assembly structures is characterized by a set of lot sizes, such that the lot size at each stage must be an integer multiple of the lot size at its successor stage. The theorem has been said to apply to uncapacitated assembly systems having constant final product demand over an infinite horizon, with no backlogs or lost sales permitted, where lot sizes must be rational numbers and time invariant. While the theorem supposedly applied to the case of both finite production rates and infinite production rates, the proof dealt only with the case of instantaneous production. Also, the proof implicitly assumed that lots were processed at any given stage only after unchanging spans of time. In this paper we show that with or without this implicit assumption, the theorem does hold true for the special case of instantaneous processing in two-level assembly systems; that is, configurations where there is only one successor stage in the entire system. However, we also show by counterexample that without this implicit assumption, the theorem is invalid for more general assembly structures. Furthermore, in the appendix of this paper we show that the proof is defective at the point where Crowston and Wagner extend their results for two-level systems to more general assembly systems. Thus it is an open question whether or not the theorem is valid for all assembly structures when processing at any given stage must occur only after unchanging spans of time.
The Calculation of Minimum Margin
Authors: Rudd Andrew , Schroeder Mark
Published: November 2008

The calculation of margin for investor's option accounts is a complex and costly problem for brokerage houses. The existing procedures usually involve a heuristic requiring sequential computations. These are shown to be inefficient and suboptimal. A simple transportation formulation is presented which permits a direct computation of minimum margin and shows considerable savings when compared with existing heuristic procedures.
Policy as Argument—A Logic for Ill-Structured Decision Problems
Authors: Mitroff Ian I. , Mason Richard O. , Barabba Vincent P.
Published: November 2008

This paper presents a new framework for handling ill-structured decision problems. The framework derives from recent developments in the logic of argumentation. It shows how policy statements may under certain conditions be construed as the outcome of a complex process of argumentation.

The framework is especially suited to ill-structured decision problems since it is capable of handling explicit contradictions and missing parts in an argument structure. It is also shown by means of a new concept—plausibility—how it is possible to locate the weakest links in a complex argument. A major consequence of the concept of plausibility is that it is possible under certain conditions to transform a problem in the logic of argumentation (i.e., symbolic logic) into one of algebra (i.e., linear programming).
Note—Multiplicative Interval Variation of Objective Function Coefficients in Linear Programming
Authors: McKeown Patrick G. , Minch Roland A.
Published: November 2008

Traditional sensitivity analysis of linear programming objective function coefficients concerns itself with variations in single parameters. In a recent book, Gal developed a theoretical framework to determine the effect of multiple variations in the parameters. In this paper, we develop a methodology to implement and extend the theoretical results in the earlier work for interval variations of objective function coefficients. This methodology uses necessary and sufficient conditions to determine all optimal solutions to the linear programming problem for objective function coefficients within given intervals. The resulting procedure has been coded for computer use and tested on various types of test problems. Computational results and an example are presented.
Subjective Probability and the Theory of Games
Authors: Kadane Joseph B. , Larkey Patrick D.
Published: November 2008

This paper explores some of the consequences of adopting a modern subjective view of probability for game theory. The consequences are substantial. The subjective view of probability clarifies the important distinction between normative and positive theorizing about behavior in games, a distinction that is often lost in the search for “solution concepts” which largely characterizes game theory since the work of von Neumann and Morgenstern. Many of the distinctions that appear important in conventional game theory (two-person versus n-person, zero-sum versus variable sum) appear unimportant in the subjective formulation. Other distinctions, such as single play versus repetitive-play games, appear to be more important in the subjective formulation than in the conventional formulation.
Comment—Subjective Probability and the Theory of Games: Comments on Kadane and Larkey's Paper
Authors: Harsanyi John C.
Published: November 2008

The normative solution concepts of game theory try to provide a clear mathematical characterization of what it means to act rationally in a game where all players expect each other to act rationally. Kadane and Larkey reject the use of these normative solution concepts. Yet, this amounts to throwing away an important piece of information to the effect that the players are rational and expect each other to be rational. Even in situations where the players do not expect each other to act with complete rationality, normative game theory can help them heuristically to formulate reasonable expectations about the other players' behavior.
Reply to Professor Harsanyi
Authors: Kadane Joseph B. , Larkey Patrick D.
Published: November 2008

Reply to Harsanyi, J. C. 1982. Comment—Subjective probability and the theory of games: comments on Kadane and Larkey's paper. Management Sci. 28 (2) 120–124.
On Poisson Approximations for Superposition Arrival Processes in Queues
Authors: Albin S. L.
Published: November 2008

We report on simulations of ΣiGIi/M/1 queues; the arrival process is the superposition (sum) of up to 1024 i.i.d. renewal processes and there is a single exponential server. As one might anticipate, the simulation estimate of the expected number of customers in a ΣiGIi/M/1 queueing system approaches the expected number in an M/M/1 queueing system as the number of arrival processes, n, increases. However, for a given n, the difference between the expected numbers in the M/M/1 and ΣiGIi/M/1 queueing systems dramatically increases as the traffic intensity increases from ρ = 0.5 to ρ = 0.9. This difference is approximated by a formula which is a function of the traffic intensity, the number of component arrival processes and the squared coefficient of variation of the component interarrival times.
An Experimental Comparison of Different Approaches to Determining Weights in Additive Utility Models
Authors: Schoemaker Paul J. H. , Waid C. Carter
Published: November 2008

Several studies this past decade have examined differences between holistic and decomposed approaches to determining weights in additive utility models. Some have argued that it matters little which procedure is used, whereas others strongly favored particular methods. In this paper we address this controversy experimentally by comparing five conceptually different approaches in terms of their weights and predictive ability. The five methods are (1) multiple linear and non-linear regression analyses of ten and fifteen holistic assessments, (2) direct decomposed tradeoffs as proposed by Keeney and Raiffa (Keeney, R. L., H. Raiffa. 1977. Decisions with Multiple Objectives. Wiley, New York.), (3) a recent eigen-vector technique of Saaty (Saaty, T. L. 1977. A scaling method for priorities in hierarchical structures. J. Math. Psych. 15 (3) 234–281.) involving redundant pairwise comparisons of attributes, (4) a straightforward allocation of hundred importance points, and (5) unit weighting (i.e., equal weighting after standardizing the attributes).

The decision task involved college admissions. Subjects were asked to evaluate hypothetical college applicants on the basis of verbal SAT, quantitative SAT, high-school grade point average, and a measure of extra-curricular activity. Linear as well as nonlinear attribute utility functions were used in constructing the additive models. The nonlinear functions were specified graphically by the subjects through selection from five different shapes (i.e., one per attribute).

To test the predictive ability of the various models, each subject made twenty separate pairwise comparisons of alternatives (including direction and strength of preference). The prediction criteria were percentage correct predictions as well as correlations (using these twenty pairs). Seventy subjects were tested, using an (order-controlled) within-subject design, in comparing the different methods of weight determination. Monetary incentives were used to enhance motivation.

In terms of findings, the methods generally differed systematically concerning the weights given to the various attributes, as well as the variances of the resulting predictions. On average, however, the methods predicted about equally well, except for unit weighting which was clearly inferior. The findings differ in this regard from the general literature. Furthermore, nonlinear models were found to be inferior to linear ones. Finally, subjects judged the methods to differ significantly in difficulty and trustworthiness, which were found to correlate inversely. The overall results raise various applied and theoretical issues, which are discussed.
Cost-Benefit Models for Explaining Consumer Choice and Information Seeking Behavior
Authors: Ratchford Brian T.
Published: November 2008

While it provides excellent descriptions of behavior, existing consumer research on information seeking and processing largely fails to explain why consumers engage in various types of activities. This paper presents an economic framework for measuring costs/benefits of search behavior which can help to resolve these questions. This work shows how such a framework can lead to testable hypotheses about information seeking, and discusses how operational measures of economic incentives to search can be developed and employed.
A Simple Algorithm for Optimal Portfolio Selection with Fixed Transaction Costs
Authors: Patel Nitin R. , Subrahmanyam Marti G.
Published: November 2008

The general optimal portfolio selection problem with fixed transaction costs is a complex mathematical programming problem. However, by placing reasonable restrictions on the variance-covariance matrix of returns, it is possible to simplify the solution of the problem. Specifically if the structure of returns between securities is such that the pairwise correlation coefficients are approximately the same, a fairly simple algorithm which requires little computational effort can be employed. This method can also be extended to the case where changes in the information set necessitate a revision of an existing portfolio.
An Algorithm for the Initial Dispatch of Fire Companies
Authors: Ignall E. , Carter G. , Rider K.
Published: November 2008

In response to an incoming fire alarm, someone must decide how many and which engine and ladder companies (firefighters and their apparatus) to dispatch to the scene. Traditional dispatching policies assume that all of the designated companies are available at the time the alarm is received. These policies do not consider the workload imposed on firefighters, and do not work well at the high alarm rates now characteristic of parts of large cities. Our procedure, designed for use in New York City's computed-aided Management Information and Control System, makes good initial dispatch decisions at all alarm rates. It uses response times to serious fires to measure performance and recognizes that the dispatcher has incomplete information about the seriousness of the incident when the decision is made.

A simulation comparison of our procedure with the traditional policy was made using actual incidents from July 1972. Our procedure reduced the average second engine and second ladder response times to serious fires by 25 to 45 seconds, while keeping total workload essentially unchanged. This reduction, which is about 10–15% of the five and a half minutes obtained for the traditional policy, results primarily from our procedure's deciding how many to send based on historical information on the chance that an alarm from a given location at a given time of day is serious. For example, the fraction of fires in occupied structures getting an initial second engine rose from 65% with the traditional policy to 85% with our procedure, although both policies sent an initial second engine to the same fraction of all incidents. Our procedure also reduced the number of relocations of engine companies and ladder companies substantially.

The approach we used should be valuable in the design of computer-aided dispatching systems in other cities. In particular, others may find it helpful to review the way in which the objective function is developed, the way particular aspects of the dispatch problem are treated, the provision of several parameters for tuning behavior, and features of the simulation testing.
Spacecraft for Multi-Floor Layout Planning
Authors: Johnson Roger V.
Published: November 2008

A descriptive problem definition and a tested computerized heuristic solution procedure are offered for the problem of relative location of facilities in (or layout of) a multi-floor building. The problem definition and solution procedure overcome the problem of severe nonlinearity of inter-department movement times relative to distance, which enter the multi-floor problem because of the indirectness of routing, and because of different movement speeds compared with the single floor case. Both the definition and solution procedure are application-oriented, concentrating on practical aspects of multi-floor space allocation. Substantial savings in an implementation are reported. The procedure is particularly relevant to planning for an organization moving into a new multi-floor building.

Additionally, the procedure can be used, without modification, for an organization spread over more than one building, and for single floor facilities. The possibility of alternative inter-floor routings is incorporated.
Dynamic Analysis of Consumer Response to Marketing Strategies
Authors: Hauser John R. , Wisniewski Kenneth J.
Published: November 2008

This paper develops a methodology for modeling consumer response that integrates previous research in stochastic brand selection, diffusion of innovation, test market analysis, and new product design. The methodology makes it practical to extend brand selection models to include diffusion phenomena such as awareness, trial, and information flow. Purchase timing and brand selection are interdependent and both phenomena depend jointly on managerial controls such as advertising, coupons, price-off promotion, product positioning, and consumer characteristics.

Within this general structure, we provide practical estimation procedures (a least squares approximation to the maximum likelihood estimates) to determine the parameters which link managerial controls to consumer response. Closed form solutions are derived for cumulative awareness, cumulative trial, penetration, expected sales, and purchases due to promotion—all as a function of time. We also provide simplified expressions for equilibrium (t → ∞) market share. Tradeoffs among complexity of the diffusion process, number of managerial variables, nonstationarity, complexity of purchase timing, consumer segmentation, and sample size are made explicit so that the marketing scientist can customize his analyses to the managerial problems that he faces.

The effects of sample size, data interval frequency, and collinearity in the explanatory variables are investigated with simulations based on a five-state consumer response process which depends on 8–10 marketing variables.

The paper closes with a brief description of the application and predictive test of a consumer response model based on the methodology.
Efficiency of the Antithetic Variate Method for Simulating Stochastic Networks
Authors: Sullivan Robert S. , Hayya Jack C. , Schaul Ronny
Published: November 2008

This paper investigates the efficiency of antithetic variate simulation for estimating the expected completion time of stochastic networks. The method is compared with Monte Carlo simulation and considers both computation effort and the variance of the estimators. An efficiency ratio is first developed and then investigated within a theoretical framework. We then provide analytical proof of the superiority of the antithetic variate method for some networks whose activity durations are distributed symmetrically about their means. Next, experimental analysis of the efficiency ratio is carried out using test networks that are randomly structured and whose activity distributions are randomly assigned. The study shows that on the average the antithetic variate method can provide the same precision as Monte Carlo simulation, but with approximately 1/4 the computation effort. Furthermore, when activity distributions are symmetric, we can expect the antithetic variate method to require less than 1/10 the computation effort.
Asymmetric Information, Incentives and Intrafirm Resource Allocation
Authors: Harris M. , Kriebel C. H. , Raviv A.
Published: November 2008

This paper considers the question: How should a firm allocate a resource among divisions when the productivity of the resource in each division is known only to the division manager? Obviously if the divisions (as represented by their managers) are indifferent among various allocations of the resource, the headquarters can simply request the division managers to reveal their private information on productivity knowing that the managers have no incentive to lie. The resource allocation problem can then be solved under complete (or at least symmetric) information. This aspect is a flaw in much of the recent literature on this topic, i.e., there is nothing in the models considered which makes divisions prefer one allocation over another. Thus, although in some cases elaborate allocation schemes are proposed and analyzed, they are really unnecessary. In the model we develop, a division can produce the same output with less managerial effort if it is allocated more resources, and effort is costly to the manager. We further assume that this effort is unobservable by the headquarters, so that it cannot infer divisional productivity from data on divisional output and managerial effort. Given these assumptions, we seek an optimal resource allocation process. Our results show that certain types of transfer pricing schemes are optimal. In particular, if there are no potentially binding capacity constraints on production of the resource, then an optimal process is for each division to choose a transfer price from a schedule announced by the headquarters. Division managers receive a fixed compensation minus the cost of the resource allocated to them at the chosen transfer price. Resources are allocated on the basis of the chosen transfer prices. If there is a potentially binding constraint on resource production, a somewhat more complicated, but similar, scheme is required.
Priority Ranking and Consensus Formation: The Case of Ties
Authors: Armstrong Ronald D. , Cook Wade D. , Seiford Lawrence M.
Published: November 2008

This paper investigates the problem of obtaining a compromise/consensus from a set of ordinal rankings of n objects supplied by m committee members. Earlier work by Cook and Seiford (Cook, Wade D., Lawrence M. Seiford. 1978. Priority ranking and consensus formation. Management Sci. 24 (16) 1721–1732.) dealt with the problem of consensus when attention was restricted to complete rankings only. That is, no ties were permitted. This paper examines the general problem which allows for tied preferences. A convex polyhedral representation is given of the feasible solution space, and a branch-and-bound procedure is developed for determining an optimal ranking. Computational results for various problem sizes are presented. Generalizations, and directions for further research are discussed.
Inflation and the Trade Credit Period
Authors: Ben-Horim Moshe , Levy Haim
Published: November 2008

Management of accounts receivable and trade credit policy should often be adjusted to reflect changing interest rates due to changing inflation. Firms can respond to inflation by either increasing the discount for cash payments or by shortening the credit period. This paper investigates the policy of shortening the credit period in response to changing inflation rates. We first assume that inflation is fully anticipated, and later we extend the analysis to incorporate inflation risk.
A Perfect Planning Horizon Procedure for a Deterministic Cash Balance Problem
Authors: Chand Suresh , Morton Thomas E.
Published: November 2008

This paper develops a “perfect planning horizon procedure” for the simple cash balance problem, where the objective of the firm is to schedule the selling and buying of its earning assets so that all the positive demands are met at minimum cost. Demand for cash can be both positive or negative; a positive demand means the cash outflow and a negative demand means the cash inflow. While the planning horizon procedure reported in Mensching, Garstka, and Morton (Mensching, J., S. Garstka, T. Morton. 1978. Protective planning-horizon procedures for a deterministic cash balance problem. Oper. Res. 26 637–652.) obtains optimal initial decisions for the infinite horizon cash balance problem by using forecasts for some finite horizon, the perfect procedure in this paper is guaranteed to obtain these decisions by using the minimum possible number of periods of forecast data. We also present a forward dynamic programming algorithm which is computationally more efficient than the forward algorithm of Blackburn and Eppen (Blackburn, J., G. Eppen. 1973. A two asset deterministic cash balance problem. Research Paper No. 133, Stanford University.). Our computational results show that the perfect procedure in this paper can lead to significant savings in the number of periods of forecast data required to obtain optimal initial decisions and the CPU time compared to the planning horizon procedure in Mensching, Garstka, and Morton (Mensching, J., S. Garstka, T. Morton. 1978. Protective planning-horizon procedures for a deterministic cash balance problem. Oper. Res. 26 637–652.).
Research Bibliography—Stochastic Dominance: A Research Bibliography
Authors: Bawa Vijay S.
Published: November 2008

About 400 publications, working papers and books are included in this bibliography on Stochastic Dominance. It contains an exhaustive listing of papers that are either basic contributions to this subject or primarily concerned with applications of the Stochastic Dominance concepts. It also contains selective listing of papers from finance, economics, mathematics, mathematical physics, mathematical psychology, operations research and statistics literature to illustrate the wide applicability of Stochastic Dominance concepts.
A Four-Moments Alternative to Simulation for a Class of Stochastic Management Models
Authors: Kottas John F. , Lau Hon-Shiang
Published: November 2008

This paper presents a computational alternative to simulation for a large class of stochastic management models involving functions of random variables. An example of a model in this class is the well-known “risk analysis” problem studied by Hertz and Hillier. Our computational approach includes (i) a versatile framework to describe the univariate and dependence characteristics of a model's random variables, and (ii) formulas for computing the central moments of the model's objective variable. The usefulness of these central moments in decision making is then illustrated and discussed.
The Hierarchical Service Location Problem
Authors: Moore George C. , ReVelle Charles
Published: November 2008

A location problem with a hierarchy of facilities and services is proposed and solved. The formulation defines a demand point to be covered for a given level of service if some member of the facility hierarchy eligible to provide that service is present within an appropriate distance. Furthermore, the absence of coverage at any one service level for a demand point is taken to imply lack of coverage in the grand measure of coverage. The problem's objective is the maximum coverage of population given specific limits on either the number of each type of facility or on the total investment that can be made in all facility types. Relaxed linear programming, supplemented by branch and bound where necessary, is used to solve the resulting integer programming problem. An application is described that uses distance and population data developed for a region of Honduras. Honduran nationals are currently being trained in the use of this and related location methodologies under a contract with the Agency for International Development. This effort is in support of work being undertaken by the Honduran National Planning Council to develop a nationwide data set of populated places in Honduras to which location methodologies will be applied.
Some New Results for the M/M/1 Queue
Authors: Pegden Claude Dennis , Rosenshine Matthew
Published: November 2008

New results are obtained for the single server queue with Poisson arrivals and exponential service times. A closed form solution involving only finite sums is obtained for the probability that exactly i arrivals and j services occur over a time interval of length t in a queueing system that is idle at the beginning of the interval. Since many applications of queueing theory involve queues which are emptied and restarted periodically and thus not susceptible to analysis using the well-known equilibrium results, there are many potential applications for results obtained. Some ways in which the results obtained may be applied are discussed.
Note—Efficient Heuristic Algorithms for Positive 0-1 Polynomial Programming Problems
Authors: Granot Frieda
Published: November 2008

We develop in this paper two types of heuristic methods for solving the positive 0-1 polynomial programming (PP) problem of finding a 0-1 vector x that maximizes cTx subject to f(x) ≤ b where c, b ≥ 0 and f is an m-vector of polynomials with non-negative coefficients.

The various heuristics were first tested on randomly generated sparse problems of up to 50 variables and 50 constraints, and their performance in terms of computational time and effectiveness was investigated. The results were very encouraging. Optimal solutions were consistently obtained by some of the heuristic methods in over 50% of the problems solved. The effectiveness was on the average better than 99% and no less than 96.5%. The computational time using these heuristics is on the average 5% of the time required to solve the PP problems to optimality. Some results for very sparse problems with up to 1,000 variables and 200 constraints are also reported.
A Nonsequential R & D Search Model
Authors: Lee Tom K.
Published: November 2008

Managers of research and development (R&D) programs are often confronted with questions of what determines R&D spending (i.e. R&D search intensity) and when R&D spending is unprofitable (i.e. Reservation Technology Level). Three determinants of R&D spending are identified: the current technology level, the length of decision horizon, and basic research. Comparative statics of the effects of these determinants of R&D spending are discussed.

The higher the current technology level, the less intensive is R&D search because, ceterus paribus, the lower the probability of finding a better technology. The longer the decision horizon, the more intensive is R&D search because fruitful R&D results can be applied to more time periods and generate more present value profits. Finally, technological opportunities can be improved via basic research. The improvement of technological opportunities in turn spurs R&D search.

Existence of a Reservation Technology Level (RTL) is established. It constitutes a stopping rule for R&D search. Whenever the current technology level is greater than or equal to RTL, R&D search stops; otherwise R&D search continues. One interesting property of RTL is that it is strictly less than the highest possible technology level. Thus the economic limit of R&D (RTL) differs from the technological limit of R&D. Ex ante, an R&D program manager should not press for the technological limit of R&D once the current technology level exceeds or equals RTL. However, ex post, one may end up with a technology level greater than RTL. Moreover, R&D search may be resumed in an abandoned R&D area if (i) interest rate declines, (ii) R&D quasi-fixed cost reduces, or (iii) basic research provides a favorable shape-preserving shift of the distribution of technological opportunities.
Algorithmic Solution of Some Queues with Overflows
Authors: Neuts Marcel F. , Kumar Seshavadhani
Published: November 2008

The overflow stream from an M/PH/1 queue of finite capacity is used as the input to an unbounded queue with one or more exponential servers. It is shown that the combined system, consisting of the two queues, may be studied as a highly structured Markov process. In the stable case, this Markov process has a matrix-geometric invariant vector. Particular features of the infinitesimal generator of the process may be used to simplify the numerical computation of various steady-state features of the model. Several variants and numerical examples are discussed.
Exact and Approximate Cost Functions for Product Aggregates
Authors: Zipkin Paul
Published: November 2008

We show that certain large, multiproduct problems can be well approximated by smaller models of the same form, representing only one aggregate product (or a few such products). This reduction follows from a new technique to approximate the minimal cost of a special allocation or “disaggregation” problem, by a simple, closed-form aggregate cost function. This function, moreover, has the same form as the cost functions for the original, individual products. For special cases the “approximation” is exact. (This latter result is related to economic-theoretic research on aggregation with homothetic preferences.) The results are applied to a one-stage, multiperiod, multi-item production smoothing model, and then to a similar model of a two-stage system, yielding a reduction in the number of items to one or to relatively few.
The Longitudinal Analysis of Organizations: A Methodological Perspective
Authors: Miller Danny , Friesen Peter H.
Published: November 2008

The case is made for performing more longitudinal research into organizations and their adaptive processes. Previous literature on the empirical longitudinal analysts of organizations is classified into five categories on the basis of the breadth of scope of the research, the number and diversity of organizations being studied, and the degree to which mathematical and statistical procedures are used to develop conclusions. The strengths and limitations of each of the five types of longitudinal research are discussed. It is argued that there should be a more concerted attempt to undertake research that focuses on a broad array of organizational variables in many organizations and which uses quantitative methods to derive results which are replicable and whose range of generality has been carefully established. Several proposals are made toward this end. Methods are suggested for gathering valid and reliable longitudinal multivariate data from numerous organizations in an economical fashion. Also, techniques of statistical and mathematical analysis are proposed for handling the complications caused by multivariate nonlinearities in longitudinal data. Of particular interest in this regard is the use of techniques of organizational taxonomy generation and testing and the use of algebraic heuristic procedures for identifying and differentiating among common scenarios of change in organizations. These suggestions should help to combat the non-cumulative nature of longitudinal research by avoiding the very common problems of specification error, nongenerality, and non-replicability.
Forecasting Applications of an Adaptive Multiple Exponential Smoothing Model
Authors: Enns Phillip G. , Machak Joseph A. , Spivey W. Allen , Wrobleski William J.
Published: November 2008

This paper introduces a class of multiple exponential smoothing models useful in automated or minimal intervention industrial forecasting systems. These models are an alternative to simple univariate exponential smoothing and Trigg and Leach type adaptive models, which treat time series as unrelated and so cannot explicitly accommodate interrelationships that may exist between two or more time series. Moreover, the multiple models are adaptive in that the smoothing matrix, which is a generalization of the smoothing constant of univariate models, changes from period to period. Maximum likelihood estimates of the model parameters, including the full variance-covariance structure as well as the smoothing matrix, are provided, thus freeing the model user from the need for making ad hoc estimates of parameter values, a feature of simple univariate exponential smoothing. The forecast performance of this multiple time series model is compared with that of other univariate models using automobile sales data and some promising results are obtained.
Stratport: A Model for the Evaluation and Formulation of Business Portfolio Strategies
Authors: Larréché Jean-Claude , Srinivasan V.
Published: November 2008

A decision support system to evaluate and formulate business portfolio strategies is proposed. Strategies are expressed in terms of market share objectives to be achieved in each of the N business units in the portfolio. STRATPORT evaluates a strategy in terms of the net present value of its after-tax cash flows in the long term as well as its short-term net cash flow implications. Risk considerations are incorporated as per the Capital Asset Pricing Model. The model explicitly considers marketing investment, capacity expenditures, working capital and the impact of “experience” on costs and revenues over a time horizon. The formulation of strategy is accomplished by maximizing long-term profit subject to a short-term net cash flow limit, with the maximization repeated over a range of values for the short-term net cash flow limit. The use of the Generalized Lagrange Multiplier permits the simultaneous optimization of N market shares to be accomplished more efficiently by N univariate maximizations. Although the function that is maximized in the univariate maximization is not unimodal, the newly proposed procedure guarantees that a global maximum will be found. Limitations of the model and some extensions to minimize their impact are discussed.
Uncertainty, Social Location and Influence in Decision Making: A Sociometric Analysis
Authors: Tushman Michael L. , Romanelli Elaine
Published: November 2008

This research investigates the relative impacts of formal status and informal communication roles on influence in administrative and technical decision making. While external information enters the organization via boundary spanning individuals, the exercise of influence at lower levels of the organization is dependent on mediating critical organizational contingencies. As the locus of task uncertainty shifts, so too does the relative influence of boundary spanning individuals and internal stars; the greater the task and environmental uncertainty, the greater the influence of boundary spanning individuals. Senior management are influential across task areas. The formal hierarchy and informal social processes complement each other in the exercise of influence. These results extend research which indicates that different information processing requirements require systematically different organizational processes to attend to that uncertainty.
Estimating and Adjusting for the Intervalling-Effect Bias in Beta
Authors: Cohen Kalman J. , Hawawini Gabriel A. , Maier Steven F. , Schwartz Robert A. , Whitcomb David K.
Published: November 2008

The concept of beta as the measure of systematic risk has been widely accepted in the academic and financial community. Increasingly, betas are being used to estimate the cost of capital for corporations. Despite this, however, biases are generally present in ordinary least squares (OLS) estimates of beta. In particular, empirical estimates of beta are affected by friction in the trading process which delays the adjustment of a security's price to informational change and hence leads to an “intervalling-effect” bias. In this paper, we present and empirically test two procedures for correcting this bias. The first is to estimate the asymptotic value that OLS beta approaches as the differencing interval is lengthened without bound. The second procedure is to infer the value of beta by adjusting OLS beta for cross-sectional differences in the intervalling effect as a function of the depth of the market for a security (as measured by its value of shares outstanding). Our results suggest that a substantial correction is needed to get “true” beta estimates from short differencing interval data.
Risk Premiums for Decision Regret
Authors: Bell David E.
Published: November 2008

Some people find decision making under uncertainty difficult because they fear making the “wrong decision,” wrong in the sense that the outcome of their chosen alternative proves to be worse than could have been achieved with another alternative. These people may be willing to pay a premium to avoid consequences that produce this decision regret. This paper continues an earlier investigation into the normative implications of decision regret and looks at situations where the joint probability distribution of consequences between alternatives is not specified at the time of the decision. It includes a discussion of cases where the outcomes produced by alternatives not chosen are never resolved. A consequence of this model of preferences for risky situations is that two components of risk aversion may be identified, decreasing marginal value and regret aversion.
An Econometric Study of Recruitment Marketing in the U.S. Navy
Authors: Hanssens Dominique M. , Levien Henry A.
Published: November 2008

Since the abolishment of the mandatory draft the U.S. Navy, along with the other services, has engaged in aggressive marketing strategies in order to attract a sufficient number of qualified individuals to volunteer enlistment. The purpose of this study is to investigate the effectiveness of these efforts, primarily advertising and personal selling, within the general framework of the recruiting environment.

The study uses insights into the recruiting process, provided by the Navy Recruiting Command, along with principles of economics and marketing to develop an econometric model of recruiting performance. The parameters of the model are then estimated on a monthly data base for the 43 Navy Recruiting Districts, from January 1976 to December 1978. The objective of the model is descriptive, i.e., it quantifies the effects of various environmental and marketing variables on three measures of recruiting performance: nationally generated leads, contracts for the delayed-entry program and direct-shipment contracts. The enlistment contracts refer to nonprior service males between 17 and 21 years old.

The environmental variables in the models include economic factors such as unemployment rate and civilian income, sociodemographic variables such as urbanization, the proportion of blacks and high-school seniors in the target market, and local youth attitudes toward the Navy, and time-related factors such as seasonally and the GI Bill. The marketing efforts are national advertising expenditures in seven media, local advertising expenditures, recruiter strength and recruiter aid expenditures.

The econometric models reveal that both environmental and marketing variables had significant impact on variations in recruiting performance over time and across recruiting districts. The specific response effects for leads and contracts are reported in the “discussion of results” section. The “conclusions” section integrates several of these results along three dimensions: the relative influence of environmental versus marketing variables on recruiting performance, differences in the response structures for leads, delayed-entry and direct-shipment contracts, the relative effectiveness of media advertising and personal selling.