bluuebunny/crossref_metadata_2025 huggingface dataset:
The Demand for a Risky Asset
Authors: Kira D. , Ziemba W. T.
Published: November 2008

We investigate the effect on the demand for a risky asset when there are changes in either initial wealth or one of the asset return distributions in two asset expected utility portfolio problems. In the choice between a risky and a safe asset necessary and sufficient conditions are presented for first, second and third degree stochastic dominance shifts to yield increasing demand for the risky asset. The conditions may be illustrated graphically and used to demonstrate that many common utility functions fail to satisfy the increasing demand property. The results extend and generalize the analysis in Fishburn and Porter (Fishburn, P. C., R. B. Porter. 1976. Optimal portfolios with one safe and one risky asset: effects of changes in rate of return and risk. Management Sci. 22 1064–1073.). In the two risky asset case sufficient conditions are presented for there to be an increase in the demand for one of the risky assets if either initial wealth is increased or this asset has a first degree stochastic dominance shift. The conditions, which build upon and extend earlier results of Arrow (Arrow, K. J. 1971. Essays in the Theory of Risk Bearing. Markham, Chicago, Ill.) and Cass and Stiglitz (Cass, D., J. E. Stiglitz. 1972. Risk aversion and wealth effects on portfolios with many assets. Rev. Econom. Studies 39 331–354.), may be used to determine which utility functions display the increasing demand properties.
Scheduling Jobs Subject to Nonhomogeneous Poisson Shocks
Authors: Pinedo Michael L. , Ross Sheldon M.
Published: November 2008

Consider n tasks which must be attempted in some order. To successfully complete any given task requires a random amount of time. However, we suppose that there are external events, called shocks, which occur according to a nonhomogeneous Poisson process. If no shocks occur while a task is being performed, then that task is considered a success. If a shock does occur, then work on that task ends and work on the next one begins. We consider such problems as maximizing The expected number of successful tasks; The length of time until no tasks remain; The expected total reward earned; where a reward R1 is obtained upon successful completion of task i.
Optimal Multi-Level Lot Sizing for Requirements Planning Systems
Authors: Steinberg Earle , Napier H. Albert
Published: November 2008

The wide spread use of advanced information systems such as Material Requirements Planning (MRP) has significantly altered the practice of dependent demand inventory management. Recent research has focused on development of multi-level lot sizing heuristics for such systems. In this paper, we develop an optimal procedure for the multi-period, multi-product, multi-level lot sizing problem by modeling the system as a constrained generalized network with fixed charge arcs and side constraints. The network permits us to relax some of the more restrictive assumptions of previous models such as those designed for product structures with single sources or successors.

The solution to the resulting minimum cost flow problem yields optimal lot sizing decisions for all purchases as well as manufactured goods and components in all periods over a finite planning horizon. A simple illustration, beginning with a master production schedule and bills of material, illustrates the suitablility of this approach for modeling complex requirements planning systems.

Optimal solutions obtained by this method may also be useful in comparing results obtained from future heuristic approaches which may be more computationally efficient.
An Economics Approach to Modeling the Productivity of Computer Systems
Authors: Kriebei Charles H. , Raviv Artur
Published: November 2008

The problem of linking computing and information services to end user needs for performance evaluation has been a long standing issue in the systems literature. A joint university-industry research project was begun in 1975 to better understand the problem. The specific goals of the project have been: (1) to develop a theory or conceptual framework for productivity measurement of the computing and information services function, (2) to pilot test the theory through empirical analysis at field sites, and (3) to evaluate the results and report the conclusions (success and failure). This paper is addressed to the first of these goals; the empirical tests and experience based on the framework are reported in a sequel paper.

Our approach to modeling the productivity of computer systems is based on conventional economic theory and empirical analysis. The economics paradigm is to view the organization as a marketplace for computing and information services which contains elements of supply and demand. In this paper our concern centers on the supply of services. A model of the production process for computing services available within an organization is developed which quantitatively relates input resources and output products or services; the model also incorporates output quality as an integral function of the relevant variables in the process. Various measures of production efficiency are defined based on this model. The productivity of a computer system is defined in terms of these measures and we discuss their application for administrative decisions in performance evaluation.
On Committee Decision Making: A Game Theoretical Approach
Authors: Shenoy Prakash P.
Published: November 2008

In this paper, we study the committee decision making process using game theory. By a committee, we mean any group of people who have to pick one option from a given set of alternatives. A well defined voting rule is specified by which the committee arrives at a decision. Each member has a preference relation on the set of all alternatives. A new solution concept called the one-core is introduced and studied. Intuitively, the one-core consists of all maximal (for the proposer) proposals which are undominated assuming that the player who makes the proposal does not cooperate in any effort to dominate the proposal. For games with non-emtpy cores, the one-core proposals are shown to be better than the core. For games with empty cores, the one-core proposals tend to be pessimistic, i.e., they indicate the security level of the players. This is because the stability requirements of the one-core are too strong for such games. A bargaining set modeled along the lines of the Aumann-Maschler bargaining set for characteristic function games is defined for committee games. Because of its relaxed stability requirements, the bargaining set indicates more reasonable proposals than the one-core. The existence of both the one-core and the bargaining set are studied and these concepts are compared with two other well known solution concepts—the core and the Condorcet solution.
Communications—Rand-HUD Fire Models
Authors: Wallace Rodrick , Wallace Deborah
Published: November 2008

The March, 1978 issue of Management Science carried a paper by Jan M. Chaiken titled “Transfer of Emergency Service Deployment Models to Operating Agencies” which purported to describe the successful implementation of, among other things, fire service management models developed by the Rand Corporation for the Office of Policy Development and Research of the U.S. Department of Housing and Urban Development (HUD). The appearance of this paper at such a late date raises serious questions of professional responsibility and competence, both for the Rand-HUD team and for the management science and operations research communities.
A Land Management Model Using Dantzig-Wolfe Decomposition
Authors: Nazareth L.
Published: November 2008

This paper deals with a mathematical model designed to provide guidelines for managing a land resource over an extended period of time.

We develop a framework which permits sequences of management decisions to be conveniently formulated, and their associated costs and benefits specified. This takes the form of a network. Each path in the network represents a possible decision sequence. We study how to select suitable decision sequences and what proportion of the resource to manage with each selected sequence, so as to optimize some specified objective and meet the constraints imposed on management of the resource. An L.P. model is formulated. The solution strategy decomposes the L.P. matrix using Dantzig-Wolfe decomposition and solves the subproblems efficiently by dynamic programming or a network flow algorithm. Computational aspects are discussed and the concepts and procedures are illustrated in the Appendix, for forest management.
Deterministic Production Planning: Algorithms and Complexity
Authors: Florian M. , Lenstra J. K. , Rinnooy Kan A. H. G.
Published: November 2008

A class of production planning problems is considered in which known demands have to be satisfied over a finite horizon at minimum total costs. For each period, production and storage cost functions are specified. The production costs may include set-up costs and the production levels may he subject to capacity limits. The computational complexity of the problems in this class is investigated. Several algorithms proposed for their solution are described and analyzed. It is also shown that some special cases are NP-hard and hence unlikely to be solvable in polynomial time.
Continuous Review (s, S) Policies with Lost Sales
Authors: Archibald Blyth C.
Published: November 2008

A method is developed to calculate an (s, S) policy that minimizes the average stationary cost in an inventory system with: constant lead time, fixed order cost, linear holding cost per unit time, linear penalty cost per unit short, discrete compound Poisson demand, and lost sales. It is assumed that at most one order is outstanding, or equivalently that S − s > s. The procedure is compared to several easier-to-compute approximate solutions, including one that assumes backordering. Examples are given that reveal that although the backorder solution is different than the lost sales one, the cost penalty of using it in the lost sales situation is small.
An Evolutionary Strategy for Implementing a Decision Support System
Authors: Alavi Maryam , Henderson John C.
Published: November 2008

This paper investigates two alternative strategies for implementing Decision Support Systems (DSS): evolutionary and traditional. The evolutionary approach utilizes judgement modeling (boot strapping) as a means to create felt need, to provide insight into the decision process and the implied weighting of decision variables, and to establish a learning-based, participatory implementation strategy. In contrast, the traditional approach is characterized by a problem solving orientation wherein the DSS is portrayed as providing a valuable “product” that can be theoretically justified.

Decision making in a simulated production environment is used to test the alternative strategies. Decision style is also included in the experimental design. Results indicate significantly higher utilization of the DSS with the evolutionary approach. Decision style findings are consistent with reported research.
Planned Change: Prospects for the 1980s
Authors: Susman Gerald I.
Published: November 2008

The objective of this paper is to suggest some directions in the 1980s for the development of the theory and practice of planned change. The author makes two basic assumptions in approaching this objective. First, the two fields most widely associated with planned change, organization development and planning, are increasingly addressing similar or related problems and, as a result, offer significant opportunities to contribute to the development of the other. Second, we will not learn very much about directions for the field of planned change if discussion proceeds without consideration of the kinds of concrete problems we will likely face in the 1980s. The opportunities suggested in the first assumption will become clear by presenting some illustrative problems to be faced in the 1980s.

The illustrative problems presented are highly interdependent. Organizations which attempt to solve these problems will find that many of their goals compete with or facilitate the goals of other organizations. Such problems and organizational consequences cannot be readily dealt with through central, comprehensive planning. An alternative is to create forums within and between organizations which include representation from all parties with an affected interest in the problems at issue. Action research is proposed as a problem-solving mode appropriate to such forums. It is a mode of problem-solving which searches for common values underlying different interests and encourages commitment to solving jointly defined problems.
Selecting a Portfolio of Solar Energy Projects Using Multiattribute Preference Theory
Authors: Golabi Kamal , Kirkwood Craig W. , Sicherman Alan
Published: November 2008

This article reports a procedure developed to assist the U.S. Department of Energy in selecting a portfolio of solar energy applications experiments. The procedure has also been used in other government procurements and appears to be applicable in a variety of project funding processes. The technical quality of each proposed applications experiment was summarized through the use of multiple evaluation measures, or attributes. These were combined into a single index of the overall technical quality of an experiment through the use of a multiattribute utility function. Recently derived results in measurable value theory were applied to derive an index of the overall technical quality of a portfolio of experiments. Budgetary and programmatic issues were handled through the use of constraints. This approach allowed the portfolio selection problem to be formulated as an integer linear program. Details of the application are presented, including a discussion of the data requirements and assessment procedure used. The portfolio selection procedure was successfully applied, and variations of it have been successfully used in four other solar energy procurements.
Note—An Objective Function Perturbation with Economic Interpretations
Authors: Soyster A. L.
Published: November 2008

For an ordinary linear program it is well known that, if the resources are evaluated at marginal prices determined by an optimal dual solution, then this imputed value is identical with the value of the primal objective function. For a convex program with a nonlinear objective function and linear constraints this identity in general does not hold. The resulting difference is due to a returns to scale associated with the objective function, as earlier pointed out by Balinski and Baumol (Balinski, M. L., W. J. Baumol. 1968. The dual in nonlinear programming and its economic interpretation. Rev. Econom. Studies 35 237–256.). In this paper we consider a certain perturbation of the objective function that characterizes the difference between the objective function value and imputed marginal cost This perturbation, when applied to a certain class of profit maximizing monopolies, explains the difference between the monopoly price and the marginal production cost.
Due Date Assignment for Production Systems
Authors: Seidmann Abraham , Smith Milton L.
Published: November 2008

This paper is concerned with the study of the constant due-date assignment policy in a dynamic job shop. Assuming that production times are randomly distributed, each job has a penalty cost that is some non-linear function of its due-date and its actual completion time. The due date is found by adding a constant to the time the job arrives to the shop. This constant time allowed in the shop is the lead time that a customer might expect between time of placing the order and time of delivery. The objective is to minimize the expected aggregate cost per job subject to restrictive assumptions on the priority discipline and the penalty functions. This aggregate cost includes (1) a cost that increases with increasing lead times, (2) a cost for jobs that are delivered after the due dates: the cost is proportional to tardiness and (3) a cost proportional to earliness for jobs that are completed prior to the due dates. We present an algorithm for solving this problem and show that the optimal lead time is a unique minimum point of strictly convex functions. The algorithm utilizes analytical procedures; computations can be made manually. No specific distributions are assumed; the distribution of total time a job is in the shop is utilized by the algorithm. This distribution can be theoretical or empirical. An example of a production system is presented.
A Resource Allocation and Evaluation Model for Providing Services to the Mentally Retarded
Authors: Heiner Karl , Wallace William A. , Young Kevin
Published: November 2008

Legal decisions in the mental health field, and the process of deinstitutionalization have brought about an increasingly complex system of service delivery for the mentally retarded. We present a linear programming model to assist in managing such delivery systems. The usefulness and applicability of the model has been tested in Minnesota. We discuss how the procedure can be applied elsewhere.

The model uses available measures of program efficiency and effectiveness, and transforms them into a form meaningful to the administrator who must make budgeting decisions and evaluate programs. In addition, with the help of this model, the administrator can incorporate important equity considerations into the management process.
Model-Directed Information Systems for Management of the Federal Courts
Authors: Buchanan Jack R. , Fennell Richard D.
Published: November 2008

To satisfy the diverse information needs of federal courts, a family of information management systems was developed, based upon formal mathematical models of judicial case processing embedded in interactive data base information systems for case tracking and caseload management. These case processing models embodied pertinent federal rules of procedure, regulatory statutes, and local rules of procedure as adopted by individual courts. This paper describes the particular model-directed system to track federal criminal cases. In this system, a model of criminal case processing was incorporated into the information management system as a series of parallel state diagrams in which the status of any given court case could be described as a set of state indicators and allowable next-actions.

Data entry is performed as a part of the court's obligation to maintain a permanent record of the proceedings (the “docket”) in each case. Users of the information system interact with the model by posting transactions (“events”) against court cases in the data base, thereby causing the cases to be moved through the model. Erroneous transactions are rejected with an appropriate diagnosis of the error based upon the state of the case with respect to the model. Use of such a model-directed information management system helps to ensure that the records of court cases being maintained are accurate and legally consistent. The embedded case processing model also permits the ready comparison of cases according to their procedural status, thereby providing an effective means for monitoring the progress of the court's caseload. Since the data base is structured according to elements of the procedural model, such model-directed systems are potentially very useful in providing effective management information, in addition to their obvious utility in information management.

As an analytical tool, the model provides the opportunity to understand the complexity and procedural details of the administration of individual courts. Such an analysis allows the comparison of procedural differences among courts in such a way as to facilitate the ability of the courts to better manage their caseloads and provide a higher level of service to the public. In addition, the data bases established as a result of the docketing process provide a valuable source of historical data for judicial administration research in court management methods. As an unexpected benefit, the model-directed information systems also became a valuable training aid to new court personnel. New users may post case status situations and possible sequences of transactions to the information system and be informed of the correctness of such a transaction sequence relative to the model, thereby revealing certain implications of the detailed procedures of the court.
Service Level Relationships in a Multi-Echelon Inventory System
Authors: Rosenbaum Barbara Amdur
Published: November 2008

This paper deals with a multi-echelon inventory system consisting of one central Distribution Center (DC) which is the source of supply for any number of Regional Distribution Centers (RDC's) which are the source of supply for customer demand. It develops and tests through the use of simulation a heuristic for determining what level of service the customer receives given any combination of DC and RDC service levels, where service is defined as the fraction of demand met from on-hand inventory at the location where the order is placed. A number of different combinations of DC and RDC service level will achieve any given level of customer service. The criterion used to identify the best combination is the minimization of the average level of total system inventory.
Analysis of a Preference Order Assembly Line Problem
Authors: Sniedovich Moshe
Published: November 2008

An analysis is made of a preference order dynamic programming procedure proposed in the literature for stochastic assembly line balancing problems. It is shown that in general the procedure does not satisfy the monotonicity condition and that therefore there is no guarantee that the solutions will be optimal. It is also shown that for a certain class of problems for which the procedure does yield optimal solutions, the proposed preference order model can be reformulated as a regular dynamic programming model.
A Micromodeling Approach to Investigate the Advertising-Sales Relationship
Authors: Blattberg Robert C. , Jeuland Abel P.
Published: November 2008

The purpose of this paper is to derive a model of advertising effects on the firm's sales. A micromodel is postulated and aggregated across individuals and over time to produce a macromodel of the aggregate sales-advertising relationship for a single product. The micromodel postulated is very simple. It incorporates two factors: reach of the ads and rate of decay of their effectiveness over time.

This approach to modeling advertising effects is shown to be fruitful in several respects: (1) the coefficients of the aggregate equation are easily interpretable—in terms of the reach and decay parameters; (2) the model derived is nonlinear yet estimable; (3) a special case of the model is very similar to lag models that have been in use; (4) the model can be used whatever the unit of time is; (5) the carryover effect of advertising (as commonly defined) is not constant, but depends upon the previous spending levels; and (6) the model helps illustrate that the duration of advertising may be greatly overstated if aggregate lagged dependent variable models are simplistically interpreted.
A Dual-Based Procedure for Dynamic Facility Location
Authors: Van Roy Tony J. , Erlenkotter Donald
Published: November 2008

In dynamic facility location problems, one desires to select the time-staged establishment of facilities at different locations so as to minimize the total discounted costs for meeting demands specified over time at various customer locations. We formulate a particular dynamic facility location problem as a combinatorial optimization problem. The formulation permits both the opening of new facilities and the closing of existing ones. A branch-and-bound procedure incorporating a dual ascent method is presented and shown, in computational tests, to be superior to previously developed methods. The procedure is comparable to the most efficient methods for solving static (single-period) location problems. Problems with 25 potential facility locations, 50 customer locations, and 10 time periods have been solved within one second of CPU time on an IBM 3033 computer. Extensions of the dynamic facility location problem that allow price-sensitive demands, linearized concave costs, interdependent projects, multiple stages, and multiple commodities also can be solved by the dual ascent method. The method can serve as a component of a solution process for capacitated dynamic location problems.
An Activity Network Approach for the Analysis of Manning Policies in Firefighting Operations
Authors: Halpern Jonathan , Sarisamlis Efstratios , Wand Yair
Published: November 2008

This paper presents a semi-empirical method for the analysis of manning policies in firefighting.

Since manpower costs account for a major share of non-volunteer fire departments' budgets, manning level is one of the most important policy issues relating to fire departments faced by local government decision makers. Yet, practically no analytic research of manning levels has been previously carried out.

The method described in this paper uses an activity network approach to describe fireground command operations and a structured interview to obtain data. The technique was used to analyze the effect of manning level in one- and two-family residential fires in the city of Calgary, Canada. A series of structured interviews with fire department officers generated data concerning precedence relations among activities, their durations, and their manpower requirements. These were used to establish a relationship between manning levels and time needed to extinguish the fire. The analysis indicated that there is a limit on manning level above which only marginal improvement can be obtained. Also, the effect of an additional firefighter depends on the existing manning level.

The results presented here are of a preliminary nature. However, they seem to lend credibility to the technique. In addition, we discuss some qualitative conclusions and other possible uses of the method.
Hidden Attributes and the Display of Information in Multiobjective Analysis
Authors: Schilling David A. , McGarity Arthur , ReVelle Charles
Published: November 2008

Quite often in the creation of analytic models for decision problems involving multiple objectives, some of the objectives are excluded. This can be due to their being consciously or unconsciously hidden by the decisionmaker or due to the lack of quantifiable performance measures. The normal procedure for evaluation of alternatives by the decisionmaker involves the presentation of their performance with respect to the stated criteria. When there are hidden objectives, however, the impact of the policies cannot be fully evaluated. Without the values of performance measures for all objectives for each of the alternatives, the decision-maker's choice among them rests on his preference weightings of the modelled objectives alone. To facilitate the decisionmaker's evaluation with respect to the hidden attributes, the presentation of alternatives should include values of the decision variables as well as quantified criteria.

Several methods for displaying information from a multiobjective analysis in terms of both the objectives and decisions are presented and discussed. Examples are provided for problems having both discrete and continuous solution spaces.
The Impact of Inspector Fallibility on the Inspection Policy in Serial Production Systems
Authors: Ballou Donald P. , Pazer Harold L.
Published: November 2008

Appropriate inspection is a significant component of production systems. In this paper a model is developed to determine the optimal placement of inspection stations within n-stage linear production systems. This model accommodates two types of inspector fallibility: “predictable,” which implies that the error rates are known and constant, and “erratic,” which requires a random variable to describe inspector performance. Cost per good unit accepted by the customer is used as the optimizing criterion. The cost-quality response surface is explored through a sequential sensitivity analysis. Our results indicate that under certain conditions the level of predictable inspector fallibility significantly impacts the number and placement of inspection stations as well as cost per good unit produced. The modeled systems, however, were quite insensitive to the variability of inspector performance.

This production-inspection model provides management with information on the optimal number and placement of inspection stations for specific planned or existing serial production systems. It can also be used by management to explore various policy options, such as the cost implications of increasing the quality vs. the quantity of inspection stations. The data required by the model can be obtained at reasonable cost provided management is willing to estimate or determine judgementally certain of the variables.
The Advertising Budget's Determinants in a Market with Two Competing Firms
Authors: Simon Julian L. , Ben-Ur Joseph
Published: November 2008

This is an exploratory study of the determinants of the size of the advertising budget in duopolistic competition. The model is a computer simulation that embodies learning, a multipenod decision horizon, brand loyalty, and other basic features of competitive reality in a two firm market.

Theoretical propositions are derived based on the postulated model. These include: Fixed production cost does not affect expenditures. Variable production cost is inversely related to expenditures. An increase in immediate advertising effectiveness increases expenditures. An increase in the lag coefficient increases expenditures. The greater the share-change coefficient, the greater are the expenditures. Initial expenditure levels have a strong effect on later levels. And the initial competition-reaction expectations have a strong effect at first, which later diminishes as firms learn how competitors behave.
A Batching Approach to Quantile Estimation in Regenerative Simulations
Authors: Seila Andrew F.
Published: November 2008

This paper presents a new method, called the batch quantile method, for estimating quantiles in regenerative simulations. The quantile estimator is consistent and asymptotically normal, and the method can be easily implemented and does not require prior knowledge of the range of values the data will assume. Empirical studies show adequate coverage of confidence intervals when batches of 50 cycles or more are used.
Police Patrol-Initiated Activities Within a Systems Queueing Model
Authors: Larson Richard C. , Mcknew Mark A.
Published: November 2008

Officers in police patrol cars operate in a complex stochastic environment. In addition to handling dispatcher-assigned calls for service from the public, they patrol to pose a threat of apprehension to would-be offenders and undertake certain on-site interventions to help improve general public safety. The on-site work, often highly discretionary, is called patrol-initiated activity. It includes issuing tickets for traffic violations, building checks, car checks, pedestrian checks and assisting motorists. In many cities patrol-initiated activities and calls for service consume comparable amounts of officers' time. In this paper we develop a spatially-oriented queueing-type model of a police patrol force that allows each of N patrol cars to be in one of three states: (1) busy, on a call for service; (2) busy, on a patrol-initiated activity; (3) free, on patrol. Designed for computer solution, the model yields N nonlinear equations whose unknowns are the workloads of the N patrol cars. Other performance measures of patrol can be computed easily in terms of the workloads. The incorporation of patrol-initiated activities represents an improvement over previous OR/MS models, and could result in more informed police management decisions regarding patrol beat design, workload smoothing among officers, and reduction of neighborhood-specific inequities in police accessibility. The methods of this paper are potentially applicable to other urban services, including taxi and maintenance operations.
Modeling the Pharmacologic Treatment of Hypertension
Authors: Moyé Lemuel A. , Roberts Stephen D.
Published: November 2008

We have developed a stochastic representation of the pharmacologic treatment of hypertension that is useful in predicting the outcome of various therapy protocols (sequences of antihypertension agents). Important variables (compliance, pharmacologic potency, incidence of side effects, symptoms from hypertension, and financial cost) are incorporated in the model, realistically representing the complex interactions involved in the treatment of hypertension from the perspectives of both physicians and patients. The outcome measures of the model are clinically relevant and easily interpreted. The model's predictions were found to conform with data from an empirical study. This treatment model was also used to compare commonly utilized antihypertensive agents within the traditional stepped care approach currently popular among clinicians.
A Stochastic Model of Consumer Behavior and Optimal Advertising
Authors: Tapiero Charles S.
Published: November 2008

A stochastic consumer behavior model is constructed transforming Nicosia's (Nicosia, F. M., 1966. Consumer Decision Processes. Prentice-Hall, Englewood Cliffs, New Jersey.) postulates into probability hypotheses. Nicosia's deterministic model is obtained in the mean evolutions and variance-covariances, defined by a system of linear differential equations obtained. This system, forming together with mean evolutions a closed system of five simultaneous differential equations is studied for stability, to devise optimal communication strategies and for suggesting an estimation technique.
On the Ample Service Assumption of Palm's Theorem in Inventory Modeling
Authors: Gross Donald
Published: November 2008

A key assumption of much of the continuous review inventory modeling work is that orders placed do not queue up, so that there is complete order crossing and hence order lead times are strictly independent random variables. This paper investigates the effects of this assumption (which is almost never true).
Optimal Advertising with Stochastic Demand
Authors: Monahan George E.
Published: November 2008

A stochastic, sequential model is developed to determine optimal advertising expenditures as a function of product maturity and past advertising. Random demand for the product depends upon an aggregate measure of current and past advertising called “goodwill,” and the position of the product in its life cycle measured by sales-to-date. Conditions on the parameters of the model are established that insure that it is optimal to advertise less as the product matures. Additional characteristics of the optimal advertising policy are also established.
On the General Feasibility Test of Scheduling Lot Sizes for Several Products on One Machine
Authors: Hsu Wen-Lian
Published: November 2008

Given N products and a set of “basic data” for each product, e.g., production rate, demand rate, setup time, setup cost and holding cost, etc., the Economic Lot Scheduling Problem is to find a feasible schedule that allows cyclic production pattern for each product and such that the sum of the setup and inventory carrying costs for all products per unit time is minimized. The routine application of the economic lot size formula to each product separately, often leads to the phenomenon of “interference,” i.e., the machine will be required to produce two items at the same time, which is impossible. In this paper we show that even a very restricted version of the original problem becomes NP-hard. We also give an implicit enumeration procedure for testing the feasibility of a schedule in which product i is set up ηi (integer) times per year. The main advantage of our procedure is that we can by-pass the tedious study of the start times and concentrate on the combinatorial structure of the production runs, which thus, theoretically cuts down the number of possible branchings in the enumeration.
Corporate Entrepreneurship and Strategic Management: Insights from a Process Study
Authors: Burgelman Robert A.
Published: November 2008

This paper presents a model of the strategic process concerning entrepreneurial activity in large, complex organizations. Previous empirical and theoretical findings can be integrated in this new conceptual framework.

The paper makes the following key points. First, firms need both diversity and order in their strategic activities to maintain their viability. Diversity results primarily from autonomous strategic initiatives of participants at the operational level. Order results from imposing a concept of strategy on the organization. Second, managing diversity requires an experimentation-and-selection approach. Middle level managers play a crucial role in this through their support for autonomous strategic initiatives early on, by combining these with various capabilities dispersed in the firm's operating system, and by conceptualizing strategies for new areas of business. Third, top management's critical contribution consists in strategic recognition rather than planning. By allowing middle level managers to redefine the strategic context, and by being fast learners, top management can make sure that entrepreneurial activities will correspond to their strategic vision, retroactively. Fourth, strategic management at the top should be to a large extent concerned with balancing the emphasis on diversity and order over time. Top management should control the level and the rate of change rather than the specific content of entrepreneurial activity. Finally, new managerial approaches and innovative administrative arrangements are required to facilitate the collaboration between entrepreneurial participants and the organizations in which they are active.
Communications—A Comment on Managing Library Collections
Authors: Weinberg Charles B.
Published: November 2008

In Sinha and Clelland (Sinha, B.K., R. C. Clelland. 1976. Modeling for the management of library collections. Management Sci. 22 (5, January) 547–557.) a set of models is developed to aid in the management of library collections. In particular, two questions are addressed: 1. How many items in a given class of books or journals should be acquired in a given year? 2. How long should such items be retained in the active collection?
Resource Allocation to Interrelated Risky Projects Using a Multiattribute Utility Function
Authors: Mehrez Abraham , Sinuany-Stern Zilla
Published: November 2008

Two major contributions are made to the problem of resource allocation to indivisible projects with uncertain outcomes: the concepts of preferential independence and utility independence for the space of discrete projects are defined, and a multiattribute utility theory is linked with mathematical programming for allocation. The utility function, as shown by Keeney, can be either multiplicative or additive. An overall procedure for structuring the model is outlined, a branch-and-bound algorithm for solving the multiplicative model is developed, and a numerical example is presented.
The Joint Determination of Marginal Rate of Return and Interest Adjusted Cost for Whole Life Insurance
Authors: Schleef Harold J.
Published: November 2008

Linear programming is applied to measurement of whole life insurance to obtain a functional relationship between interest adjusted cost of insurance protection and rate of return on policy equity. For comparative purposes, policy differences related to premium rates, dividends and cash-values are controlled by maintaining identical insurance requirements and constant levels of wealth for the insured. Marginal discount factors, obtained from the dual variables for the wealth constraints, demonstrate the importance of policy holder wealth. The interest adjusted cost measure currently used by the insurance industry is shown to be a special case when the linear programming approach is used. The method used in this paper is sufficiently flexible to incorporate different patterns of time preference for insurance. Finally, it is demonstrated that the trade-off between interest adjusted cost of insurance and rate of return on policy equity is sensitive to the external rate of return.
Reply to Brownlee Erratum
Authors: Naylor Thomas H.
Published: November 2008

Reply to Erratum To “The Capital Asset Pricing Model: An Evaluation of Its Potential as a Strategic Planning Tool” By Thomas H. Naylor and Francis Tapon, Management Sci. 29 (5) 633.
A New Approach to Determine Parameter Sensitivities of Transfer Lines
Authors: Ho Y. C. , Eyler M. A. , Chien T. T.
Published: November 2008

In this paper, we develop a complete and practical method for efficient compulation of the sensitivity information of a transfer line throughput. Our approach, which is a combination of analysis and experimentation, is fundamentally different from the existing solution methods. Using this approach the gradient information of the line throughput with respect to various decision variables is made available by a single observation of the line production history plus computation based on the observed data. These calculations are simple enough to be implemented on microcomputers.

After an analytical development, three applications and experimental verifications are presented, namely the optimization of the line throughput with respect to the buffer sizes, the cycle times and the repair times. The study provides useful insights to line performance improvement. For example, buffer sizes are but one set of decision variables, not necessarily the most important. Cycle time and repair time can be more significant parameters on the line performance optimization. In addition, the method provides a useful management support system in identifying the line critical points, where local improvement due to change in a parameter can result in most significant improvement in the overall line throughput performance.
Assembly Line Balancing with Processing Alternatives: An Application
Authors: Pinto Peter A. , Dannenbring David G. , Khumawala Basheer M.
Published: November 2008

The conventional approach to the assembly line balancing problem assumes that the manufacturing methods to be used have been predetermined. However, in practice the design engineer has several alternatives available in the choice of processing, typically involving a trade-off between labor or capital intensive options. The choice of manufacturing method is frequently viewed as an investment or capital budgeting decision, contrasting projected savings in labor cost with the additional fixed cost for the more capital intensive alternatives. The manufacturing tasks (based on the selected processing alternatives) are then assigned to work stations so as to minimize the number of work stations (i.e., labor costs) necessary to achieve a desired production rate.

This paper describes a method of simultaneously considering both the choice of manufacturing alternatives and the assignment of tasks to stations so as to minimize total costs (labor and fixed) over the expected life of the production line. The importance of considering these decisions jointly results from the fact that the benefits obtained from specific manufacturing alternatives should not be limited to anticipated labor savings alone. The true measure of achievable labor savings can only be determined after an assignment of tasks to stations has been chosen.

For instance, although a processing alternative may reduce the total work content of a set of tasks, if the resulting line balancing assignment does not reduce the number of stations required to achieve a desired production rate, the assumed savings will not be achievable and will serve only to increase the idle time of the line. On the other hand, an apparently trivial reduction in the time to complete a certain task may lead to a more efficiently balanced line, producing a much greater real savings in labor cost than had been anticipated, due to a reduction in both work content and idle time for the line.

The combined processing alternative line balancing problem can be formulated as an integer programming problem. Two alternate formulations are provided which differ in the degree of flexibility in selecting a cycle time. A branch and bound procedure is described for the fixed cycle time situation which takes advantage of the special structure of the problem to provide an efficient method capable of solving problems of practical interest. The effectiveness of the proposed procedure is demonstrated by application to an actual redesign of an assembly line for a major auto-industry supplier.
Individual versus Social Optimization in the Allocation of Customers to Alternative Servers
Authors: Bell Colin E. , Stidham Shaler
Published: November 2008

Customers arrive at a service area according to a Poisson process. An arriving customer must choose one of K servers without observing present congestion levels. The only available information about the kth server is the service time distribution (with expected duration μk−1) and the cost per unit time of waiting at the kth server (hk). Although service distributions may differ from server to server and need not be exponential, it is assumed that they share the same coefficient of variation. Individuals acting in self-interest induce an arrival rate pattern (λ̂1, λ̂2, …, λ̂k).

In contrast, the social optimum is the arrival rate pattern (λ1*, λ2*, …, λk*) which minimizes long-run average cost per unit time for the entire system. The main result is that λ̂k's and λ̂k*'s differ systematically. Individuals overload the servers with the smallest hk/μk values.

For an exponential service case with pre-emptive LIFO service an alternative charging scheme is presented which confirms that differences between individual and social optima occur precisely because individuals fail to consider the inconvenience that they cause to others.
Note—Mintzberg was Right!: A Replication and Extension of The Nature of Managerial Work
Authors: Kurke Lance B. , Aldrich Howard E.
Published: November 2008

This paper reports a replication of Mintzberg (McCall M. W., Jr. A. M. Morrison, R. L. Hannan. 1978. Studies of managerial work: results and methods. Technical Report #9, Center for Creative Leadership.). Structured observation with supplemental unstructured interviewing was used to study four top managers for one week each. Mintzberg's field study was supported by our replication in all important dimensions. Explanations for similarities and differences between organizations and industries are briefly discussed.
An Evaluation of Federal Policies Concerning Joint Ventures for Applied Research and Development
Authors: Joglekar Prafulla , Hamburg Morris
Published: November 2008

Current federal policies toward interfirm cooperation in research and development are designed to maximize society's use of available technology. Models of industry resource allocation behavior demonstrate that these policies are detrimental to the formation of risk sharing consortia for the development of new technology. The reason is that current policies often deprive applied research and development activities of their appropriability.

Analytical results suggest that, if appropriability is maintained, an underinvestment in applied research and development can be corrected, in most cases, simply by permitting firms to share the benefits and costs of projects in proportion to firms' investments. A permissive governmental posture may be particularly effective for industries consisting of a large number of firms with some firms relatively larger than others. Industries consisting of small numbers of relatively equal size firms may require government as a participant in consortia for applied research and development (appropriable but risky R&D activities).