bluuebunny/crossref_metadata_2025 huggingface dataset:
Simulations of fall and early winter in the stratosphere
Authors: Manney G. L. , Lahoz W. A. , Sabutis J. L. , O'neill A. , Steenman‐Clark L.
Published: January 2003

Mechanistic model simulations of fall/early winter in the northern (November and December) and southern (May and June) stratosphere are compared with observational analyses to examine the skill of the model in simulating the state of the stratosphere, including both means and variability in key fields, during six winters. While detailed success varies from year to year, the model produces a realistic climatology of and variability in the evolution of winds, geopotential heights, temperatures and wave propagation in the early‐winter stratosphere. The variability and mean fields agree well with those in longer data records. The northern hemisphere (NH) simulations show a small cold bias when averaged over the 6 years, while the southern hemisphere (SH) simulations show a larger warm bias. Greater detailed success in simulations of alternate NH winters suggests the possibility of greater model skill during the westerly quasi‐biennial oscillation phase, although the short record and complexity of interactions between tropics and high latitudes preclude definitive identification of such a relationship. A prominent failing of the model when using Rayleigh friction to parametrize gravity‐wave drag is an inability to correctly reproduce the latitudinal structure of the stratospheric jet above about 7 hPa; this failing can be alleviated by using a non‐orographic gravity‐wave drag parametrization, at the expense of frequently degrading agreement of planetary‐wave phases and amplitudes. The success of the model in reproducing realistic climatology and variability makes these simulations useful for more detailed studies of transport and vortex evolution in early winter.

Interhemispheric comparisons show that the early‐winter circulations are qualitatively similar in the NH and SH: they are dominated by a strengthening vortex, with most wave activity being in wave 1; they both have minor warmings in a preferred location and clustered around a preferred time—early December (early June) in the NH (SH); variability in the flow shows a crescent pattern of maximum variations near 60–80° latitude centred at the location of the minor warmings (over the dateline in the NH and in the South Pacific in the SH). Interhemispheric differences are primarily in the magnitude of the variability, with a more symmetric circulation and weaker minor warmings in the SH; this is in contrast to later in the winter, when large qualitative interhemispheric differences have been seen. Copyright © 2002 Royal Meteorological Society
Learning from patients with cancer and their spouses: a focus group study
Authors: Richardson Ann , Lee Liz , Birchall Martin
Published: January 2003

Guidelines, standards and protocols are now widespread in clinical oncology. Although based on randomized trial evidence where possible, most are based on professional consensus. However, the goal of incorporating patient and carer views meaningfully in such guidelines has proved elusive. We performed a qualitative, focus group study of patients with head and neck cancer, their carers and bereaved carers in the South and West of England. Patients and carers were asked to discuss their views on a series of professionally-derived standards for care. Pilot work showed that convening patient groups twice was more productive, allowing the first to discuss ‘the patient story/journey’ and the second to be more directed at specific standards, suitably translated into lay language. The results demonstrated that such methodology was applicable even to groups of patients traditionally viewed as ‘difficult’, such as laryngectomy patients, facially disfigured persons and bereaved carers. Participants were able to comment meaningfully on the standards and the process of head and neck cancer care as a whole. National (BAO-HNS) standards were modified with the results of the study. Focus groups, especially reconvened groups, are an effective way of gaining patient and carer views of professionally-derived standards in oncology. However, professional qualitative researcher help is required, and it is not necessarily ‘easy’ or cheap.
Dynamic Portfolio Selection of NPD Programs Using Marginal Returns
Authors: Loch Christoph H. , Kavadias Stylianos
Published: January 2003

Selecting program portfolios within a budget constraint is an important challenge in the management of new product development (NPD). Optimal portfolios are difficult to define because of the combinatorial complexity of project combinations. However, at the aggregate level of the strategic allocation of resources across product lines, investment in a program is not an all-or-nothing decision, but can be adjusted, resulting in a higher or lower program benefit (e.g., higher or lower quality). In some cases, resources can be adjusted even for individual projects.

With this insight, one can use marginal analysis to optimally allocate the scarce budget. This article develops a dynamic model of resource allocation, taking into account multiple interacting factors, such as independent or correlated, uncertain market payoffs that change over time, increasing or decreasing returns from the NPD investment, carry-over of the investment benefit over multiple periods, and interactions across market segments. We characterize optimal policies in closed form and derive qualitative decision rules for managers.
Investigating the Effects of Store-Brand Introduction on Retailer Demand and Pricing Behavior
Authors: Chintagunta Pradeep K. , Bonfrer André , Song Inseong
Published: January 2003

Researchers have recently been interested in studying the drivers of store-brand success as well as factors that motivate retailers to introduce store brands. In this paper, we study the effects of the introduction of a store-brand into a particular product category. Specifically, we are interested in the effect of store-brand introduction on the demand as well as on the supply side. On the demand side, we investigate the changes in preferences for the national brands and price elasticities in the category. On the supply side, we study the effects of the new entrant on the interactions between the national brand manufacturers and the retailer introducing the store brand, including how these interactions influence the retailer's pricing behavior. In doing so, we are also able to test whether the observed data are consistent with some of the commonly used assumptions regarding retailer pricing behavior. For the demand specification we use a random coefficients logit model that allows for consumer heterogeneity. The model parameters are estimated using aggregate data while explicitly accounting for endogeneity in retail prices.

Our empirical results obtained from the oats product category based on store-level data from a multistore retail chain indicate that the store-brand introduction generates notable changes within the category. The store-brand introduction coincides with an increase in the retailer's margins for the national brand. We find that the preferences for the national brand are relatively unaffected by the introduction of the store-brand. While consumers are, in general, more price sensitive (in terms of elasticities) than they were prior to store-brand introduction, a statistical test of the differences in mean price elasticities across stores and between the two regimes fails to reject the hypothesis of no change in these elasticities. Elasticities in specific stores however, do increase after the store brand is introduced. We also find that there is considerable heterogeneity in the preferences for the store-brand. On the supply side, we test several forms of manufacturer-retailer interactions to identify retailer pricing behavior most consistent with the data. Our results indicate that the data reject several, commonly imposed, forms of interactions. In examining the nature of manufacturer interactions with the retailer, we find that the manufacturer of the national brand appears to take a softer stance in its interactions with the retailer subsequent to store-brand entry. This finding is consistent with academic research and with articles in the popular press which suggest that the store brand enhances the retailer's bargaining ability vis-à-vis the manufacturers of the national brands. We also provide results from a second product category frozen pasta) that are largely consistent with those found in the oats category.
New Product Innovation with Multiple Features and Technology Constraints
Authors: Paulson Gjerde Kathy A. , Slotnick Susan A. , Sobel Matthew J.
Published: January 2003

We model a firm's decisions about product innovation, focusing on the extent to which features should be improved or changed in the succession of models that comprise a life cycle. We show that the structure of the internal and external environment in which a firm operates suggests when to innovate to the technology frontier. The criterion is maximization of the expected present value of profits during the life cycle. Computational studies complement the theoretical results and lead to insights about when to bundle innovations across features. The formalization was influenced by extensive interviews with managers in a high-technology firm that dominates its industry.
Aspiration-Level Adaptation in an American Financial Services Organization: A Field Study
Authors: Mezias Stephen J. , Chen Ya-Ru , Murphy Patrice R.
Published: January 2003

Using field data from an American financial services organization, we examined the effects of three important variables in Cyert and March's (1963) initial conceptualization of the aspiration-level adaptation process: The previous aspiration level, performance feedback, and social comparison. Past findings obtained in controlled contexts (Glynn et al. 1991; Lant 1992) have provided empirical support for the attainment discrepancy model (Lewin et al. 1944), which includes variables of the previous aspiration level and attainment discrepancy (i.e., performance feedback). We replicated these findings in the field: The effects of the previous aspiration level and attainment discrepancy on the current aspiration levels were significant and positive. In addition, we investigated the effect of social comparison using a variable based on the difference between the performance of the focal unit and the performance of comparable others (Greve 1998). Based on the assumption that decision makers in organizations will expect to observe similar performance levels among those in the same comparison group (Wood 1989), we posited that the effect of social comparison would be negative, refiecting managerial efforts to reduce performance discrepancies among similar units. The empirical results supported the prediction from this reasoning. We conclude by discussing implications of our findings for theory and research in organizational learning and the behavioral theory of the firm.
Strategic and Operational Benefits of Electronic Integration in B2B Procurement Processes
Authors: Mukhopadhyay Tridas , Kekre Sunder
Published: January 2003

Our goal is to assess the strategic and operational benefits of electronic integration for industrial procurement. We conduct a field study with an industrial supplier and examine the drivers of performance of the procurement process. Our research quantifies both the operational and strategic impacts of electronic integration in a B2B procurement environment for a supplier. Additionally, we show that the customer also obtains substantial benefits from efficient procurement transaction processing. We isolate the performance impact of technology choice and ordering processes on both the trading partners. A significant finding is that the supplier derives large strategic benefits when the customer initiates the system and the supplier enhances the system's capabilities. With respect to operational benefits, we find that when suppliers have advanced electronic linkages, the order-processing system significantly increases benefits to both parties.
Competition and Outsourcing with Scale Economies
Authors: Cachon Gérard P. , Harker Patrick T.
Published: January 2003

Scale economies are commonplace in operations, yet because of analytical challenges, relatively little is known about how firms should compete in their presence. This paper presents a model of competition between two firms that face scale economies; (i.e., each firm's cost per unit of demand is decreasing in demand). A general framework is used, which incorporates competition between two service providers with price- and time-sensitive demand (a queuing game), and competition between two retailers with fixed-ordering costs and pricesensitive consumers (an Economic Order Quantity game). Reasonably general conditions are provided under which there exists at most one equilibrium, with both firms participating in the market. We demonstrate, in the context of the queuing game, that the lower cost firm in equilibrium may have a higher market share and a higher price, an enviable situation. We also allow each firm to outsource their production process to a supplier. Even if the supplier's technology is no better than the firms' technology and the supplier is required to establish dedicated capacity (so the supplier's scale can be no greater than either firm's scale), we show that the firms strictly prefer to outsource. We conclude that scale economies provide a strong motivation for outsourcing that has not previously been identified in the literature.
Prospect Theory: Much Ado About Nothing?
Authors: Levy Moshe , Levy Haim
Published: January 2003

Prospect theory is a paradigm challenging the expected utility paradigm. One of the fundamental components of prospect theory is the S-shaped value function. The value function is mainly justified by experimental investigation of the certainty equivalents of prospects confined either to the negative or to the positive domain, but not of mixed prospects, which characterize most actual investments. We conduct an experimental study with mixed prospects, using, for the first time, recently developed investment criteria called Prospect Stochastic Dominance (PSD) and Markowitz Stochastic Dominance (MSD). We reject the S-shaped value function, showing that at least 62%–76% of the subjects cannot be characterized by such preferences. We find support for the Markowitz utility function, which is a reversed S-shaped function—exactly the opposite of the prospect theory value function. It is possible that the previous results supporting the S-shaped value function are distorted because the prospects had only positive or only negative outcomes, presenting hypothetical situations which individuals do not usually face, and which are certainly not common in financial markets.
Augmenting Conjoint Analysis to Estimate Consumer Reservation Price
Authors: Jedidi Kamel , Zhang Z. John
Published: January 2003

Consumer reservation price is a key concept in marketing and economics. Theoretically, this concept has been instrumental in studying consumer purchase decisions,competitive pricing strategies,and welfare economics. Managerially,knowledge of consumer reservation prices is critical for implementing many pricing tactics such as bundling,tar get promotions,nonlinear pricing,and one-to-one pricing,and for assessing the impact of marketing strategy on demand. Despite the practical and theoretical importance of this concept, its measurement at the individual level in a practical setting proves elusive.

We propose a conjoint-based approach to estimate consumer-level reservation prices. This approach integrates the preference estimation of traditional conjoint with the economic theory of consumer choice. This integration augments the capability of traditional conjoint such that consumers' reservation prices for a product can be derived directly from the individuallevel estimates of conjoint coefficients. With this augmentation,we can model a consumer's decision of not only which product to buy,but also whether to buy at all in a category. Thus, we can simulate simultaneously three effects that a change in price or the introduction of a new product may generate in a market: the customer switching effect,the cannibalization effect,and the market expansion effect. We show in a pilot application how this approach can aid product and pricing decisions. We also demonstrate the predictive validity of our approach using data from a commercial study of automobile batteries.
Hospital Operating Room Capacity Expansion
Authors: Lovejoy William S. , Li Ying
Published: January 2003

A large midwestern hospital is expecting an increase in surgical caseload. New operating room (OR) capacity can be had by building new ORs or extending the working hours in the current ORs. The choice among these options is complicated by the fact that patients, surgeons and surgical staff, and hospital administrators are all important stakeholders in the health service operation, and each has different priorities. This paper investigates the trade-offs among three performance criteria (wait to get on schedule, scheduled procedure start-time reliability, and hospital profits), which are of particular importance to the different constituencies. The objective is to determine how the hospital can best expand its capacity, acknowledging the key role that each constituency plays in that objective. En route, the paper presents supporting analysis for process improvements and suggestions for optimal participation-inducing staff contracts for extending OR hours of operation.
Optimal Dynamic Auctions for Revenue Management
Authors: Vulcano Gustavo , van Ryzin Garrett , Maglaras Costis
Published: January 2003

We analyze a dynamic auction, in which a seller with C units to sell faces a sequence of buyers separated into T time periods. Each group of buyers has independent, private values for a single unit. Buyers compete directly against each other within a period, as in a traditional auction, and indirectly with buyers in other periods through the opportunity cost of capacity assessed by the seller. The number of buyers in each period, as well as the individual buyers' valuations, are random. The model is a variation of the traditional single leg, multiperiod revenue management problem, in which consumers act strategically and bid for units of a fixed capacity over time.

For this setting, we prove that dynamic variants of the first-price and second-price auction mechanisms maximize the seller's expected revenue. We also show explicitly how to compute and implement these optimal auctions. The optimal auctions are then compared to a traditional revenue management mechanism—in which list prices are used in each period together with capacity controls—and to a simple auction heuristic that consists of allocating units to each period and running a sequence of standard, multiunit auctions with fixed reserve prices in each period. The traditional revenue management mechanism is proven to be optimal in the limiting cases when there is at most one buyer per period, when capacity is not constraining, and asymptotically when the number of buyers and the capacity increases. The optimal auction significantly outperforms both suboptimal mechanisms when there are a moderate number of periods, capacity is constrained, and the total volume of sales is not too large. The benefit also increases when variability in the dispersion in buyers' valuations or in the number of buyers per period increases.
Coordinating Mechanisms in Care Provider Groups: Relational Coordination as a Mediator and Input Uncertainty as a Moderator of Performance Effects
Authors: Hoffer Gittell Jody
Published: January 2003

This paper proposes a model of how coordinating mechanisms work, and tests it in the context of patient care. Consistent with organization design theory, the performance effects of boundary spanners and team meetings were mediated by relational coordination, a communication- and relationship-intensive form of coordination. Contrary to organization design theory, however, the performance effects of routines were also mediated by relational coordination. Rather than serving as a replacement for interactions, as anticipated by organization design theory, routines work by enhancing interactions among participants. Likewise, all three coordinating mechanisms, including routines, were found to be increasingly effective under conditions of uncertainty.
Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions
Authors: Ang Soon , Slaughter Sandra , Yee Ng Kok
Published: January 2003

Compensation is critical in attracting and retaining information technology (IT) professionals. However, there has been very little research on IT compensation. Juxtaposing theories of compensation that focus on human capital endowments and labor market segmentation, we hypothesize multilevel and cross-level determinants of compensation. We use hierarchical linear modeling to analyze archival salary data for 1,576 IT professionals across 39 institutions. Results indicate that compensation is directly determined by human capital endowments of education and experience. Institutional differentials do not directly drive compensation, but instead moderate the relationship of human capital endowments to compensation. Large institutions pay more than small institutions to IT professionals with more education, while small institutions pay more than large institutions to IT professionals with less education. Not-for-profit institutions pay more than for-profits to IT professionals with more or IT-specific education. Further, information-intensive institutions pay more than non information-intensive institutions to IT professionals with more or IT-specific education. We interpret these results in the context of institutional rigidity, core competencies, and labor shortages in the IT labor market.
Effective Zero-Inventory-Ordering Policies for the Single-Warehouse Multiretailer Problem with Piecewise Linear Cost Structures
Authors: Chan Lap Mui Ann , Muriel Ana , Shen Zuo-Jun Max , Simchi-Levi David , Teo Chung-Piaw
Published: January 2003

We analyze the problem faced by companies that rely on TL (Truckload) and LTL (Less than Truckload) carriers for the distribution of products across their supply chain. Our goal is to design simple inventory policies and transportation strategies to satisfy time varying demands over a finite horizon, while minimizing system wide cost by taking advantage of quantity discounts in the transportation cost structures. For this purpose, we study the cost effectiveness of restricting the inventory policies to the class of zero-inventory-ordering (ZIO) policies in a single-warehouse multiretailer scenario in which the warehouse serves as a cross-dock facility. In particular, we demonstrate that there exists a ZIO inventory policy whose total inventory and transportation cost is no more than 4/3 (5.6/4.6 if transportation costs are stationary) times the optimal cost. However, finding the best ZIO policy is an NP hard problem as well. Thus, we propose two algorithms to find an effective ZIO policy: An exact algorithm whose running time is polynomial for any fixed number of retailers, and a linear-programming-based heuristic whose effectiveness is demonstrated in a series of computational experiments. Finally, we extend the worst-case results developed in this paper to systems in which the warehouse does hold inventory.
Return on Assets Loss from Situational and Contingency Misfits
Authors: Burton Richard M. , Lauridsen Jørgen , Obel Børge
Published: January 2003

We develop a rule-based contingency misfit model and related hypotheses to test empirically the Burton and Obel (1998) multi contingency model for strategic organizational design. The model is a set of “if-then” misfit rules, in which misfits lead to a loss in performance; they are complements to the strategy and organizational contingency theory fit rules. Using data from 224 small- and medium-sized Danish firms, misfits are categorized and identified. Then, performance hypotheses are developed and tested using regression models. We confirm the hypotheses that firms with situational misfits or contingency misfits, or both, incur performance losses in return on assets compared with firms with no misfits. Contrary to our hypotheses, we did not find that additional misfits lead to increased performance loss. Our results suggest that just one misfit of any kind may significantly compromise performance. These results yield a deeper understanding of organizational contingency theory, as well as implications for the rule-based fit-misfit organizational design model.
Optimal Stock Allocation for a Capacitated Supply System
Authors: de Véricourt Francis , Karaesmen Fikri , Dallery Yves
Published: January 2003

We consider a capacitated supply system that produces a single item that is demanded by several classes of customers. Each customer class may have a different backorder cost, so stock allocation arises as a key decision problem. We model the supply system as a multi customer make-to-stock queue. Using dynamic programming, we show that the optimal allocation policy has a simple and intuitive structure. In addition, we present an efficient algorithm to compute the parameters of this optimal allocation policy. Finally, for a typical supply chain design problem, we illustrate that ignoring the stock allocation dimension—a frequently encountered simplifying assumption—can lead to incorrect managerial decisions.
Product Design with Multiple Quality-Type Attributes
Authors: Kim Kilsun , Chhajed Dilip
Published: January 2003

We consider a product line design problem with multiple attributes for a monopolist serving a market with two customer segments. Products are designed with quality type attributes for which more is always better than less. By considering multiple attributes, we derive a measure of multidimensional customer preference and offer insights into the optimal product design. When customers'preferences exhibit different orders in different attributes, our results show that products are differentiated horizontally where no one product is better than the other with respect to all attributes, and that there exists a region where the first-best solution for the monopolist is feasible despite the problem of cannibalization. Furthermore, single-product offering strategies are never optimal, so pooling of customer segments or reduction of the number of segments served will not occur.
Comment on “Generating Scenario Trees for Multistage Decision Problems”
Authors: Klaassen Pieter
Published: January 2003

In models of decision making under uncertainty, one typically has to approximate the uncertainties by a limited number of discrete outcomes. Høyland and Wallace (2001) formulate a nonlinear programming problem to generate such a limited number of discrete outcomes while satisfying specified statistical properties. They have developed and employed this method for a stochastic multistage asset-allocation problem. When the method is applied to such financial optimization problems under uncertainty, we argue here that it does not suffice to match statistical properties. To obtain realistic outcomes, the (limited) description of the uncertainty in such models should also exclude arbitrage opportunities, and thereby be consistent with financial asset pricing theory. We illustrate that the method proposed by Høyland and Wallace can result in arbitrage opportunities in the scenario tree if only statistical properties are imposed. We show how one can check ex post for the presence of arbitrage opportunities in a scenario tree by checking for the existence of solutions to sets of linear equations. Arbitrage opportunities can also be precluded ex ante in the scenario tree by adding constraints to the nonlinear programming problem of Høyland and Wallace.
The Transfer of Experience in Groups of Organizations: Implications for Performance and Competition
Authors: Ingram Paul , Simons Tal
Published: January 2003

Groups of organizations are pervasive, although there is little systematic knowledge about how they affect their members. We examine one dimension of the operation of organization groups, the transfer of experience. Our core argument is that organization groups may create benefits for their members, but problems for those outside the group. Within the group they can facilitate the transfer of experience among their members by creating mechanisms for communication, incentives for helping, and by promoting understanding. The predicted pattern of experience transfer should improve performance of those within the group, but also has implications for those outside it. Experience accumulated in one organization group strengthens the competitiveness of its organizations, and thereby harms competitors outside the group. Thus, organization groups are fundamental both for the functioning of their members and the competitive dynamics of their industries. Our longitudinal analysis of the profitability of kibbutz agriculture supports both these claims. Between 1954 and 1965 (the years of this study), almost all kibbutzim were part of organization groups. Kibbutzim became more profitable as a function of the experience of others in their group. Their profitability was reduced, however, as a function of experience of others outside their group.
Knowledge Seeking and Location Choice of Foreign Direct Investment in the United States
Authors: Chung Wilbur , Alcácer Juan
Published: January 2003

To what extent do firms go abroad to access technology available in other locations? This paper examines whether and when state technical capabilities attract foreign investment in manufacturing from 1987-1993. We find that on average state R&D intensity does not attract foreign direct investment. Most investing firms are in lower-tech industries and locate in low R&D intensity states, suggesting little interest in state technical capabilities. In contrast, we find that firms in research-intensive industries are more likely to locate in states with high R&D intensity. Foreign firms in the pharmaceutical industry value state R&D intensity the most, at a level twice that of firms in the semiconductor industry, and four times that of electronics firms. Interestingly, not only firms from technically lagging nations, but also some firms from technically leading nations are attracted to R&D intensive states. This suggests that beyond catching up, firms use knowledge-seeking investments also to source technical diversity.
Using a Bayesian Approach to Quantify Scale Compatibility Bias
Authors: Anderson Richard M. , Hobbs Benjamin F.
Published: January 2003

This paper proposes a new analytical framework to quantify and correct for scale compatibility bias in the assessment of trade-off weights in multiattribute value analysis. The procedure is demonstrated with an application to a fisheries management problem. Trade-off judgments are elicited from a group of fisheries experts with management responsibility in the Lake Erie basin. Then we use a Bayesian method to compute posterior probability distributions of attribute weights. In computing the Bayesian weights, our measurement model assumes that the weight ratios produced by each respondent's judgments are subject to random error and an unknown scale compatibility bias. Ratios are log-transformed and analyzed by a Bayesian linear model with a noninformative prior distribution. Posterior distributions are then developed for the weights and the bias. We estimate the compatibility bias for each person and, in most cases, it is found to be large and in the predicted direction, suggesting the importance of its consideration in deriving trade-off weights. In addition, the Bayesian framework is shown to be useful for quantifying the value of additional information about multiattribute weights. Finally, a simple heuristic procedure for assessing the weights appears to be effective in eliminating the bias.
Solving Multi-Item Lot-Sizing Problems with an MIP Solver Using Classification and Reformulation
Authors: Wolsey Laurence A.
Published: January 2003

Based on research on the polyhedral structure of lot-sizing models over the last 20 years, we claim that there is a nontrivial fraction of practical lot-sizing problems that can now be solved by nonspecialists just by taking an appropriate a priori reformulation of the problem, and then feeding the resulting formulation into a commercial mixed-integer programming solver.

This claim uses the fact that many multi-item problems decompose naturally into a set of single-item problems with linking constraints, and that there is now a large body of knowledge about single-item problems. To put this knowledge to use, we propose a classification of lot-sizing problems (in large part single-item) and then indicate in a set of tables, what is known about a particular problem class and how useful it might be. Specifically, we indicate for each class (i) whether a tight extended formulation is known, and its size; (ii) whether one or more families of valid inequalities are known defining the convex hull of solutions, and the complexity of the corresponding separation algorithms; and (iii) the complexity of the corresponding optimization algorithms (which would be useful if a column generation or Lagrangian relaxation approach was envisaged).

Three distinct multi-item lot-sizing instances are then presented to demonstrate the approach, and comparative computational results are presented. Finally, we also use the classification to point out what appear to be some of the important open questions and challenges.
Approximating Multiobjective Knapsack Problems
Authors: Erlebach Thomas , Kellerer Hans , Pferschy Ulrich
Published: January 2003

For multiobjective optimization problems, it is meaningful to compute a set of solutions covering all possible trade-offs between the different objectives. The multiobjective knapsack problem is a generalization of the classical knapsack problem in which each item has several profit values. For this problem, efficient algorithms for computing a provably good approximation to the set of all nondominated feasible solutions, the Pareto frontier, are studied.

For the multiobjective one-dimensional knapsack problem, a practical fully polynomial-time approximation scheme (FPTAS) is derived. It is based on a new approach to the single-objective knapsack problem using a partition of the profit space into intervals of exponentially increasing length. For the multiobjective m-dimensional knapsack problem, the first known polynomial-time approximation scheme (PTAS), based on linear programming, is presented.
Perturbing Nonnormal Confidential Attributes: The Copula Approach
Authors: Sarathy Rathindra , Muralidhar Krishnamurty , Parsa Rahul
Published: January 2003

Protecting confidential, numerical data in databases from disclosure is an important issue both for commercial organizations as well as data-gathering and disseminating organizations (such as the Census Bureau). Prior studies have shown that perturbation methods are effective in protecting such confidential data from snoopers. Perturbation methods have to provide legitimate users with accurate (unbiased) information, and also provide adequate security against disclosure of confidential information to snoopers. For databases described by nonnormal multivariate distributions, existing perturbation methods do not provide unbiased characteristics. In this study, we develop a copula-based perturbation method capable of maintaining the marginal distribution of perturbed attributes to be the same before and after perturbation. In addition, this method also preserves the rank order correlation between the confidential and nonconfidential attributes, thereby maintaining monotonic relationships between attributes. The method proposed in this study provides a high level of protection against inferential disclosure. An investigation of the new perturbation method for simulated databases shows that the method performs effectively. The methodology presented in this study represents a signicant step toward improving the practical applicability of data perturbation methods.
Capacity Management in Decentralized Networks
Authors: Masuda Yasushi , Whang Seungjin
Published: January 2003

Bottleneck analysis is a useful tool in capacity planning for centrally controlled network systems. However, under a decentralized network where individual users are allowed to select their own routes, straightforward application of bottleneck analysis does not necessarily yield an optimal performance. It may even hurt the system performance—an aspect of Braess's paradox. We investigate the capacity expansion problem for a decentralized system with general network topology. To this end, we first discuss the short-run problem and show that the externality pricing solves the joint problem of demand and routing control. We then study the capacity expansion/reduction problem for decentralized systems that may or may not be optimally controlled in the short run.
Note: Optimality Conditions for an (s, S) Policy with Proportional and Lump-Sum Penalty Costs
Authors: Çetinkaya Sila , Parlar Mahmut
Published: January 2003

We consider the optimality of the (s, S) policy for a periodic-review stochastic inventory problem with two types of shortage costs. The problem may arise in a rush-order application at a bank branch where the emergency provision costs during a foreign currency stockout are represented by proportional and lump-sum penalties. Aneja and Noori (1987) analyzed this problem and presented a set of conditions for the convexity of a particular function and made a claim about the K-convexity of another function to prove the optimality of the (s, S) policy. We show that because the function that is claimed to be K-convex is actually concave over a subset of its domain, Aneja and Noori's arguments cannot be used to prove the optimality of the (s, S) policy. However, we argue that Aneja and Noori's problem is equivalent to the typical lost-sales problem, and using this equivalence, we .nd a simple convexity condition that assures the optimality of the (s, S) policy.
Note on “Guarantees in Auctions: The Auction House as Negotiator and Managerial Decision Maker”
Authors: Greenleaf Eric A. , Ma Jun. , Qiu Wanhua. , Rao Ambar G. , Sinha Atanu R.
Published: January 2003

In this note, we identify two errors in Greenleaf, Rao, and Sinha's (1993) analysis of negotiation of guarantees in auctions. This note provides a high-level but self-contained summary of the revised results. We find that, in contrast with the earlier claim, guaranteed auctions lead to greater total expected revenue than conventional auctions. The ability to bargain over guarantee values and commissions certainly benefits sellers but may hurt the profits of auction houses. We relate these results to recent events in auction markets.
Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities
Authors: King Andrew A. , Tucci Christopher L.
Published: January 2003

Increasingly, technological innovation creates markets for new products and services. To survive, firms must respond to these new markets. How do firms develop the capabilities necessary to succeed in such changing conditions? Some suggest that experience with previous entry builds such capabilities. Others suggest that capabilities arise from experience producing and selling to existing markets. The role of managers is also debated. Some argue that experience with existing markets causes managers to miss entry opportunities. Others argue that managers enter new markets when their firm possesses the experience needed to compete effectively.

In this paper, we explore these issues by investigating entry patterns in the disk-drive industry. We investigate the effect of experience in existing markets and experience with previous market entry. We find that experience in previous markets increased the probability that a firm would enter a new market. We show that this experience had greater value if the firm entered the new market. We infer that managers chose to enter these markets to obtain this increase in value.
Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint
Authors: Ho Teck-Hua , Savin Sergei , Terwiesch Christian
Published: January 2003

The Bass diffusion model is a well-known parametric approach to estimating new product demand trajectory over time. This paper generalizes the Bass model by allowing for a supply constraint. In the presence of a supply constraint, potential customers who are not able to obtain the new product join the waiting queue, generating backorders and potentially reversing their adoption decision, resulting in lost sales. Consequently, they do not generate the positive “word-of-mouth” that is typically assumed in the Bass model, leading to significant changes in the new product diffusion dynamics.

We study how a firm should manage its supply processes in a new product diffusion environment with backorders and lost sales. We consider a make-to-stock production environment and use optimal control theory to establish that it is never optimal to delay demand fulfillment. This result is interesting because immediate fulfillment may accelerate the diffusion process and thereby result in a greater loss of customers in the future. Using this result, we derive closed-form expressions for the resulting demand and sales dynamics over the product life cycle. We then use these expressions to investigate how the firm should determine the size of its capacity and the time to market its new product. We show that delaying a product launch to build up an initial inventory may be optimal and can be used as a substitute for capacity. Also, the optimal time to market and capacity increase with the coefficients of innovation and imitation in the adoption population. We compare our optimal capacity and time to market policies with those resulting from exogeneous demand forecasts in order to quantify the value of endogenizing demand.
Customer Loyalty and Supplier Quality Competition
Authors: Gans Noah
Published: January 2003

We develop a model of customer choice in response to random variation in quality. The choice model yields closed-form expressions which reflect the effect of competing suppliers' service quality on the long-run fraction of purchases a customer makes at the various competitors. We then use the expressions as the basis of simple normative models for suppliers seeking to maximize their long-run average profits. The results provide insight into the effect of switching behavior on the service levels offered by competing suppliers.
A Dynamic IT Adoption Model for the SOHO Market: PC Generational Decisions with Technological Expectations
Authors: Kim Namwoon , Han Jin K. , Srivastava Rajendra K.
Published: January 2003

The small-office/home-office (SOHO) professionals comprise the fastest growing segment in the labor force today. Typically being a one-person business based at home, SOHO owners mostly rely on office information technology to single handedly run their entire operation. Despite the segment's ostensibly growing dependence and influence on the information technology (IT) industry, still very little is known about the dynamics between SOHO and IT products. With the purpose of addressing this void, we investigate the SOHO professionals' adoption patterns of multigenerational IT products. Accordingly, we develop and empirically estimate an individual SOHO-level initial- and repeat-purchase logit model that captures the procurement patterns for successive generations of technological products, namely the PC category. Specifically, we find that SOHO professionals' procurement choices are influenced by a number of salient dimensions (i.e., income, performance, price, interpurchase time, network externalities). Furthermore, some SOHO owners are found to have a preference for a future (expected) generation (over a currently available one), which is explained via their business dispositions (i.e., technology orientation, result orientation, search orientation) toward accepting technological incertitude.
Make to Order or Make to Stock: Model and Application
Authors: Rajagopalan S.
Published: January 2003

Some firms make all their products to order while others make them to stock. There are a number of firms that maintain a middle ground, where some items are made to stock and others are made to order. This paper was motivated by a consumer product company faced with the decision about which items to make to stock and which ones to make to order, and the inventory and production policy for the make-to-stock items. The production environment is characterized by multiple items, setup times between the production of consecutive items, limited capacity, and congestion effects. In such an environment, making an item to order reduces inventory costs for that item, but might increase the lot size and inventory costs for the items made to stock. Also, lead times increase because of congestion effects, resulting in higher safety stocks for make-to-stock items and lower service levels for make-to-order items, thus leading to a complex trade-off. We develop a nonlinear, integer programming formulation of the problem. We present an efficient heuristic to solve the problem, which was motivated by key results for a special case of the problem without congestion effects that can be solved optimally. We also develop a lower bound to evaluate the performance of the heuristic. A computational study indicates that the heuristic performs well. We discuss the application of the model in a large firm and the resulting insights. We also provide insights into the impact of various problem parameters on the make-to-order versus make-to-stock decisions using a computational study. In particular, we find that the average number of setups of an item selected for make-to-stock production is always less than half the average number of setups of the item if it were to be made to order. Also, factors other than an item's demand, such as its setup time, processing time, and unit holding cost, impact the make-to-order versus make-to-stock decision.
Managing Capacity and Inventory Jointly in Manufacturing Systems
Authors: Bradley James R. , Glynn Peter W.
Published: January 2003

In this paper, we develop approximations that yield insight into the joint optimization of capacity and inventory,and how the optimal inventory policy varies with capacity investment in a single-product, single-station, make-to-stock manufacturing system in which inventory is managed through a base-stock policy. We allow for a correlated demand stream as we analyze our models in an asymptotic regime,in which the penalty and holding costs are small relative to the cost of capacity. Although our approximations are asymptotically correct,our Brownian approximation is accurate even under moderate traffic intensity.
Exploring the Locus of Profitable Pollution Reduction
Authors: King Andrew , Lenox Michael
Published: January 2003

In this paper, we explore the locus of profitable pollution reduction. We propose that managers underestimate the full value of some means of pollution reduction and so under exploit these means. Based on evidence from previous studies, we argue that waste prevention often provides unexpected innovation offsets, and that onsite waste treatment often provides unexpected cost. We use statistical methods to test the direction and significance of the relationship between the various means of pollution reduction and profitability. We find strong evidence that waste prevention leads to financial gain, but we find no evidence that firms profit from reducing pollution by other means. Indeed, we find evidence that the bene fits of waste prevention alone are responsible for the observed association between lower emissions and profitability.