bluuebunny/crossref_metadata_2025 huggingface dataset:
Optimal Pricing and Lot-Sizing Under Conditions of Perishability and Partial Backordering
Authors: Abad P. L.
Published: November 2008

We formulate a generalized model of dynamic pricing and lot-sizing by a reseller who sells a perishable good. We assume that when it is economic to backlog demand, the reseller can plan for periods of shortage during which demand can be partially backordered. When the good is highly perishable, the reseller may need to backlog demand in order to market the good at a reasonable price. We present a simple solution procedure for solving the optimization problem. The procedure entails solving first a single nonlinear equation and then, if required, two nonlinear equations.
A Reference Lottery Metric for Valuing Health
Authors: Magat Wesley A. , Viscusi W. Kip , Huber Joel
Published: November 2008

This study utilizes reference lotteries on life and death to establish a death-equivalent metric for valuing long-term health effects. We use a computer-based survey approach to elicit choices among residential locations that pose different risks of chronic disease and dying in an automobile accident. From paired choices between different locations, we infer their rates of trade-off between reducing the risks of chronic diseases and the automobile death risk. The values of reducing the risks from two diseases, a nerve disease (peripheral neuropathy) and lymphoma (cancer of the lymph system), are measured in terms of both trade-off rates with the risk of an automobile death and with dollars.

While the use of reference lotteries for monetary outcomes to establish a utility metric is well established for monetary outcomes, our results suggest that reference lotteries on life and death can also be applied with decision-makers facing realistic choices to construct a utility metric for valuing health status. The results were corroborated by a strong positive correlation between the risk-risk trade-off values and relative aversion scores for the different health outcomes, as well as by the relative values of avoiding the three diseases in our study.
Divestiture of Nippon Telegraph and Telephone
Authors: Sueyoshi Toshiyuki
Published: November 2008

This article discusses whether the Japanese government should break up NTT (Nippon Telegraph & Telephone) in 1995, as the U.S. federal government compelled AT&T (American Telephone & Telegram) to break itself into toll and local telephone companies in 1984. The divestiture of NTT has long been a major industrial policy issue in Japan since the common carrier was privatized in 1985. The governmental decision to divest it may influence not only the Japanese telecommunications infrastructure, but also the global telecommunications and information industries in the world, where many common carriers are now facing an environmental change from regulation to competition. A unique feature of this study is that it employs eight different estimation techniques to obtain a cost function of NTT, so that this research avoids a methodological bias occurring in many empirical studies. This study confirms that NTT has maintained cost subadditivity, but it has failed to establish the status of a natural monopoly in the observed time period. However, it also finds that the NTT divestiture will not produce a price-reducing benefit to Japanese telecommunications consumers. This research result will serve as empirical evidence for guiding the governmental review of this large-scale industrial policy issue in Japan.
Mailing Decisions in the Catalog Sales Industry
Authors: Bitran Gabriel R. , Mondschein Susana V.
Published: November 2008

Catalog sales are among the fastest growing businesses in the U.S. The most important asset a company in this industry has is its list of customers, called the house list. Building a house list is expensive, since the response rate of names from rental lists is low. Cash management therefore plays a central role in this capital intensive business.

This paper studies optimal mailing policies in the catalog sales industry when there is limited access to capital. We consider a stochastic environment given by the random responses of customers and a dynamic evolution of the house list. Given the size of real problems, it is impossible to compute the optimal solutions. We therefore develop a heuristic based on the optimal solutions of simplified versions of the problem. The performance of this heuristic is evaluated by comparing its outcome with an upper bound derived for the original problem. Computational experiments show that it behaves satisfactorily.

The methodology presented permits the evaluation of potential catalog ventures thus proving useful to entrepreneurs in this industry.
Evoking Information in Probability Assessment: Knowledge Maps and Reasoning-Based Directed Questions
Authors: Browne Glenn J. , Curley Shawn P. , Benson P. George
Published: November 2008

To assess probabilities in decision analysis, and for decision making in general, decision makers must evoke and apply relevant information. Decision analysts have developed a variety of structuring tools to aid decision makers in these tasks, including influence diagrams and knowledge maps. However, despite their pervasive use in practice, there have been no reported empirical tests of these tools. One goal of the present research was to provide an empirical test of the evocative knowledge map methodology. Second, a theoretical analysis of probability assessment was used to develop a new prescriptive elicitation technique. This technique uses a theoretically-grounded set of directed questions to help decision makers evoke information for probability assessment. Experimental results showed that both the knowledge map and the new directed questions methodology elicited a higher quantity and quality of information from decision makers engaged in probability assessment tasks than did a control condition. Further, the information elicited by the two techniques was qualitatively different, suggesting that the two methods might profitably be used as complementary elicitation techniques.
Modeling the Domestic Distribution Network for Illicit Drugs
Authors: Caulkins Jonathan P.
Published: November 2008

This paper presents a simple economic model of a drug dealer's decision about how many customers to supply. The model relates the number of customers (i.e., the branching factor of the distribution network) to a quantity discount factor describing the extent to which prices are marked up from one distribution level to the next and the ratio of selling costs to product costs. Solving the model allows one to infer characteristics of the domestic distribution network from more readily observable characteristics of the markets and, thereby, to gain insight into how drug control interventions might work.
Production Quotas as Bounds on Interplant JIT Contracts
Authors: Duenyas Izak , Hopp Wallace J. , Bassok Yehuda
Published: November 2008

We consider the situation of a supplier plant whose customer plants desire just-in-time (JIT) deliveries. Randomness in both the production and demand processes make satisfying every demand that might occur in true JIT fashion impossible. Therefore, supplier plants typically negotiate bounds on JIT contracts with their customers. In this paper, we focus on the use of “quotas” or “target inventory levels” as a mechanism for establishing such bounds. That is, the supplier firm is responsible for meeting periodic demands up to the quota, but not beyond. In this paper, we consider the problem of setting an appropriate quota from the perspective of the supplier plant and interpret our results in the context of the negotiation process between the supplier and its customers. Under the assumption that “safety capacity” (i.e., overtime or a vendoring option) is available, we develop two models that address this problem. The first model assumes that quota shortfalls cannot be carried over to the next regular time production period and are made up with overtime/vendoring, which incurs fixed plus variable costs. The second model assumes that shortages can be backlogged to the next regular time production period at a cost. We use numerical examples to demonstrate how the models we developed were used by a clutch supplier to a large auto manufacturer to negotiate its JIT contracts.
New Benchmark Results for the Resource-Constrained Project Scheduling Problem
Authors: Demeulemeester Erik L. , Herroelen Willy S.
Published: November 2008

This paper reports on new insights derived from computational results obtained with an updated version of the branch-and-bound procedure previously developed by Demeulemeester and Herroelen (Demeulemeester, E., W. Herroelen. 1992. A branch-and-bound procedure for the multiple resource-constrained project scheduling problem. Management Sci. 38 1803–1818.) for solving the resource-constrained project scheduling problem (RCPSP). The new code fully exploits the advantages of 32-bit programming provided by recent compilers running on platforms such as Windows NT® and OS/2®: flat memory, increased addressable memory, and fast program execution. We study the impact of three important variables on the computation time for the RCPSP: addressable computer memory, the search strategy (depth-first, best-first, or hybrid), and the introduction of a stronger lower bound. We compare the results obtained by a truncated branch-and-bound procedure with the results generated by the minimum slack time heuristic and report on the dependency of its solution quality on the allotted CPU time.
A Polyhedral Approach to the Asymmetric Traveling Salesman Problem
Authors: Fischetti Matteo , Toth Paolo
Published: November 2008

Several branch-and-bound algorithms for the exact solution of the asymmetric traveling salesman problem (ATSP), based on the assignment problem (AP) relaxation, have been proposed in the literature. These algorithms perform very well for some instances (e.g., those with uniformly random integer costs), but very poorly for others. The aim of this paper is to evaluate the effectiveness of a branch-and-cut algorithm exploiting ATSP-specific facet-defining cuts, to be used to attack hard instances that cannot be solved by the AP-based procedures from the literature. We present new separation algorithms for some classes of facet-defining cuts, and a new variable-pricing technique for dealing with highly degenerate primal LP problems. A branch-and-cut algorithm based on these new results is designed and evaluated through computational analysis on several classes of both random and real-world instances. The outcome of the research is that, on hard instances, the branch-and-cut algorithm clearly outperforms the best AP-based algorithms from the literature.
Information Technology Impact on Process Output and Quality
Authors: Mukhopadhyay Tridas , Rajiv Surendra , Srinivasan Kannan
Published: November 2008

Our work represents one of the first attempts to assess the impact of IT (information technology) on both process output and quality. We examine the optical character recognition and barcode sorting technologies in the mail sorting process at the United States Postal Service. Our analysis is at the application level, and thus does not involve the aggregation of IT impact over multiple processes. We use data from 46 mail processing centers over 3 years to study the IT impact. We also use a set of factors in our model to account for differences in input characteristics. Our results show that mail sorting output significantly increases with higher use of IT. In addition, IT improves quality which in turn enhances output. We also find that input characteristics exert considerable influence in determining the output and quality of the mail sorting operation. For example, while absenteeism tends to decrease output and quality due to its disruptive consequences, a higher fraction of barcoded mail seems to enhance both performance measures.
The Substitution of Information Technology for Other Factors of Production: A Firm Level Analysis
Authors: Dewan Sanjeev , Min Chung-ki
Published: November 2008

Fueled by its constant technological and price improvements, information technology (IT) is displacing other inputs in the production of goods and services. By 1994, IT accounts for over 15% of fixed investments by the U.S. private sector, and the ratio of new IT investments to labor costs is approaching 5% (1990 dollar basis). The ability to take advantage of improvements in IT is determined in part by the substitutability of IT for other factors of production.

This paper builds on the empirical framework of Brynjolfsson and Hitt (Brynjolfsson, E., L. Hitt. 1995. Information technology as a factor of production the role of differences among firms. Econom. Innovations and New Tech. 3 183–199.) and extends it to jointly estimate output and substitution elasticities using the CES-translog production function. Our primary source of IT-related data is the IDG/Computerworld annual survey data on IS spending by large U.S. firms, for the period 1988 to 1992, previously analyzed by Brynjolfsson and Hitt ([Brynjolfsson, E., L. Hitt. 1995. Information technology as a factor of production the role of differences among firms. Econom. Innovations and New Tech. 3 183–199.], [Brynjolfsson, E., L. Hitt. 1996. Paradox lost? Firm-level evidence on the returns to information systems spending. Management Sci. 42(4) 541–558.]) and Lichtenberg (Lichtenberg, F. R. 1995. The output contributions of computer equipment and personnel a firm level analysis. Econom. Innovations and New Tech. 3 201–217.).

A key result is that IT capital is a net substitute for both ordinary capital and labor, suggesting that the factor share of IT in production will grow to more significant levels over time. We confirm earlier findings of positive returns to IT investment for this data set. Further, we find excess returns on IT investment relative to labor input and some evidence of excess returns relative to ordinary capital. Taken together, these results shed new light on the productivity paradox of IT and on the growth of information intensity across the economy as firms take advantage of the continuing improvements in IT.
Scheduling Workforce and Workflow in a High Volume Factory
Authors: Berman Oded , Larson Richard C. , Pinker Edieal
Published: November 2008

We define a high volume factory to be a connected network of workstations, at which assigned workers process work-in-progress that flows at high rates through the workstations. A high rate usually implies that each worker processes many pieces per hour, enough so that work can be described as a deterministic hourly flow rate rather than, say, a stochastic number of discrete entities. Examples include mail processing and sorting, check processing, telephoned order processing, and inspecting and packaging of certain foods. Exogenous work may enter the factory at any workstation according to any time-of-day profile. Work-in-progress flows through the factory in discrete time according to Markovian routings. Workers, who in general are cross-trained, may work part time or full time shifts, may start work only at designated shift starting times, and may change job assignments at mid shift. In order to smooth the flow of work-in-progress through the service factory, work-in-progress may be temporarily inventoried (in buffers) at work stations. The objective is to schedule the workers (and correspondingly, the workflow) in a manner that minimizes labor costs subject to a variety of service-level, contractual and physical constraints. Motivated in part by analysis techniques of discrete time linear time-invariant (LTI) systems, an object-oriented linear programming (OOLP) model is developed. Using exogenous input work profiles typical of large U.S. mail processing facilities, illustrative computational results are included.
Note. Optimal Promotion Strategies: A Demand-Sided Characterization
Authors: Simester Duncan
Published: November 2008

We generalize Narasimhan's (Narasimhan, Chakravarthi. 1988. Competitive promotional strategies. J. Bus. 61(4) 427–449.) model of retail promotion to include multiple products and general demand functions. Doing so allows us to further characterize optimal promotion strategies. We find that firms prefer to offer deeper promotions on products for which switching customers have stronger demand than loyal customers and/or for which the price sensitivity of demand is high for both switching and loyal customers. We further show that firms will offer deeper promotions on products which enjoy complementary relationships with other products that they sell rather than on products for which the firm sells a substitute.
Identifying Controlling Features of Engineering Design Iteration
Authors: Smith Robert P. , Eppinger Steven D.
Published: November 2008

Engineering design often involves a very complex set of relationships among a large number of coupled problems. It is this complex coupling that leads to iteration among the various engineering tasks in a large project. The design structure matrix (DSM) is useful in identifying where iteration is necessary. The work transformation matrix model developed in this paper is a powerful extension of the DSM method which can predict slow and rapid convergence of iteration within a project, and predict those coupled features of the design problem which will require many iterations to reach a technical solution. This model is applied to an automotive brake-system development process in order to illustrate the model's utility in describing the main features of an actual design process.
Prescribing Tactical Response for Oil Spill Clean Up Operations
Authors: Wilhelm W. E. , Srinivasa A. V.
Published: November 2008

The Tactical Decision Problem (TDP) associated with oil spill clean up operations prescribes the time-phased allocation of available components over the planning horizon so that the clean up requirement at each critical time point is met. The objective is to minimize response time to allow for the most effective clean up possible. In this paper, we formulate the TDP as a general integer program. We devise a method based on graph theory to efficiently generate response system types (RSTs), including constituent components, the locations from which each of the component types is obtained, and the staging area at which that RST is composed. We present several pre-processing methods and derive expressions for bounds on decision variables to facilitate solution. We then develop two heuristics to obtain approximate solutions to the TDP. The first heuristic is an LP-based method, while the second uses a combination of LP relaxation and branch and bound. The two heuristics are compared on problems that are based on realistic scenarios representing application in the Galveston Bay Area.
Time Versus Market Orientation in Product Concept Development: Empirically-Based Theory Generation
Authors: Burchill Gary , Fine Charles H.
Published: November 2008

In collaboration with industry partners, a normative model of the product concept decision process was developed, supported with tools and techniques, and codified as a decision support process for product development teams. This process (Concept Engineering) was then introduced into a number of product development teams in different companies. A comparative analysis of actual product concept development activities, with and without the use of Concept Engineering, was conducted. All of the observed teams viewed time to market as a critical measure of their success. However, the development processes differed significantly depending on whether relatively more emphasis was placed on time or market considerations. Key variables associated with the product concept development decision process and time-to-market dynamics were identified and a theory of the concept development process was developed using the inductive system diagram technique, a research methodology developed in the course of this work.

We believe this work contributes to the operations management literature in three ways. First, it introduces a very detailed, structured decision process for product concept development, enhancing the literature on Quality Function Deployment (QFD). Second, it presents a theory of product concept development that can improve understanding of success and failure in product concept development. Third, this work develops new methodology (Inductive Systems Diagrams) for field work in operations management. This methodology marries the grounded theory methods familiar to sociologists with causal-loop modeling familiar to systems dynamicists, yielding a rigorous tool for systematically collecting, organizing, and distilling large amounts of field-based data.
The Performance Effects of Process Management Techniques
Authors: Ittner Christopher D. , Larcker David F.
Published: November 2008

This paper provides exploratory evidence on the cross-sectional association between process management techniques and two profit measures: return on assets and return on sales. Using a sample of firms in two industries (automotive and computer) and four countries (Canada, Germany, Japan, and the United States), we find that certain process management techniques improve profitability while others have little effect on financial performance. In particular, long-term partnerships with suppliers and customers are associated with higher performance in both industries. The value of other techniques such as statistical process control, process capability studies, and cycle time analysis, on the other hand, appears to vary by industry, reflecting differences in the stages of the two industries' process management practices. Finally, computer organizations following an innovation-oriented strategy earned significantly higher accounting returns regardless of the process management techniques employed, suggesting that these techniques have only a second-order effect on performance in this industry.
The Newsvendor Problem in a Global Market: Optimal Centralized and Decentralized Control Policies for a Two-Market Stochastic Inventory System
Authors: Kouvelis Panagiotis , Gutierrez Genaro J.
Published: November 2008

The global markets of today offer to the “style goods” producer more selling opportunities and pose new challenges in production planning and coordination. From a production management standpoint the opportunity to exploit the difference in timing of the selling season of geographically dispersed markets for “style goods” is important for improving the firm’s profitability. In this paper we examine the above issue with an insightful model of a producer of “style goods” selling the goods to two markets (a primary and a secondary market) with nonoverlapping selling seasons. We refer to this problem as the “global newsvendor” problem. For the above two market stochastic inventory systems we first develop optimal centralized control policies. Then we demonstrate the suboptimality of decentralized production control policies, with the production centers at each market treated as independent profit centers and a constant transfer price being used to coordinate their production. We propose as an effective alternative a decentralized production control structure with a nonlinear pricing scheme for production coordination among centers administered through an intermediate organizational unit. In our modeling, we explicitly consider the effects of exchange rate uncertainty on the production planning decisions.
Dynamic Type Mating
Authors: Duenyas Izak , Keblis Matthew F. , Pollock Stephen M.
Published: November 2008

We address an assembly problem, motivated by flat panel display manufacturing, where the quality (or performance) of the final product depends upon characteristics of the components to be assembled, which are not constant from component to component. We analyze the tradeoff between the increase in the potential value of products gained by putting off the “mating” of components exhibiting various characteristic “types,” and the inventory costs caused by this delay in mating. We formulate this dynamic type mating problem as a Markov Decision Process and characterize the structure of the optimal policy for special cases. We then present a heuristic policy for a more general case and compare its performance against the optimal policy. Computational results indicate that the heuristic is effective for a wide variety of cases.
Measuring Efficiencies and Returns to Scale of Nippon Telegraph & Telephone in Production and Cost Analyses
Authors: Sueyoshi Toshiyuki
Published: November 2008

This article provides a theoretical framework related to Data Envelopment Analysis (DEA) in which an analytical relationship among eight different efficiency concepts is defined and explored in terms of production and cost analyses. This article extends the theoretical basis into the measurement of Scale Economies (SE) and Returns to Scale (RTS). A unique feature of the SE/RTS measurement is that the proposed approach is based upon the measurement regarding not only production activity but also cost performance. As an important case study, this article applies the DEA-based approach to measure the eight efficiency concepts and SE/RTS of Nippon Telegraph & Telephone (NTT). This study finds that NTT has maintained high SE and increasing RTS in the operations of 39 annual periods from 1953 through 1992.
Probabilistic Analysis of a Combined Aggregation and Math Programming Heuristic for a General Class of Vehicle Routing and Scheduling Problems
Authors: Federgruen Awi , van Ryzin Garrett
Published: November 2008

We propose and analyze a heuristic that uses region partitioning and an aggregation scheme for customer attributes (load size, time windows, etc.) to create a finite number of customer types. A math program is solved based on these aggregated customer types to generate a feasible solution to the original problem. The problem class we address is quite general and defined by a number of general consistency properties. Problems in this class include VRPs with general distance norms, capacitated problems, time window VRPs, pick-up and delivery problems, combined inventory control and routing problems and arc routing.

We provide a probabilistic analysis of this heuristic under very general probabilistic assumptions. In particular, we do not require independence between customer locations and their various attributes. The heuristic is (a.s.) ϵ-optimal as the number of customers n tends to infinity. Further, it runs in O(n log n) time for a fixed relative error, and can be designed to be asymptotically optimal while still running in polynomial time. We characterize the asymptotic average value of the heuristic and the optimal solution as the limit of a sequence of linear program values. We also provide bounds on the rate of convergence to the asymptotic value and bounds on tail probabilities. Finally, we discuss numerical issues involved in implementing our heuristic.
Inventory Rationing in a Make-to-Stock Production System with Several Demand Classes and Lost Sales
Authors: Ha Albert Y.
Published: November 2008

This paper considers the stock rationing problem of a single-item, make-to-stock production system with several demand classes and lost sales. For the case of Poisson demands and exponential production times, we show that the optimal policy can be characterized by a sequence of monotone stock rationing levels. For each demand class, there exists a stock rationing level at or below which it is optimal to start rejecting the demand of this class in anticipation of future arrival of higher priority demands. A simple queueing model is analyzed to compute the operating cost of a rationing policy. In a numerical study, we compare the optimal rationing policy with a first-come first-served policy to investigate the benefit of stock rationing under different operating conditions of the system.
A Predictive Model of Sequential Iteration in Engineering Design
Authors: Smith Robert P. , Eppinger Steven D.
Published: November 2008

This paper presents a model describing sequential iteration, one of the fundamental solution processes experienced in complex engineering design projects. The model is based upon the design structure matrix representation and assumes that each individual design activity is of deterministic duration with probabilistic repetition, where the repeat probabilities are defined by the strength of the task coupling. Using the model, we are able to compute the expected duration of the iterative solution process, and to suggest an initial ordering of the coupled design tasks to minimize the expected duration. We conclude the paper with a discussion of limitations and several extensions to the sequential iteration model.
A Batch Means Methodology for Estimation of a Nonlinear Function of a Steady-State Mean
Authors: Muñoz David F. , Glynn Peter W.
Published: November 2008

We study the estimation of steady-state performance measures from an ℜd-valued stochastic process Y = {Y(t): t ≥ 0} representing the output of a simulation. In many applications, we may be interested in the estimation of a steady-state performance measure that cannot be expressed as a steady-state mean r, e.g., the variance of the steady-state distribution, the ratio of steady-state means, and steady-state conditional expectations. These examples are particular cases of a more general problem—the estimation of a (nonlinear) function f(r) of r. We propose a batch-means-based methodology that allows us to use jackknifing to reduce the bias of the point estimator. Asymptotically valid confidence intervals for f(r) are obtained by combining three different point estimators (classical, batch means, and jackknife) with two different variability estimators (classical and jackknife). The performances of the point estimators are discussed by considering asymptotic expansions for their biases and mean squared errors. Our results show that, if the run length is large enough, the jackknife point estimator provides the smallest bias, with no significant increase in the mean squared error.
Creativity Enhancement in Problem Solving: Through Software or Process?
Authors: Marakas George M. , Elam Joyce J.
Published: November 2008

This paper reports the results of a controlled laboratory experiment in which the work of Elam and Mead (Elam, J. J., M. Mead. 1990. Can software influence creativity? Inform. Systems Res. 1(1) 1–23.) was both replicated and extended to explore how knowledge and use of a creativity-enhancing process employed both manually and delivered via computer software affect the level of creativity in response to a problem-solving task. The results suggest the enhancement of creativity in response to open-ended problems is significantly affected by the process employed by the decision maker rather than the vehicle by which the process is delivered. Further, the results indicate that the capability of a decision support system (DSS) to provide directed guidance in the application of a process combined with user knowledge of the underlying process model improves creativity enhancement over use of either the DSS or the process alone.
LEOS—Optimal Satellite Launch Policies: The Static Case
Authors: Gavish Bezalel , Kalvenes Joakim
Published: November 2008

Low earth orbit satellite (LEOS) systems promise to provide global communication. A LEOS system consists of a large number of satellites in low orbits. A satellite has a limited life of approximately five to eight years. Therefore, frequent satellite replenishments are required, and the LEOS systems will be facing annual replenishment costs in the range of several hundred million dollars. This paper considers static satellite launch policies for LEOS systems. The satellite launch problem is formulated and a solution method based on dynamic programming is proposed. Lexicographic ordering is used to reduce the search space of the dynamic program to a moderate size. An algorithm for calculating optimal static policies is used to demonstrate the potentially significant economic impact of satellite launch policies on system maintenance costs.
Opportunities for Improved Statistical Process Control
Authors: Porteus Evan L. , Angelus Alexandar
Published: November 2008

Our Bayesian dynamic programming model builds on existing models to account for inspection delay, choice of keeping production going during inspection and/or restoration, and lot sizing. We focus on describing how dynamic statistical process control (DSPC) rules can improve on traditional, static ones. We explore numerical examples and identify nine opportunities for improvement. Some of these ideas are well known and strongly supported in the literature. Other ideas may be less well understood. Our list includes the following: Cancel some of the inspections called for by an (economically) optimal static rule when starting in control (such as at the beginning of a production run and following a restoration). Inspect more frequently than called for by an optimal static rule once inspections begin, and inspect even more frequently than that when negative evidence is accumulated. Utilize evidence from previous inspections to justify either restoration or another inspection. Cancel inspections and hesitate to restore the process at the end of a production run. Consider using scheduled restoration, in which restoration is carried out regardless of the results of any inspections. Implementation, limitations, and extensions are addressed.
Withdrawal of Team Autonomy During Concurrent Engineering
Authors: Gerwin Donald , Moffat Linda
Published: November 2008

Team autonomy is an essential characteristic of cross-functional teams engaged in concurrent engineering. At the same time it is a characteristic that North American firms have considerable difficulty in successfully implementing. Delegating a good deal of decision making to teams is often counteracted by processes that during a new product program withdraw some of a team's autonomy or discretion. Data from 53 cross-functional product development teams in 14 firms indicated that withdrawing autonomy is negatively correlated with both task and process aspects of team performance. The determinants of withdrawing discretion include lack of a shared understanding of the development process, environmental change, and lack of managerial “buy-in” to team autonomy. Consequently, successful implementation of team autonomy, through mitigating withdrawal of discretion, requires a clear well-communicated model of the development process, a freezing of design revisions, and policies that encourage managers to support the team rather than interfere in its decision making.
Assembly System Design: A Branch and Cut Approach
Authors: Pinnoi Anulark , Wilhelm Wilbert E.
Published: November 2008

This paper addresses the single-product assembly system design problem (ASDP), which seeks to minimize total cost by optimally integrating design (selecting the machine type to locate at each activated station) and operating issues (assigning tasks to observe precedence relationships and cycle time restrictions). We propose an effective branch-and-cut approach for solving single-product ASDPs, adapting inequalities known to be valid for embedded line balancing structures to form inequalities that are valid for the ASDP. The implementation also involves a specialized preprocessor, a heuristic, separation procedures, and an enumeration scheme. Computational tests establish benchmark results for this first implementation of cutting planes for solving the ASDP.
Capacity Expansion and Replacement in Growing Markets with Uncertain Technological Breakthroughs
Authors: Rajagopalan Sampath , Singh Medini R. , Morton Thomas E.
Published: November 2008

The accelerated pace of technological change has led to rapid obsolescence of productive capacity in electronics and other industries. Managers must consider the impact of future technologies while making acquisition and replacement decisions in such environments. We consider a problem where a sequence of technological breakthroughs are anticipated but their magnitude and timing are uncertain. A firm, operating in such an environment, must decide how much capacity of the current technology to acquire to meet future demand growth. It must also determine whether to upgrade any of the older vintages. We formulate this problem and present some structural results. Using these results, we then develop a highly efficient regeneration point-based dynamic programming algorithm. The effectiveness of the proposed algorithm is illustrated through a computational study. The sensitivity of the first period decision to various parameters is also explored.
Repetitive Testing Strategies When the Testing Process Is Imperfect
Authors: Ding Jie , Greenberg Betsy S. , Matsuo Hirofumi
Published: November 2008

This paper considers the problem of test design and implementation when testing is imperfect. Items that are classified as conforming may be nonconforming, resulting in a poor outgoing quality level. Items that are classified as nonconforming may be conforming, resulting in excessive scrapping of conforming items. The failed items are commonly retested to reduce the scrapping problem. Alternatively, the accepted items may be retested to improve outgoing quality. In this paper, we examine the question of whether it is better to repetitively test rejected items, or to repetitively test accepted items. We also examine the relationship between the two testing policies, testing equipment accuracy and capacity, incoming quality, and outgoing quality requirements.
Lot-Sizing with Start-Up Times
Authors: Vanderbeck François
Published: November 2008

Many practical applications of lot-sizing and scheduling problems involve start-up times. Operations research literature contains but few studies of lot-sizing models that take start-up times explicitly into account. Here, we review some of these studies, discuss the models and their complexity, and we propose further models. We consider in particular a single-stage single-mode multi-item lot-sizing model with continuous set-ups and sequence independent start-up times, which we solve using an integer programming column generation algorithm and we develop a dynamic programming procedure for the single-item subproblem that treats the initial stock as a decision variable. We also use cutting planes developed by Constantino for the multi-item polyhedra. By combining column and cut generation, the lower bounds that we obtain before branching are on average less than 2% from an optimal solution. Our algorithm solves instances with 3 to 5 items and 24 periods in an average of 50 seconds on a modern workstation, and problems with 36 periods in an average of 750 seconds. Solutions guaranteed to be within 2% of optimality are obtained in less than 75% of these times.
Note. Satisfying Due Dates in Large Job Shops
Authors: Hodgson Thom J. , Cormier Denis , Weintraub Alexander J. , Zozom Andrew
Published: November 2008

For the multi-machine job shop scheduling problem, a conceptually simple simulation-based procedure (first proposed by Lawrence and Morton 1986) is shown to be both effective and efficient in providing optimal, or near optimal, schedules for minimizing the maximum lateness, Lmax. Computational experimentation is used to identify the conditions under which the approach is most viable.
Cross-Disciplinary Evidence for Hyperbolic Social Discount Rates
Authors: Henderson Norman , Langford Ian
Published: November 2008

Researchers in different disciplines have independently found evidence to suggest that the social discount rate may be hyperbolic, rather than exponential, in nature. Both behaviorist research and some empirical economics studies support the hyperbolic discounting hypothesis. U.S. and U.K. government discounting dispensations for some long-run public development projects are explicable in terms of an underlying hyperbolic social discount rate. A statistical aggregation argument demonstrates that even if the behaviorist, economics and public choice evidence for hyperbolic discounting is not conclusive, the social discount rate of a set of people who individually express time preferences best modeled by exponential discounting functions is nonetheless hyperbolic.

Further empirical economics studies of discounting preferences are required. Comparisons of different national discounting practices would also be useful to see how widespread is the use of unusually low exponential rates of discount for long-run projects. The application of hyperbolic discounting would have most impact in long-run benefit-cost analyses. However, government agencies would require overwhelming evidence before switching from exponential to hyperbolic discounting.
Probabilistic Analyses and Algorithms for Three-Level Distribution Systems
Authors: Chan Lap Mui Ann , Simchi-Levi David
Published: November 2008

We consider the problem of integrating inventory control and vehicle routing into a cost-effective strategy for a distribution system consisting of a single outside vendor, a fixed number of warehouses and many geographically dispersed retailers. Each retailer faces a constant, retailer specific, demand rate and inventory holding cost is charged at the retailers and the warehouses. We show that, in an effective strategy which minimizes the asymptotic long run average cost, each warehouse receives fully loaded trucks from the vendor but never holds inventory. That is, each warehouse serves only as a coordinator of the frequency, time and sizes of deliveries to the retailers. This insight is used to construct an inventory control policy and vehicle routing strategy for multi-echelon distribution systems. Computational results are also reported.
Stochastic Shortest Path Problems with Piecewise-Linear Concave Utility Functions
Authors: Murthy Ishwar , Sarkar Sumit
Published: November 2008

This paper considers a stochastic shortest path problem where the arc lengths are independent random variables following a normal distribution. In this problem, the optimal path is one that maximizes the expected utility, with the utility function being piecewise-linear and concave. Such a utility function can be used to approximate nonlinear utility functions that capture risk averse behaviour for a wide class of problems. The principal contribution of this paper is the development of exact algorithms to solve large problem instances. Two algorithms are developed and incorporated in labelling procedures. Computational testing is done to evaluate the performance of the algorithms. Overall, both algorithms are very effective in solving large problems quickly. The relative performance of the two algorithms is found to depend on the “curvature” of the piecewise linear utility function.
Note. An Acquisition Policy for a Single Item Multi-Supplier System
Authors: Rosenblatt Meir J. , Herer Yale T. , Hefter Ilan
Published: November 2008

In this paper we consider the problem of developing an acquisition policy. Specifically, given a set of potential (qualified) suppliers, from whom should the firm buy the product, in what quantities, and how often? We provide properties of the optimal solution and relate them to the approach of using a single source as advocated by JIT. The solution procedure provides the periodic order quantity from each supplier; the order size; and the firm cycle time as well as how many times per cycle we should order from each supplier. We show that the maximum error of our solution can be made as small as desired.
Modeling and Worker Motivation in JIT Production Systems
Authors: Schultz Kenneth L. , Juran David C. , Boudreau John W. , McClain John O. , Thomas L. Joseph
Published: November 2008

This paper concerns the modeling of low inventory lines. Currently, most models assume that processing times are independent. We consider the differences in behavior of workers in low- and high-inventory production lines. Using a laboratory experiment we show that workers speed up when they are the cause of idle time on the line. This means that processing time distributions are not independent of the size of the buffer, of the processing speed of co-workers, or of the amount of inventory in the system. We show that the direction of these effects is predictable and that the magnitude is significant. In particular, there is less idle time and higher output than would be predicted using assumptions of independence. In this experiment the effect completely canceled productivity loss due to blocking and starving. This work is important in understanding both the motivation of workers in low-inventory systems and the implications of models of manufacturing flow lines.
Limit Theory for Performance Modeling of Future Event Set Algorithms
Authors: Damerdji Halim , Glynn Peter W.
Published: November 2008

In a discrete-event simulation, the information related to the events scheduled to occur in the future is kept in a data structure called the future event set (FES). In this paper, we study the interaction hold model, a popular stochastic model for FES performance analysis, corresponding to the superposition of a (fixed) number of renewal processes. The general state-space Markov chain formed by the discrete-time process that keeps track, at event times, of the residual lifetimes is shown here to be recurrent in the sense of Harris, and its stationary distribution is obtained. Linked lists and indexed lists, two popular FESs, are investigated using this model. For the interaction hold model, we make rigorous certain published results as well as introduce new ones. For example, we derive the distribution of the relative position of the event to be inserted in the data structure. In the exponential case, our analytic and empirical results confirm that when events with relatively short lifetimes often get regenerated upon their occurrence, it is better to scan a list (or sublist) from its head rather than tail. In the same context and for indexed lists with sublists with constant sizes, our results suggest that subsequent sublists should be of larger sizes, i.e., the first sublist should contain the smallest number of records, the second sublist the second smallest number of records, etc.
Strategies for Survival in Fast-Changing Industries
Authors: Christensen Clayton M. , Suárez Fernando F. , Utterback James M.
Published: November 2008

Technology strategy variables tend to predominate as predictors of survival in the fast-changing rigid disk drive industry. Building on these previous studies, we here test the hypothesis that the technological and market strategies of a new entrant are highly interrelated and that their joint effect plays an important role in a firm's probability of survival. In particular, we propose that firms that target new market segments with an architectural innovation will tend to be more successful than those that target existing markets or innovate in component technology, even after controlling for all the competing predictors of survival.

This paper advances the existing literature on innovation by tracing the main technical elements of a dominant design in the rigid disk drive industry over time, and provides a much more rigorous definition of the concept of a dominant design than we have had in the past. We find the notion of first-mover advantage is not applicable in the rigid disk drive industry. Instead, we propose the idea of an entry-window tightly linked to the emergence of the dominant product design as defined.