bluuebunny/crossref_metadata_2025 huggingface dataset:
Capital Equipment Analysis: The Required Rate of Profit
Authors: Gordon Myron J. , Shapiro Eli
Published: November 2008

The interest in capital equipment analysis that has been evident in the business literature of the past five years is the product of numerous social, economic, and business developments of the postwar period. No conclusive listing of these developments can be attempted here. However, four should be mentioned which are of particular importance in this search for a more systematic method for discovering, evaluating, and selecting investment opportunities. These are: (1) the high level of capital outlays (in absolute terms); (2) the growth in the size of business firms; (3) the delegation of responsibility for initiating recommendations from top management to the profit center, which has been part of the general movement toward decentralization; and (4) the growing use of “scientific management” in the operations of the business firm.
The Allocation of Aircraft to Routes—An Example of Linear Programming Under Uncertain Demand
Authors: Ferguson Allen R. , Dantzig George B.
Published: November 2008

The purpose of this paper is to illustrate an application of linear programming to the problem of allocation of aircraft to routes in order to maximize expected profits when there is uncertain customer demand. The approach is intuitive; the theoretical basis of this work is found in an earlier study. The allocations are compared with those obtained under the usual procedure of assuming a fixed demand equal to the expected value. The computational procedure is similar to the fixed demand case, with only slightly more computational effort required.

This paper is intended both for readers interested in routing (and analogous resource allocation) problems and for those interested in studying an example of an application of linear programming under uncertainty.
A Model for the Optimal Programming of Railway Freight Train Movements
Authors: Charnes A. , Miller M. H.
Published: November 2008

The area of railroad scheduling and associated problems offers a potentially fruitful field for research in management science. The mass of data; the need for considering numerous aspects of the problem simultaneously; and the variety of restrictions (arising from the technology, labor agreements and government regulation) make the control of day to day operations a management problem of great complexity. The problems at this level are further compounded by the need for developing, at the same time, methods for planning and evaluating major changes in facilities. Such methods, if they are to be effective, must be capable of tracing out the implications of these changes on the day to day operation and appraising the results in the light of the long-run objectives of the railroad. This paper is an account of an attempt to apply certain techniques of management science to some of these scheduling problems as they were found to exist on a large terminal switching railroad.
The Institute of Management Sciences: Progress Report
Authors: Symonds Gifford H.
Published: November 2008

The Institute of Management Sciences (TIMS) was formally organized on December 1, 1953. Sixty-three charter members adopted the constitution and by-laws of the society and confirmed the objectives of the Institute: “To identify, extend, and unify scientific knowledge that contributes to the understanding and practice of management.” Of the charter members, approximately one-third are academic people and about two-thirds represent industry and business. All were united in their belief in scientific foundation for the field of management.
Mathematical Programming and Service Scheduling
Authors: Karush W. , Vazsonyi A.
Published: November 2008

There are many business situations where it might be necessary to keep the potential service level (preparedness) above requirements at least in some of the time intervals. For instance, a fleet of trucks (or cabs) or group of production machines, cannot be easily adjusted month by month and, therefore, during slack periods the potential service level may exceed requirements. In a manufacturing firm, there are certain functions to be performed, such as maintenance or clerical work (often overhead type functions), where again the potential service level is expensive to change. In fact, even in the case of production workers, the expense of hiring, training, firing, or the contractual obligations of guaranteed wage agreements may make it undesirable to change the level of employment during slack periods. The reader will readily find further illustrations of the type of planning problems we are describing here.
Air Force Progress in Logistics Planning
Authors: Jacobs Walter
Published: November 2008

This is a progress report on the Air Force use of scientific procedures in programming and planning. The use of scientific methods, in the development of Air Force programs and plans and in the determination of the logistic support required, has occurred primarily in association with the use of large-scale electronic data processing systems. Therefore, in discussing progress I will be dealing for the most part with work done in connection with such systems.
Intertemporal Allocation of Capital Costs in Electric Utility Capacity Expansion Planning Under Uncertainty
Authors: Sherali H. D. , Soyster A. L. , Murphy F. H. , Sen S.
Published: November 2008

This paper concerns marginal cost pricing in a capacity expansion problem for the electric utility industry. We develop a characterization of equipment selection and marginal capital cost allocation based on an optimal capacity plan, in the context of either a finite, discretely distributed stochastic demand forecast, or in the deterministic case of multiple users identified by temporal considerations. In either case, a two stage linear program with recourse is shown to result. The main purpose of this paper is to conduct an analysis in order to determine a marginal cost pricing strategy for sharing capital costs given an optimal capacity plan, and to provide insightful economic interpretations. Our results also generalize a special case previously studied to demonstrate how a marginal cost pricing strategy may result in some of the capacity costs being borne by off-peak users.
Thresholds and Transitivity in Stochastic Consumer Choice: A Multinomial Logit Analysis
Authors: Lioukas S. K.
Published: November 2008

In previous work, thresholds have been introduced to describe situations where the consumer is indifferent between any two alternatives. Krishnan (Krishnan, K. S. 1977. Incorporating thresholds of indifference in probabilistic choice models. Management Sci. 23 (July) 1224–1233.) formalised thresholds as minimum perceivable differences between the utilities of the alternatives compared and incorporated such thresholds into the binary logit model.

The present paper provides an extension and application of the theory to situations where the decision maker is confronted with more than two alternatives. In such situations thresholds can lead to systematic and predictable intransitivity of indifference, violating a basic postulate of utility theory. Explicit probabilities of transitive and intransitive choices are derived within the framework of the multinomial logit model and the stochastic consumer theory associated with this model.

The empirical applicability and managerial usefulness of the proposed theory is illustrated using a transportation example with three alternatives. The data employed reflect actual travellers' use of interurban transport modes in Greece. Parameters are estimated by a maximum-likelihood technique, based on a gradient search method. The results support the existence of thresholds. The application has important policy implications.
The Profitability of Wagering on NFL Games
Authors: Tryfos P. , Casey S. , Cook S. , Leger G. , Pylypiak B.
Published: November 2008

A reappraisal of previously suggested strategies for betting on football games using results of the period 1975–1981 casts considerable doubt on the profitability of relying on the past history of games for guidance in placing bets.
Partitioning Variance in Regression Analyses for Developing Policy Impact Models: The Case of the Federal Medicaid Program
Authors: Chen Milton M.
Published: November 2008

This paper extends the usual regression analysis to include the partition of the variance to examine the possible secondary and higher order impact of policy variables in a policy impact model. The federal Medicaid program is analyzed using the methodology to assess the impact of the policy variable—differential federal matching ratio—on the per capita expenditure from state and local sources. Our result shows that the policy is ineffectual on its own but modestly effective with others when all important factors are considered simultaneously.
An Integer Programming Algorithm with Network Cuts for Solving the Assembly Line Balancing Problem
Authors: Talbot F. Brian , Patterson James H.
Published: November 2008

In this paper, we describe an integer programming algorithm for assigning tasks on an assembly line to work stations in such a way that the number of work stations is minimal for the rate of production desired. The procedure insures that no task is assigned to a work station before all tasks which technologically must be performed before it have been assigned (precedence restrictions are not violated), and that the total time required at each work station performing the tasks assigned to it does not exceed the time available (cycle time restrictions are not violated). The procedure is based on a systematic evaluation (enumeration) of all possible task assignments to work stations. Significant portions of the enumeration process are performed implicitly, however, by utilizing tests described in the paper which are based on the specific structure of the line balancing problem. An artifice termed a network cut is also developed which eliminates from explicit consideration the assignment of tasks to work stations where such assignments would not lead to improved line balances. Results reported demonstrate that the procedure can obtain optimal balances for assembly lines with between 50 and 100 tasks in a reasonable amount of computation time and with modest computer storage requirements.
Monitoring an Input-Output Model for Production. I. The Control Charts
Authors: Jensen D. R. , Hui Y. V. , Ghare P. M.
Published: November 2008

Control charts are given for monitoring an input-output model against changes in form, against changes in its coefficients, and against changes in process variance. When a process is not in control due to changes in some coefficients, monitoring shifts to a diagnostic mode to identify the altered coefficients and thus the needed adjustments to the process. Control limits from special aid tables are used; these are considered along with the choice of design. Operating characteristics of the charts are summarized under standard assumptions.
An Overview of Techniques for Solving Multiobjective Mathematical Programs
Authors: Evans Gerald W.
Published: November 2008

Multiobjective mathematical programming has been one of the fastest growing areas of OR/MS during the last 15 years. This paper presents: some reasons for the rapidly growing increase in interest in multiobjective mathematical programming, a discussion of the advantages and disadvantages of the three general approaches (articulation of the decision maker's preference structure over the multiple objectives prior to, during, or after the optimization) towards multiobjective mathematical programming, a nontechnical overview of many of the specific solution techniques for multiobjective mathematical programming, and a discussion of important areas for further research.

The overview concentrates on those techniques which require an articulation of the decision maker's preference structure either during or after the optimization, since these are the areas where most of the recent research has been conducted. It differs from previous overviews in that, in addition to the timing of the elicited preference information, the techniques are also classified according to the types of decision variables contained in the model (i.e., only continuous decision variables, or at least some discrete decision variables). In addition, the types of preference information (e.g., a ranking of outcomes) required of the various techniques are also discussed.
An Empirical Investigation of Success Strategies for Businesses Along the Product Life Cycle
Authors: Thietart R. A. , Vivas R.
Published: November 2008

Since the introduction of the concept of the product life cycle (PLC) some decades ago a great deal has been written on the subject and several empirical studies have been conducted. However, empirical research to date is often limited in scope. It is oriented towards the analysis of the growth and saturation stages and focused primarily on the study of consumer goods. Furthermore, the application of the PLC concept in strategic planning is largely disappointing, the normative orientation of most of this literature being somewhat naive and misleading.

The aim of the present research is to study the efficiency of different strategies for achieving market share and cash flow objectives. This study is performed on different types of businesses producing both consumer and industrial products situated at various stages on the product life cycle: growth, maturity and decline.

A sample of approximately 1,100 businesses (217 in the growth stage, 315 in the maturity stage, 569 in the decline stage) is drawn from the PIMS data base. A cluster analysis is run to identify natural groups of homogeneous businesses. For each of the nine identified groups, linear regression models are estimated to study the influence of strategic actions—finance, marketings, production, R&D, personnel—on two criteria of performance: market share and cash flow.

The research indicates that strategies not only depend on the life cycle stage but also are influenced by the goal orientation of the firm—short-term (cash-flow) or long-term (market share)—and that success strategies appear to be contingent upon the business and the environmental characteristics.
Application of Mathematical Programming to the Plywood Design and Manufacturing Problem
Authors: Atkins Derek R. , Granot Daniel , Raghavendra B. G.
Published: November 2008

Plywood manufacture includes two fundamental stages. The first is to peel or separate logs into veneer sheets of different thicknesses. The second is to assemble veneer sheets into finished plywood products. At the first stage a decision must be made as to the number of different veneer thicknesses to be peeled and what these thicknesses should be. At the second stage, choices must be made as to how these veneers will be assembled into final products to meet certain constraints while minimizing wood loss. These decisions present a fundamental management dilemma. Costs of peeling, drying, storage, handling, etc. can be reduced by decreasing the number of veneer thicknesses peeled. However, a reduced set of thickness options may make it infeasible to produce the variety of products demanded by the market or increase wood loss by requiring less efficient selection of thicknesses for assembly. In this paper the joint problem of veneer choice and plywood construction is formulated as a nonlinear integer programming problem. A relatively simple optimal solution procedure is developed that exploits special problem structure. This procedure is examined on data from a British Columbia plywood mill. Restricted to the existing set of veneer thicknesses and plywood designs used by that mill, the procedure generated a solution that reduced wood loss by 79 percent, thereby increasing net revenue by 6.86 percent. Additional experiments were performed that examined the consequences of changing the number of veneer thicknesses used. Extensions are discussed that permit the consideration of more than one wood species.
Experimental Evaluation of Variance Reduction Techniques for Queueing Simulation Using Generalized Concomitant Variables
Authors: Wilson J. R. , Pritsker A. A. B.
Published: November 2008

In a companion paper we developed a unified scheme for using poststratified sampling and control variables to improve the efficiency of regenerative queueing simulations. We adapted these variance reduction techniques to the estimation methods of replication analysis and regenerative analysis by exploiting the asymptotic joint normality of certain standardized concomitant variables that are defined on each input process sampled during a queueing simulation. In this paper we present an experimental evaluation of the reductions in point-estimator variance and confidence-interval width that can be achieved with each procedure in several closed and mixed machine-repair systems. For the analytically tractable model, nominal and actual confidence-interval coverage probabilities are also compared. Poststratification generally produced variance reductions ranging from 10% to 40% and confidence-interval reductions between 1% and 20%. The control-variates schemes yielded variance reductions ranging from 20% to 90% and confidence-interval reductions between 10% and 70%. In some instances where small sample sizes were used, the poststratification schemes produced confidence-interval width increases between 1% and 10%. With a small number of regenerative cycles, some loss of confidence-interval coverage was observed with both post-stratified and controlled regenerative analysis. When larger sample sizes were used, all of the estimation schemes yielded fairly consistent efficiency gains.
School Timetabling—A Case in Large Binary Integer Linear Programming
Authors: Tripathy Arabinda
Published: November 2008

A timetabling problem is formulated as a large integer linear programming problem in 0-1 variables. A solution method based on Lagrangean relaxation coupled with subgradient optimization is presented. The solution method also incorporates a branch and bound procedure which takes advantage of special ordered sets of variables. We present computational results for a large timetabling problem involving 900 subjects in a one-year graduate program.
Solving Generalized Networks
Authors: Brown Gerald G. , McBride Richard D.
Published: November 2008

A complete, unified description is given of the design, implementation and use of a family of very fast and efficient large-scale minimum-cost (primal simplex) network programs. The class of capacitated generalized transshipment problems solved includes the capacitated and uncapacitated generalized transportation problems and the continuous generalized assignment problem, as well as the pure network flow models which are specializations of these problems. These formulations are used for a large number of diverse applications to determine how (or at what rate) flows through the arcs of a network can minimize total shipment costs. A generalized network problem can also be viewed as a linear program with at most two nonzero entries in each column of the constraint matrix; this property is exploited in the mathematical presentation with special emphasis on data structures for basis representation, basis manipulation, and pricing mechanisms. A literature review accompanies computational testing of promising ideas, and extensive experimentation is reported which has produced GENNET, an extremely efficient family of generalized network systems.
The Effect of Presentation Form on the Use of Information in Annual Reports
Authors: Bell Jan
Published: November 2008

Information for management decisions is typically presented in both numeric and nonnumeric forms. This paper tests whether the choice of presentation form affects the use of such information by decision makers. Selected information from corporate annual reports was provided to a group of practicing financial analysts in a quasi-experimental setting. The analysts were asked to evaluate two companies (one R&D company and one manufacturing company) using selected financial data and excerpts from the president’s letter. Some versions of the letter contained numeric information while other versions contained nonnumeric information. The study tested several hypotheses which specified the conditions under which information in one presentation form would receive higher weight in a decision than the other form. Relative weights placed on different information forms were determined by an averaging model from information integration theory. The appendix contains a presentation of that model. The study’s results suggest that when the link between organizational actions and future performance is not well established and understood, financial analysts may give more weight to nonnumeric information in evaluating a company. This study has important implications because it shows that in certain situations managers can influence financial analysts’ use of information by varying presentation form.
Factor Screening in Simulation: Evaluation of Two Strategies Based on Random Balance Sampling
Authors: Mauro Carl A. , Smith Dennis E.
Published: November 2008

In the study of large, complex computer simulation models the user is often overwhelmed by the vast number of input variables. Moreover, he or she is usually confused about how to make an effective analysis of the model without performing an excessive number of runs, which tend to be costly and time consuming. Factor screening methods, which attempt to identify the more important variables, can be extremely useful in the study of such models. This paper presents and evaluates two screening strategies based upon random balance sampling. Both strategies are applicable when there are more variables to be screened than there are available screening runs. The results provide guidance in using these strategies in particular screening applications.
Reply to Professors Charnes and Cooper Concerning Their Response to “Decision Problems Under Risk and Chance Constrained Programming”
Authors: Hogan Andrew J. , Morris James G. , Thompson Howard E.
Published: November 2008

We show in this reply that the response by Charnes and Cooper to our paper is aimed at an issue that is only tangential to our analysis and does not affect our conclusions.
Effects of Planning Aids and Presentation Media on Performance and Affective Responses in Strategic Decision-Making
Authors: Schwenk Charles R.
Published: November 2008

The Dialectical Inquiry System (DIS) and the Devil's Advocate (DA) have been recommended as strategic decision-making aids and as improvements on the traditional expert (E) approach in which strategic decisions are based on preliminary analyses and proposals by staff experts. Previous research on the effects of the DIS and DA has produced conflicting results. In the present study, subjects produced alternative strategies and recommendations for a company described in a case. They were given the E, DA, or DIS treatment either in written form or via videotape. In addition, some were assigned to a control (C) group and received no planning assistance. The results showed that the written DA, the videotape DI, and the videotape E treatment caused subjects to generate fewer functional area alternatives than the C subjects. Further, the subjects receiving the written DA generated more strategic alternatives than those receiving the written DIS or E. The DA also reduced the effects of an “expert report” on subjects' final recommendations while the DIS did not. Subjects given the DA and DIS reported greater satisfaction with the process than those given the E.
A Goal Programming Example in Public Health Resource Allocation
Authors: Tingley Kim M. , Liebman Judith S.
Published: November 2008

A model developed to aid a state-level resource allocation process in the United States Department of Agriculture Special Supplement Food Program for Women, Infants, and Children (WIC) is presented. The model is formulated as a linear integer goal program, utilizing service levels for six categories of WIC participants as goals. The model employs a methodical, consistent approach to the allocation process, yet allows ample flexibility for consideration of state-specific issues. By allowing the user to adjust the relative importance of each goal, the model can incorporate subjective attitudes of state-level WIC administrators. This is extremely important as these attitudes are the result of the administrators' familiarity with the WIC program in their states, and the significance of input of this nature should not be neglected.

An application of the model to the Indiana WIC program is presented. Sensitivity of the model to changes in the objective function weights and in the target values for the goals is explored. Although orginally developed to allocate budget increases, the model may be used in allocating budget cuts as well; this form of the model is also presented. The model can be extended hierarchically to incorporate resource allocation at the federal level. This modeling approach should be useful in all public sector programs characterized by multiple objective and hierarchical decisionmaking.
Age Replacement Under Alternative Cost Criteria
Authors: Ansell J. , Bendell A. , Humble S.
Published: November 2008

Due to the complexity of optimum replacement problems over finite lime horizons various asymptotic criteria based upon fixed age replacement policies have been employed in the literature and in practice. In this paper the relationships between the optimum policies under three alternative cost criteria are considered. An ordering of the accounting costs under two of these is obtained, and for distributions with Increasing Hazard Rate an ordering of the optimum replacement time is derived. For a finite time horizon the policies are compared to the optimal sequential and fixed-age replacement polices through the example of a gamma distribution previously investigated by Barlow and Proschan (Barlow, R. E., F. Proschan. 1962. Planned replacement. K. J. Arrow, S. Karlin, W. L. Smith, eds. Studies in Applied Probability and Management Science. Stanford University Press, Stanford, Cal.; Barlow, R. E., F. Proschan. 1965. Mathematical Theory of Reliability. Wiley, New York.).
Foundations of Risk Measurement. I. Risk As Probable Loss
Authors: Fishburn Peter C.
Published: November 2008

This paper seeks to get behind specific contextual referents of risky situations to consider characteristics of risk that apply to many situations. It is guided by previous theoretical and empirical research in perceived risk, and focuses on the joint effects on risk of loss probability and the distribution of losses. The approach taken follows modern axiomatic theory by proposing conditions on a relation “is at least as risky as” between pairs of probability distributions over an outcome variable. Several sets of axioms for risk that characterize different forms for risk measurement are presented.
On Fates Comparable to Death
Authors: Howard Ronald A.
Published: November 2008

Earlier models for the evaluation of assuming and shedding risks of death are extended to the case of possibly extreme disability over a lifetime. Earlier micromort values are supplemented with microdisability values to enable individuals to make consistent decisions in hazardous situations.
Survival versus Consumption
Authors: Shepard Donald S. , Zeckhauser Richard J.
Published: November 2008

We develop an indirect method to estimate utility and willingness to pay (WTP) for reductions in the risk of death at various ages. Using a life-cycle model of consumption, we assume that an individual sets his consumption level each year so as to maximize his expected lifetime utility. Alternative assumptions about opportunities for borrowing and annuities characterize two polar types of societies. In our Robinson Crusoe case, an individual must be entirely self-sufficient, and annuities are not available. In our perfect markets case, an individual can borrow against future earnings and purchase actuarially fair annuities; we show that under these assumptions WTP is the sum of livelihood (discounted expected future earnings) and consumer surplus.

To illustrate our methods, we derive WTP for an average financially independent American man under plausible assumptions. The model is calibrated to 1978 earnings (e.g., $18,000 per year for men aged 45–54 with at least some income). In the Robinson Crusoe case, WTP increases from $500,000 at age 20 to a peak of $1,250,000 at age 40, and declines to $630,000 at age 60. In the perfect markets case, age variations are less pronounced; WTP is $1,050,000 at age 20, peaks at $1,070,000 at age 25, and declines to $600,000 at age 60. These results suggest that individuals value risks to their lives at several times the pro-rata share of their future earnings.
Modeling the Societal Impact of Fatal Accidents
Authors: Slovic Paul , Lichtenstein Sarah , Fischhoff Baruch
Published: November 2008

A number of proposals have been put forth regarding the proper way to model the societal impact of fatal accidents. Most of these proposals are based on some form of utility function asserting that the social cost (or disutility) of N lives lost in a single accident is a function of Nα. A common view is that a single large accident is more serious than many small accidents producing the same number of fatalities, hence α > 1. Drawing upon a number of empirical studies, we argue that there is insufficient justification for using any function of N fatalities to model societal impacts. The inadequacy of such models is attributed, in part, to the fact that accidents are signals of future trouble. The societal impact of an accident is determined to an important degree by what it signifies or portends. An accident that causes little direct harm may have immense consequences if it increases the judged probability and seriousness of future accidents. We propose that models based solely on functions of N be abandoned in favor of models that elaborate in detail the significant events and consequences likely to result from an accident.
A Decision-Process Perspective on Risk and Policy Analysis
Authors: Kunreuther Howard , Linnerooth Joanne , Vaupel James W.
Published: November 2008

Risk analysis and policy analysis can play important roles in facilitating the siting of potentially hazardous facilities if one recognizes the descriptive features of the decision process. The case of siting a liquified natural gas (LNG) facility in California illustrates the multi-party sequential nature of the process and the role that widely differing risk estimates play in fueling conflicts between stakeholders. Risk analysis does have a useful function in clarifying the nature of the potential losses, particularly if rules of evidence are instituted for evaluating different studies. Policy analysis can facilitate the negotiation process by the use of compensation to redistribute gains and losses between the different parties. Examples from case studies are presented to illustrate the challenges for risk analysis and policy analysis in the siting process.
An Empirical Investigation of the Impact of Graphical and Tabular Data Presentations on Decision Making
Authors: Remus William
Published: November 2008

A key issue in designing a computer-based decision support system is how best to depict the data. Since most systems use either graphical or tabular displays, this experiment compares the latter two when used as decision aids for the production scheduling problem modeled by Holt, Modigliani, Muth, and Simon. The tabular aids and the graphical aids yield equally costly decisions. When the erratic components of the decisions are reduced, the tabular aids outperform the graphical aids.
A Comparative Evaluation of Multiattribute Consumer Preference Models
Authors: Currim Imran S. , Sarin Rakesh K.
Published: November 2008

In this paper the theory and estimation procedures for several consumer preference models are discussed. Predictive accuracy in the form of internal consistency of these models is compared in an empirical application.

Consumer decision situations are classified into two classes: decisions under certainty and decisions under uncertainty. For each of the two classes of decision situations two modeling strategies have been used: statistical estimation and algebraic solution. An additive conjoint, an additive and a multiplicative measurable value, and an additive and a multiplicative utility model are considered.

Our main finding is that the statistical estimation procedures outperform their algebraic counterparts on the criterion of predictive accuracy. The utility model provides better predictions for decisions under uncertainty than the widely used conjoint models.

The relationship between models for decisions under certainty and decisions under uncertainty is discussed. It is shown how a conjoint or a measurable value function model can be transformed into a utility model with minimum additional information from the subjects. A concept of relative risk attitude is proposed to segment consumers by the degree of their risk aversion or risk seeking propensities.
A Budget Holdback Policy for Multi-Item Procurement Processes
Authors: Morey Richard C. , Sweeney Dennis J.
Published: November 2008

This paper is concerned with the development of an optimal budget holdback policy for a multi-item procurement process. An annual budget is made available for the purchase and resupply of n items. The issue is to determine how much of the budget to commit initially and how much to hold back for spot purchases later in the year. An analytic solution to the problem is developed for the single item case and compared to the unconstrained “newsboy” solution.

In the multi-item case we develop stochastic linear programming with resource models under two views of the organization's procurement process. The first view is that the overall budget is allocated to the individual item managers and spot purchase monies earmarked for one item cannot be used for another. The computational and data requirements for solution of this model are reasonable. The second view is that spot buy monies are pooled and allocated to individual items on an “as needed” basis. The linear programming model of this procurement process is much more complex and not computationally feasible for more than a few items. However, the budget allocation model of the first view is shown to be a good heuristic for determining the percent of funds to hold back for the pooled process. A numerical example and sensitivity analysis are included.
Approximations for Superposition Arrival Processes in Queues
Authors: Newell G. F.
Published: November 2008

S. L. Albin has described extensive simulations of queue behavior for a system with a single server and an arrival process that is a superposition of n renewal processes. The simulations show, among other things, that as n increases for a fixed traffic intensity ρ, the queue behavior approaches that of the M/M/1 system. The rate of convergence, however, becomes much slower as the traffic intensity ρ comes closer to 1. Several qualitative effects shown in the simulations are explained here. In particular it is shown that the approach to the M/M/1 system requires that n(1 − ρ)2 ≫ 1.
A Note on the Room-Mates Problem and a Related Revenue Allocation Problem
Authors: Granot Daniel
Published: November 2008

We introduce in this note the consistent organizational structure (COS) problem, which can be viewed as a generalization of the college admission and room-mates problems. Both the room-mates problem and the COS problem may have no stable solution. When side payments are allowed, the COS problem, but not the room-mates problem, always has a nonempty core. We further study some nucleoli of the COS problem with side payments.
A Comparison of the Multiple Dispatch and M/M/c Priority Queueing Models of Police Patrol
Authors: Green Linda , Kolesar Peter
Published: November 2008

In many cities, a substantial fraction of calls for police service require more than one patrol car. We compare Green's multiple dispatch queueing model to several M/M/c-based approximations for multiple car dispatching that are obtained by adjusting the parameters. We found that none of the approximate models yields consistently reliable results under a broad range of conditions. The best approximations are produced by reducing the actual number of servers. Increasing the call rate gives the worst results.
Sense-Making of Accounting Data as a Technique of Organizational Diagnosis
Authors: Boland Richard J.
Published: November 2008

Planning is a process of inquiry. Inquiry can be enhanced if different views-of-the-world are used to inform each other. In an exploratory field study, a sense-making exercise was used in the initial, goal definition stage of planning. Its use is antithetical because sense-making denies that management action is based on preconceived goals or objectives. Instead, sense-making assumes management action is a continuous, equivocal stream of experience that can only be understood (or made sense of) when it is viewed in retrospect.

Accounting reports were prepared to describe a fictitious, but plausible future scenario for an organization. A number of alternative future directions that the organization could have followed—different kinds of organization it could have become—were used as a basis for creating the accounting reports. The management group then imagined themselves even further out into the future, looking back over the accounting data. They tried to understand what they had done during this period, why they had done it, and how they felt about having done it.

The impact of this exercise on the managers' cognitive and emotional experience and their commitment to use the method in other decisions suggest that sense-making can enhance the group process of inquiry during the initial stages of planning.
Scheduling Jobs with Exponentially Distributed Processing Times on Two Machines with Resource Constraints
Authors: Pinedo Michael , Weiss Gideon
Published: November 2008

We consider the problem of minimizing the expected makespan of n jobs with independent exponentially distributed processing times on two parallel machines, under resource constraints. Job j has expected processing time 1/μj and requires throughout its processing an amount rj of a resource; the total amount of resource available is r. In the case where 1/μ1 < ⋯ < 1/μn and r1 < ⋯ < rn, we characterize all the optimal policies in the class of preemptive schedules, and show that the following nonpreemptive policy is optimal: Find the largest k for which rk + rk−1 < r, and start processing jobs k − 1, k. Thereafter, at any job completion, start processing on the machine that is freed, the longest job compatible with the job running on the other machine.
Economic Models for R and D Project Selection in the Presence of Project Interactions
Authors: Fox G. Edward , Baker Norman R. , Bryant John L.
Published: November 2008

One reason existing approaches for dealing with benefit interactions in economic R and D project selection models are difficult to apply is that it is difficult to assess the interactions directly. This difficulty can be traced at least in part to the lack of a modeling framework within which different types of interaction can be identified and related to project and portfolio benefit. In this paper, a modeling framework is proposed within which certain kinds of benefit interactions, called present value (PV) interactions, are assessed indirectly by explicitly modeling R and D project impacts on profitability. Within the proposed framework, the role of traditionally recognized types of interaction in the calculation of present value is clarified, and it is shown that PV interaction exists even when traditionally recognized types of interaction are assumed to be absent. The proposed framework offers one method for assessing PV interactions. An example illustrates the framework and shows that ignoring PV interactions can result in both nonoptimal project selections and resource allocations, even when traditionally recognized types of interactions are absent. The framework and resulting model should be useful in enhancing decision making in firms using PV-based approaches to project selection, whether or not they are interested in using a model that accounts for PV interactions. This is expected since the overall framework provides a basis for analyzing the probable consequences of assuming that no PV interaction is present and for communicating these probable consequences to management
Note—On “Optimizing Field Repair Kits Based on Job Completion Rate”
Authors: March Salvatore T. , Scudder Gary D.
Published: November 2008

In a recent paper, Mamer and Smith (Mamer, J. W., S. A. Smith. 1982. Optimizing field repair kits based on job completion rate. Management Sci. 28 (11) 1328–1333.) presented a formulation for determining the optimal kit of parts and tools for on-site equipment repairs under a job completion criterion. The optimal kit minimizes the sum of expected broken job costs plus the annual inventory holding cost for those parts stocked. A broken job occurs whenever a repair cannot be completed because one or more of its required parts are not included in the field repair kit. Assuming equal penalties for all broken jobs, an algorithm developed by Eisner and Severance (Eisner, M. J., D. G. Severance. 1976. Mathematical techniques for efficient record segmentation in large shared databases. J. Assoc. Comput. Mach. 23 (4) 619–635.) in a different context can be used to determine a set of optimal policies and a range on the penalty cost for which each policy is optimal. The ranges cover all penalty costs from 0 to ∞. This is significant for the repair kit problem since the actual penalty cost of broken jobs may be difficult to determine exactly.
The Natural Logic of Management Policy Making: Its Implications for the Survival of an Organization
Authors: Hall Roger I.
Published: November 2008

A process-theoretic approach, seldom used but not without promise for organizational behavior research, is employed to postulate a process model of the natural logic evident in organizational policy making. The model is used to explain how the policies of a sample firm (for which 20 years of data are available) became adopted and how, together with critical events, this caused the firm to evolve in particular directions rather than others. Implications of the study are put forward in terms of identifying pathologies of the policy making process. Some prescriptions are put forward for the proper control of organizations by supervisory bodies, such as boards of directors. It is suggested that Management Science, in the form of systematic procedures for adaptive organizational design and updatable cause maps, may have an important future role to play in senior management affairs.
Portfolio Theory for Independent Assets
Authors: McEntire Paul L.
Published: November 2008

This paper presents several new concepts for portfolio problems with independently distributed asset prices. A criterion is developed for including or excluding assets in an optimal portfolio for an investor maximizing the expected value of a von Neumann–Morgenstern utility function. The central concept of the generalized harmonic mean is introduced: it is shown to be the analogue of the riskless rate of return for problems without a riskless asset. A new ordering theorem is proven, showing that an optimal portfolio always consists of positive amounts of the assets with the largest mean values. Next, the concept of independence from irrelevant alternatives is introduced for portfolio problems; this is a property of utility functions and is proven to be true for most of the commonly used utility functions. Altogether, the results provide new insights and tools for portfolio problems with independent assets and extend earlier results by Samuelson, and Fishburn and Porter.
A Comparison of the Optimal Ordering Levels of Bayesian and Non-Bayesian Inventory Models
Authors: Azoury Katy S. , Miller Bruce L.
Published: November 2008

Although it is often the case that the parameters of the distribution of demand are not known with certainty and that a Bayesian formulation would be appropriate, such an approach is generally not used in inventory calculations for computational reasons. Since one often resorts to a non-Bayesian formulation, it is of interest to compare Bayesian policies with a comparable non-Bayesian policy. Using the concept of flexibility it was anticipated that the quantity ordered under the non-Bayesian policy would be greater than or equal to that under a Bayesian policy. This result is established for the n-period nondepletive inventory model. However, a two-period counterexample is given for the standard (depletive) inventory model.
Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis
Authors: Banker R. D. , Charnes A. , Cooper W. W.
Published: November 2008

In management contexts, mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best. In this capacity, mathematical programming serves as a planning aid to management. Data Envelopment Analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments, however they may have been planned or executed. Mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities. The CCR ratio form introduced by Charnes, Cooper and Rhodes, as part of their Data Envelopment Analysis approach, comprehends both technical and scale inefficiencies via the optimal value of the ratio form, as obtained directly from the data without requiring a priori specification of weights and/or explicit delineation of assumed functional forms of relations between inputs and outputs. A separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of DEA directly on observational data. Technical inefficiencies are identified with failures to achieve best possible output levels and/or usage of excessive amounts of inputs. Methods for identifying and correcting the magnitudes of these inefficiencies, as supplied in prior work, are illustrated. In the present paper, a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing, constant or decreasing returns to scale (in multiple input and multiple output situations). The results are discussed and related not only to classical (single output) economics but also to more modern versions of economics which are identified with “contestable market theories.”
Stochastic Models of Internal Mail Delivery Systems
Authors: Nahmias Steven , Rothkopf Michael H.
Published: November 2008

This paper develops two stochastic models of an internal mail delivery system in which a single clerk picks up, sorts and delivers mail to a closed loop of offices. The two models differ in whether deliveries are made at scheduled times or not. For a model in which all mail picked up each round is sorted before the next delivery, we assume that mail is generated in the system by a stationary Poisson process and derive an expression for the expected delay between generation of a letter and its ultimate delivery. These results are then extended to systems in which letters are generated according to a stationary compound Poisson process and to multiple clerk delivery systems.

A second model in which mail is delivered at scheduled times only is shown to be equivalent to a classical storage process. For this model, we derive bounds on the expected number of letters left unsorted at the start of a scheduled delivery and the expected delivery delay. This model is also generalized to multiclerk systems.