bluuebunny/crossref_metadata_2025 huggingface dataset:
OBTAINING AND PARAMETERIZING MULTIPERIOD PORTFOLIOS WITH DESIRABLE CHARACTERISTICS UNDER LOGNORMAL RETURNS
Authors: Hilliard Jimmy E. , Clayton Ronnie J.
Published: June 2007

The expected geometric mean has been shown to be a valuable criterion in ranking portfolios of assets. For example, under certain conditions the maximum expected geometric‐mean portfolio minimizes the expected time to amass a fixed level of wealth as wealth becomes “large.” This paper develops a simple algorithm for obtaining such portfolios when portfolio returns are assumed to be lognormally distributed. The risk‐return characteristics of portfolios are derived and illustrated using data from a subset of stocks found on the New York Stock Exchange.
AN ALTERNATIVE VARIANCE‐REDUCTION STRATEGY FOR RSM SIMULATION STUDIES
Authors: Safizadeh M. Hossein , Thornton Billy M.
Published: June 2007

In the previous paper, Cooley and Houck [1] examined the simultaneous use of common and antithetic random number streams as a variance‐reduction strategy for simulation studies employing response surface methodology (RSM). Our paper supplements their work and further explores pseudorandom number assignments in response surface designs. Specifically, an alternative strategy for assigning pseudorandom numbers is proposed; this strategy is more efficient than that given by Cooley and Houck, especially when more than two factors are involved.
ON THE (RE)DISCOVERY OF FUZZY GOAL PROGRAMMING
Authors: Ignizio James P.
Published: June 2007

An earlier paper and subsequent commentaries in Decision Sciences described purportedly new methods for formulating and solving goal programming problems with fuzzy goals. This note suggests that much of what these articles propose is but a rediscovery of well‐known results.
ESTIMATING EMPLOYMENT DISCRIMINATION LIABILITY WITH A DETERMINISTIC SIMULATION*
Authors: Krzystofiak Frank
Published: June 2007

This paper presents an employment discrimination liability model that estimates back‐pay liability for an employer's discriminatory employment practices by simulating employment practices under assumptions of fairness. Comparison of the racial/sexual composition of the simulated fair work force with the racial/sexual composition of the employer's actual work force permits identification of cases of discrimination. The model suggests that the choice of a stock or flow approach will have a significant effect on the amount of employer liability.
RADIOISOTOPE PRODUCTION SCHEDULING IN A NUCLEAR REACTOR
Authors: Economides Spyros C. , Crawford Wayne T.
Published: June 2007

A multiperiod mixed integer programming model has been developed for the production scheduling of several grades of a radioisotope in a nuclear reactor. Of special interest is the model's capability to evaluate possible future product “short falls” due to the acceptance of an unforecasted demand sales opportunity. The model is essential to decisions concerning reactor loading after an extended shutdown of several periods for modifications, maintenance, and upgrading.
POTENTIAL RESEARCH TOPICS IN DECISION ANALYSIS*
Authors: Keeney Ralph L.
Published: June 2007

Robert L. Winkler's paper [1] provides a comprehensive overview of challenging research areas for decision making under uncertainty. Hence, rather than try to extend the list of research areas identified, this note will attempt to embellish some that I feel are particularly important. In these areas, I feel the value of systematic research is particularly high.

For convenience, the discussion will be organized under the four research categories identified by Winkler with a couple of sugestions following in an “implementation research” category. The reader will note, however, that many of the suggested topics actually relate to more than one research category.
REQUIREMENTS PLANNING FOR CONTROL OF INFORMATION RESOURCES
Authors: Myers Kenneth A. , Schonberger Richard J. , Ansari Abdolhossein
Published: June 2007

Producing reports assembled from files, records, and raw data is a major function of the computer in modern organizations. Transaction processing, records management, file organization, and data‐base management are aspects of the information production function that have received a good deal of attention. But planning, scheduling, and controlling the production of information products have been neglected. For complex applications involving assembly of reports from multilevel information sources, the requirements planning model is suggested as an effective alternative to present methods. Thus, our suggestion is that the computer be used to plan, schedule, and control computer production of information products. Presently available material requirements planning software may be employed with minor modifications that depend on the given information system characteristics. In this paper an example of requirements planning as applied to production of information in a satellite control system is presented.
STOCHASTIC COST‐VOLUME‐PROFIT ANALYSIS IN A COMPETITIVE OLIGOPOLY
Authors: Karnani Aneel
Published: June 2007

Previous stochastic cost‐volume‐profit (CVP) models have assumed that the firm was operating under either perfect competition or monopolistic conditions. This paper presents a stochastic CVP model applicable to oligopolistic competition. Each firm is assumed to maximize a linear function of the expected value and the standard deviation of its random profits. The result is a game‐theoretic model that is solved using the concept of a Nash equilibrium. The results of the model are used to examine a firm's competitive strength. The model can be easily modified to accommodate a measure of risk based on the capital asset pricing theory.
ENVIRONMENTAL SCANNING: THE EFFECTS OF TASK COMPLEXITY AND SOURCE ACCESSIBILITY ON INFORMATION GATHERING BEHAVIOR*
Authors: Culnan Mary J.
Published: June 2007

This field study investigated the use of nine information sources (personal subscriptions to periodicals, company library, data bases, superiors, subordinates, peers, internal documents, consultants, and other outsiders) for environmental scanning by 362 professionals employed in the corporate headquarters of two large commercial organizations. The usage frequency of essentially all information sources was positively related to perceived accessibility; however, usage frequency also tended to be positively related to environmental complexity. These results suggest that the information‐gathering requirements associated with an individual's job may necessitate the use of less accessible sources, and this finding represents a break with prior research.
SCAT AND SPAT: LARGE‐SCALE COMPUTER‐BASED OPTIMIZATION SYSTEMS FOR THE PERSONNEL ASSIGNMENT PROBLEM
Authors: Hill Arthur V. , Naumann J. David , Chervany Norman L.
Published: June 2007

The personnel assignment problem involves the assignment of people to tasks, projects, etc., in a manner that maximizes a measure of aggregate utility for the assignees subject to several assignment constraints. In addition to computationally efficient solution algorithms, the effective implementation of mathematical models to solve the personnel assignment problem must include data processing systems with comprehensive error checking/resolution procedures, end user reports, documentation, and training. This paper summarizes two successful computer‐based systems for solving large‐scale personnel assignment problems that frequently occur in university settings. SCAT, the Student‐Company Assignment Technique, assigns students to job interview slots. SPAT, the Student‐Project Assignment Technique, assigns students to project teams in an MBA field project course. The SCAT and SPAT approaches can be generalized to a wide variety of personnel assignment problems in university, industry, government, and military settings.
REORDER‐POINT MODELS WITH DISCRETE PROBABILITY DISTRIBUTIONS
Authors: Van Ness Paul D. , Stevenson William J.
Published: June 2007

This paper is concerned with the determination of reorder points and safety‐stock levels for situations where both the demand and lead‐time distributions are discrete and independent. Formulas are developed for computing exact probabilities for the lead‐time demand distribution on the basis of empirical distributions. Practitioners can use the model to obtain exact probabilities for situations where the computational burden is justified, while academicians can use the model to evaluate heuristic approaches to the reorder‐point problem.
EOQ FORMULA: IS IT VALID UNDER INFLATIONARY CONDITIONS?
Authors: Jesse Richard R. , Mitra Amitava , Cox James F.
Published: June 2007

The classical analysis of the economic order quantity (EOQ) problem ignores the effect of inflation. When a firm's cost factors are expected to rise at an annual rate of 10 percent or more, what adjustments in order quantities should the firm make to control its lot‐size inventory (or cycle stock)? Using a model that includes both inflationary trends and time discounting, it is concluded that inflation brings no incentive either to increase or to decrease order quantities. In addition, order quantities can be computed using the classical EOQ formula under inflationary conditions, provided that the cost of capital invested in inventory is interpreted as an inflation‐free cost. This interpretation implies that changes in the inflation rate should not affect the cost of capital that is utilized in the EOQ formula for determining order quantities.
CONTINUITY IN MIS/DSS LABORATORY RESEARCH: THE CASE FOR A COMMON GAMING SIMULATOR*
Authors: Courtney James F. , DeSanctis Gerardine , Kasper George M.
Published: June 2007

To date, case analyses and field studies have predominated in MIS/DSS research. Laboratory studies seem not to have been given the attention they deserve. This trend is partially due to: (1) the high costs associated with developing decision simulators and related software to support laboratory research and (2) difficult problems with external validity because of unrealistically simple simulated decision environments and DSS software. Since MIS/DSS laboratory research has been most successful when studies have occurred in an interrelated stream, the development of common, portable, and flexible simulators seems desirable. Common simulators would reduce the time and cost of developing experiments, provide for research continuity, comparability, and replication, and facilitate researcher‐to‐researcher communication. Sufficiently complex simulators and DSS software would reduce problems with external validity by providing more realistic laboratory models. This paper presents a software package that offers considerable potential as a common tool for DSS research.
THE HERMITE DISTRIBUTION AS A MODEL OF DEMAND DURING LEAD TIME FOR SLOW‐MOVING ITEMS
Authors: Bagchi Uttarayan , Hayya Jack C. , Ord J. Keith
Published: June 2007

Heretofore, the Poisson and the Laplace distributions have been used to model demand during lead time for slow‐moving items. In this paper, we present a Poisson‐like distribution called the Hermite. The advantage of the Hermite is that it is as simple to use as the Poisson and the Laplace are. Moreover, the Hermite is the exact distribution of demand during lead time when unit demand is Poisson, P(Λ), and lead time is normally distributed, N(μ, σ2), so long as (μ/σ2)≥Λ. Thus, the Hermite can enhance the accuracy of analysis as well as add to the tools available to the analyst.
EFFECTS OF CONFLICTING ANALYSES ON MANAGERIAL DECISION MAKING: A LABORATORY EXPERIMENT
Authors: Schwenk Charles R. , Thomas Howard
Published: June 2007

Researchers in a variety of disciplines have recommended the use of multiple conflicting data analyses to improve managerial decision making through the challenging of assumptions. This study deals with the effects of single data analyses and conflicting analyses on managers' solutions to a case analysis task. Results showed that managers who received conflicting analyses produced solutions with higher expected profits than those who received single analyses. Implications for the use of analytic decision aids are noted.
THE IMPACT OF PROBABILISTIC INFORMATION ON DECISION BEHAVIOR AND PERFORMANCE IN AN EXPERIMENTAL GAME
Authors: Eckel Norman L.
Published: June 2007

This research presents the results of a longitudinal experiment using experimental gaming. The results suggest that probabilistic information did change decision behavior and improve subject performance in the experiment. Moreover, there appeared to be a learning effect associated with the use of probabilistic information. Finally, the source of information (externally supplied by the researcher or generated by the subjects themselves) had an impact on decision behavior and performance in the experiment.
THE PREDICTIVE ABILITY CRITERION IN EXPERIMENTAL JUDGMENT RESEARCH IN ACCOUNTING*
Authors: Schepanski A.
Published: June 2007

Previous experimental judgment research in accounting has been interpreted as supportive of the linear model as an appropriate representation of decision‐making behavior in nearly all of the tasks investigated. Moreover, nonlinear models have come to be viewed as adding relatively little predictive power over that provided by the linear model, even in tasks considered to be inherently nonlinear. These conclusions were based largely upon evaluating the predictive ability of the linear model in terms of statistics measuring the proportion of variance accounted for by the model. In the present paper it is argued that, since these statistics are not independent of the experimental design, it is not clear whether the high correlations are indicative of the model's success in representing decision‐making processes or instead are more the result of various features of the experimental design. It is suggested that correlational tests be supplemented with qualitative tests of the predictive ability of a model. Implications for accounting are discussed.
A MATHEMATICAL PROGRAMMING APPROACH TO THE SELECTION OF ACCESS PATHS FOR LARGE MULTIUSER DATA BASES*
Authors: March Salvatore T.
Published: June 2007

The selection of an efficient set of access paths is critical to the design of large multiuser data bases. This task is formulated as an integer, linear mathematical program, and an approach to its solution is presented. A series of experiments support the assertion that this approach is sufficient for quickly producing an efficient, if not optimal, set of access paths for data‐base problems of practical significance.
THE EFFECTS OF DEGENERACY ON COST‐COEFFICIENT RANGES AND AN ALGORITHM TO RESOLVE INTERPRETATION PROBLEMS
Authors: Knolmayer Gerhard
Published: June 2007

The problems of determining valid shadow prices and of performing a valid sensitivity analysis for managerial purposes are considered. For primal degenerate optima, earlier results on finding shadow prices are used to propose a clear and efficient method for finding valid cost‐coefficient ranges. An example is used to demonstrate how managerial information can be obtained at degenerate optima.
A TIME‐SERIES APPROACH FOR CONSTRUCTING EXPECTATIONS MODELS*
Authors: Koreisha Sergio G.
Published: June 2007

This article presents an efficient way of dealing with adaptive expectations models—a way that makes use of all the information available in the data. The procedure is based on multiple‐input transfer functions (MITFs): by calculating lead and lag cross correlations between innovations associated with the variables in the model, it is possible to determine which periods have the greatest effects on the dependent variable. If information about k periods ahead is required, fitted values for the expectation variables are used to generate k‐period‐ahead forecasts. These in turn can be used in the estimation of the transfer function equation, which not only contains the usual lagged variables but also allows for incorporation of lead‐fitted values for the expectation variables. The MITF identification and estimation procedures used are based on the corner method. The method is contrasted with the Almon distributed‐lag approach using a model relating stock market prices to interest rates and expected corporate profits.
SENSITIVITY ANALYSIS IN DECISION THEORY
Authors: Evans James R.
Published: June 2007

This paper explores linear programming‐like sensitivity analysis in decision theory. In particular, the paper considers the sensitivity of an optimal decision to changes in probabilities of the states of nature and the development of “confidence spheres” to bound arbitrary parametric changes in the probability vector. Such information can be used to assess the accuracy required in assigning probabilities and the confidence in the maximumutility decision.
ESTIMATION OF MISCLASSIFICATION PROBABILITIES IN THE LINEAR PROGRAMMING APPROACHES TO THE TWO‐GROUP DISCRIMINANT PROBLEM
Authors: Nath Ravinder
Published: June 2007

Expressions for misclassification probabilities are derived under a contaminated multivariate normal model for the linear‐programming approaches to the two‐group discriminant problem.
A UNIFIED APPROACH TO THE PRICE‐BREAK ECONOMIC ORDER QUANTITY (EOQ) PROBLEM*
Authors: Das Chandrasekhar
Published: June 2007

In many developing countries where supply is limited, a premium rather than a discounted price is paid for buying in larger amounts. In order for management science/operations research solutions to be relevant to developing economies, such realities need to be explicitly recognized and any decisions evaluated from that perspective. To illustrate this point, a typical inventory‐purchasing problem is solved. In the process, formulae are developed that introduce simultaneous price and quantity sensitivity into the inventory equation. A systematic procedure is suggested to locate the optimal order quantity for a given schedule of discounts or premiums.
POLICE PATROL BEAT DESIGN: ALLOCATION OF EFFORT AND EVALUATION OF EXPECTED PERFORMANCE*
Authors: Kwak N. K. , Leavitt Michael B.
Published: June 2007

This paper describes an iterative process for deploying police patrol force manpower. An application of the process is described as a case study of the St. Louis County Police Department (Missouri). The application is based on the county geographic information system (COGIS) and uses the hypercube queuing model (HQM). The procedures presented illustrate the generation of performance characteristics associated with a specific beat deployment. The application results indicate that the iterative model presented is a reliable and valid instrument for allocating police patrols.
A MODEL FOR THE PREDICTION OF JUROR DECISIONS*
Authors: Zufryden Fred S.
Published: June 2007

A logit model approach designed to assign a probability whether prospective jurors will favor the defendant or plaintiff in a case, as a function of perceived individual juror characteristics, is described in the context of a case situation. The model, which has been programmed on a hand‐held computer, is designed for implementation in courtroom settings to help defense attorneys evaluate and select jurors in order to minimize the likelihood of large jury awards. Empirical tests of the model are also described.
THE EFFECT OF ESTIMATION RISK IN PERFORMING STOCHASTIC DOMINANCE EFFICIENCY TESTS
Authors: Ritchken Peter H. , Gupta Alok
Published: June 2007

In many applications involving the construction of efficient sets, the parameters of the alternatives are estimated using small examples. As a result, inefficient alternatives may be included in the sample efficient set and efficient alternatives left out. This paper investigates the effects of estimation risk when there are more than two alternatives and limited information. The study reveals that estimation risk is a severe handicap to the practical implementation of stochastic dominance and mean‐variance efficiency analysis.
AN ANALYSIS OF CAPACITY PLANNING PROCEDURES FOR A MATERIAL REQUIREMENTS PLANNING SYSTEM*
Authors: Schmitt Thomas G. , Berry William L. , Vollmann Thomas E.
Published: June 2007

This paper is concerned with planning work‐center capacity levels in manufacturing firms that employ a material requirements planning (MRP) system. It presents four procedures for developing work‐center capacity plans designed to insure the production of components and assemblies as specified by the MRP plan and the master production schedule (MPS). These procedures (capacity planning using overall factors, capacity bills, resource profiles, and capacity requirements planning) are compared using simulation analysis. The results indicate that the performance of a procedure when measured against the MPS depends on the operating conditions of the manufacturing system. The results also indicate that the choice of a particular procedure often represents a compromise among the benefits of improved MPS performance, the costs of preparing and processing data, and the premium expenses required for more frequent adjustments in work‐center capacity levels.
INDUSTRY CLASSIFICATION, ORDINAL DATA, AND BOND‐RATING DECISION MODELS
Authors: Perry Larry G. , Cronan Timothy P. , Henderson Glenn V.
Published: June 2007

This paper studies the use of multiple discriminant analysis on industry‐classified, ranktransformed data to predict corporate bond ratings used in bond‐rating decision models. In addition to statistical advantages, agency descriptions of the rating process suggest such procedures are appropriate. The results of this study support that conclusion.
A NOTE ON DECISION‐MAKING CRITERIA FOR ALGORITHM SELECTION: REDUCING GOAL PROGRAMMING COMPUTATIONAL EFFORT
Authors: Schniederjans Marc J.
Published: June 2007

Most linear goal programming (LPG) algorithms are based on a simplex‐type solution method that begins with an initial simplex tableau with solution‐set variables (basic variables) consisting of all‐negative deviational variables or all‐positive deviational variables. This note (1) demonstrates how computational solution effort can be reduced by selecting the appropriate all‐negative or all‐positive deviational variable algorithm and (2) describes a procedure that can be used to aid decision makers in selecting the appropriate algorithm for all types of applied goal programming (GP) models. Results of this study reveal the procedure as accurate and providing computational time savings when applied to a large sample of GP problems.
Applications and Implementation A SEPARABLE PROGRAMMING APPROACH TO EXPECTED COVERAGE: AN APPLICATION TO AMBULANCE LOCATION
Authors: Saydam Cem , McKnew Mark
Published: June 2007

The maximum expected covering location problem (MEXCLP) is reformulated using a separable programming approach. The resulting formulation—nonlinear maximum expected covering location problem (NMEXCLP)—guarantees optimality and also solves more quickly than previous heuristic approaches. NMEXCLP allows two important extensions. First, minor formulation changes allow the specification of the minimum number of times each node is to be covered in order to satisfy expected coverage criteria. Second, coverage matrices can be constructed that consider two different types of coverage simultaneously. Both extensions are useful for ambulance location problems and are demonstrated in that setting.
COMMENTS ON “COST INCREASES DUE TO DEMAND UNCERTAINTY IN MRP LOT SIZING”: A VERIFICATION OF ORDERING PROBABILITIES
Authors: Wemmerlüv Urban
Published: June 2007

In a recent article in this journal, De Bodt and Van Wassenhove [1] presented analytic derivations related to lot‐sizing behavior under uncertainty. Although their models appear to have been verified in the aggregate by simulation experiments, detailed justifications for several of the derivations are missing. The present paper looks at De Bodt and Van Wassenhove's analysis and provides verifications of (and corrections to) the ordering probabilities and order cycles used by the authors to estimate the cost effects of forecast errors in the particular operating environment studied. The probabilities simulated in this study also generate additional insight into the “system nervousness” caused by lot‐sizing and forecast errors.
A NOTE ON OPTIMAL PORTFOLIO SELECTION UNDER STABLE PARETIAN DISTRIBUTIONS*
Authors: Cheung C. Sherman , Kwan Clarence C. Y. , Yip Patrick C. Y.
Published: June 2007

Elton, Gruber, and Padberg's [2] [3] ranking procedure and Kwan's [6] nonranking procedure for optimal portfolio selection lead to the same solution. This is because of a particular functional property of the cutoff rate for security performance. In this note, the robustness of that functional property is demonstrated the normality of security returns assumed in the above studies is relaxed to encompass the general family of stable Paretian distributions. The proof here is an important step toward portfolio analysis using some multiindex models when securities cannot be ranked.
A LOWER BOUND FOR THE SINGLE‐LEVEL DYNAMIC HORIZON LOT‐SIZING PROBLEM
Authors: Karni Reuven
Published: June 2007

Conventional production planning methods assume the existence of a medium‐ or longrange demand horizon. However, demand usually is known over a much shorter range; scheduling decisions must be made within this “decision window,” which rolls forward in time. This paper presents a new lower bound for lot‐sizing heuristics in a rolling‐horizon framework and compares it to the well‐known Wagner‐Whitin bound. The new bound indicates heuristic schedules that have costs close to the optimum. Rolling‐horizon schedule costs are compared to corresponding static‐horizon schedule costs (assuming the whole horizon is known in advance), using the ratio of decision‐window size to the natural order cycle as a parameter. For values below unity, the rolling‐horizon policy is significantly more costly. For values above one, the two policies have similar costs and actually converge as the parameter value increases.
ASSESSMENT OF MULTIATTRIBUTED MEASURABLE VALUE AND UTILITY FUNCTIONS VIA MATHEMATICAL PROGRAMMING*
Authors: Klein Gary , Moskowitz Herbert , Mahesh Sathiadev , Ravindran A.
Published: June 2007

A major restriction on the use of decision analysis in practice is the frequent difficulty of determining a decision maker's multiattribute utility function. The assessment process can be complex and tedious and generally involves: (1) identifying relevant independence conditions, (2) assessing conditional utility functions, (3) assessing scaling constants, and (4) checking for consistency. Some of the assessment and modeling complexities encountered include an assessor's inability to respond in a quantitatively meaningful and consistent way to hypothetical gambles and an analyst's problem in selecting an appropriate functional form that accurately characterizes the conditional utility assessments. A simplified procedure that mitigates these difficulties is proposed. This procedure facilitates the determination of scaling constants by obtaining (via mathematical programming) a multiattributed measurable value function which is converted to a multiattributed utility function. The methodology can be developed advantageously to produce an interactive software package for use as an assessment aid.
A NOTE ON LEARNING CURVE PARAMETERS
Authors: Camm Jeffrey D.
Published: June 2007

This note describes differences in the feasible range of values that the learning curve parameter may take when a unit learning approach is used as opposed to a cumulative‐average learning curve. Clarification of this point is important because learning curve theory now is used in a variety of areas.
Concepts, Theory, and Techniques INFLATION, MAINTENANCE OF CAPITAL, AND THE IRR MODEL OF CAPITAL BUDGETING*
Authors: Agrawal Surendra P.
Published: June 2007

Businesses operating under inflationary conditions need capital‐budgeting models that help them judge the adequacy of returns on their investments and also allow them to keep capital intact by considering the erosive effects of inflation. The model proposed in this paper computes a modified internal rate of return (IRR); if cash inflows from a project are divided between earnings and recovery of capital, total recovery equals that amount which the capital‐budgeting concept adopted by the business specifies (such as the original investment in constant dollars or its replacement cost). Under this model, a project should be accepted only if this computed rate equals or exceeds a hurdle rate that consists of the inflation‐free rate of return plus the effect of inflation on such a return. Other modifications to the IRR model suggested in the literature do not completely satisfy the objective of capital budgeting under inflationary conditions.
JUDGMENT POLICIES USED IN ASSESSING ENTERPRISE‐ZONE ECONOMIC SUCCESS CRITERIA*
Authors: Miesing Paul , Dandridge Thomas C.
Published: June 2007

This paper reports on a study of the issue relationships and priorities used by public officials in making local economic‐development policy decisions. Economic success criteria for evaluating distressed areas were compared and were found to vary in importance among officials. Policy bases of expert judges were determined. Their differences, as well as the implications of including this type of knowledge in the decision‐making process, are discussed. Recommendations for a more detailed understanding of the public‐policy decision process in economic development, through the use of a policy‐capture approach, are made.
Notes and Communications APPLICATIONS OF MANAGEMENT SCIENCE IN BANKING
Authors: Zanakis Stelios H. , Mavrides Lazaros P. , Roussakis Emmanuel N.
Published: June 2007

This paper identifies and classifies 164 journal articles on management science in banking according to technique and application area. An analysis provides some interesting insights into historical trends and future prospects for research.
Concepts, Theory, and Techniques THE LOT‐SIZE REORDER‐POINT MODEL WITH UPSTREAM‐DOWNSTREAM UNCERTAINTY*
Authors: Noori A. Hamid , Keller Gerald
Published: June 2007

One assumption in the classical lot‐size problem is certainty in the amount requisitioned. In many practical situations, however, the amount received may be a random variable. In this paper, we discuss a lot‐size inventory problem in which the quantity received does not necessarily match the quantity requisitioned. We develop explicit and approximate solutions for the back‐orders case by assuming that the standard deviation of the amount received is linearly related to the quantity requisitioned.
Applications and Implementation A SIMULATION STUDY OF THE RELATIVE EFFECTIVENESS OF ALTERNATIVE ANALYTICAL REVIEW PROCEDURES*
Authors: Knechel W. Robert
Published: June 2007

This paper evaluates the effectiveness of various analytical review (AR) procedures in detecting material errors in account balances. The study tested nine nonstatistical AR procedures based on common heuristic and ratio analyses and four AR procedures based on regression analysis. Simulated account balances were seeded with various magnitudes of errors and each AR procedure was used to detect the errors. It was found that the regression approaches tended to have fewer Type I and Type II errors than other AR procedures.
TRANSFER‐PRICING AND OUTPUT DECISIONS: THE DYNAMIC INTERACTION
Authors: Jensen Oscar W.
Published: June 2007

This paper is concerned with the dynamic interactions between output and transferprice decisions in a three‐country model for a multinational firm when profits taxation and ad valorem tariffs are applied simultaneously. A numerical example is used to illustrate that the three‐country model modifies considerably conclusions reached in the traditional two‐country, two‐goods framework.
AN EMPIRICAL ASSESSMENT OF COMPUTER‐ASSISTED DECISION ANALYSIS*
Authors: Aldag Ramon J. , Power Daniel J.
Published: June 2007

Decision analysis tools often are used in semistructured and ill‐structured situations. While some researchers have argued that computerized decision analysis programs may improve decision quality in such situations, research support for this assertion is weak.

In this laboratory study, business students used a computerized decision‐analysis program with short strategic‐management cases to prepare decision reports. Independent raters' perceptions of aided and unaided decision performance were contrasted, attitudes of students toward the program were assessed, individual differences were correlated with attitudes, and the program's impact on students' perceptions of their decision processes and performance was examined.

Student attitudes toward the computerized aid were favorable, and individual differences in reactions generally were as predicted. However, the program did not improve the independent ratings of students' decision reports and recommendations.

These findings suggest that computerized decision aids should be adopted cautiously. If such aids result in positive user affect and heightened decision confidence without corresponding improvements in decision quality, they may be dysfunctional. Rigorous research methodologies which incorporate independent evaluations of analyses and decisions are recommended for use in future research on computerized decision‐analysis programs.
A NOTE ON HOLDING COSTS AND LOT‐SIZE ERRORS
Authors: Brown Robert M. , Conine Thomas E. , Tamarkin Maurry
Published: June 2007

This note examines the sensitivity of the basic economic‐order‐quantity inventory model to lot‐size errors when holding costs are assumed to be a strictly increasing (though not necessarily linear) function of average inventory. In particular, we show that the penalty associated with ordering either too much or too little is a function not only of the size of the error but of the shape of the holding‐cost curve as well. We demonstrate that, under certain conditions, even relatively small lot‐size errors can be extremely costly.
RANK GENERATION, PRESERVATION, AND REVERSAL IN THE ANALYTIC HIERARCHY DECISION PROCESS
Authors: Saaty Thomas L.
Published: June 2007

Decision making has the objective of finding the best alternative or set of alternatives by considering a number of goals, objectives, criteria, competitors, and other important factors. The analytic hierarchy process is a decision aid used to assist a decision maker in sorting out the complexity of a decision problem and making use of his or her judgments. A decision maker must be assured that the arithmetic operations of any such decision process are the right ones—that they surface the correct ranking and values of the alternatives and preserve or alter ranks appropriately when new alternatives are added or deleted. In this paper it will be shown that with absolute measurement, rank always is preserved, with relative measurement, rank changes with nspect to scveral criteria only because of the structural dependence (involving both numbers and measurements) of criteria on alternatives. A discussion of the effect on rank of replicas and near replicas of the alternatives also is given.
DECISION SUPPORT SYSTEMS FOR ILL‐STRUCTURED PROBLEMS: AN EMPIRICAL STUDY
Authors: Cats‐Baril William L. , Huber George P.
Published: June 2007

Decision support systems (DSSs) are more complex than most other traditional decision‐aid systems. For what types of problems are they more effective, and what design characteristics make them more effective? The laboratory experiment reported here examined the effect of three design characteristics of these systems in the context of decision makers faced with ill‐structured problems. The characteristics were presence or absence of decision‐aid heuristics, degree of interaction between the user and the system, and whether or not the system was computerized. The dependent variables were (1) quality of user performance, (2) user productivity of ideas, (3) user confidence in the quality of his/her performance, (4) user satisfaction with the decision aid or support system, (5) changes in user attitude toward the problem addressed, and (6) changes in user attitude toward computers.

Use of heuristics and increased interaction had positive effects on decision quality, user productivity, and attitude toward computers; they had negative effects on user confidence, satisfaction, and attitude toward the problem addressed. Whether or not the system was computerized did not have a significant effect on any dependent variable. The findings concerning negative effects, in particular, suggest the need for research on the design of heuristics for addressing ill‐structured problems—heuristics that will deliver the positive but not the negative effects observed in this study. The findings also suggest the need for research on how to benefit from computers in the context of solving ill‐structured problems.
AN EXPERT SYSTEM APPLICATION FOR DECISION SUPPORT IN LAW ENFORCEMENT
Authors: Vedder Richard G. , Mason Richard O.
Published: June 2007

Expert systems offer promise for decision‐making support in stressful circumstances such as those that occur when law enforcement officials respond to hostage‐taking incidents. These are life‐or‐death situations in which the costs of decision error are enormous.

This paper reports on an expert system being developed and tested to aid police decision makers in hostage‐taking incidents. Knowledge is represented by rules embedded in an incident‐based decision‐tree network. Four different decision makers who have similar but distinct information needs are supported and their efforts are coordinated by the system, which must function in real time as the crisis unfolds. Clear, concise, highly focused dialogue is required at the user interface since frequently only seconds are available in which to make a decision and implement it.
USING ARTIFICIAL INTELLIGENCE TECHNIQUES TO ENHANCE THE CAPABILITIES OF MODEL MANAGEMENT SYSTEMS
Authors: Elam Joyce J. , Konsynski Benn
Published: June 2007

Decision Support Systems (DSSs) originally were proposed as interactive problem‐solving vehicles through which models and analytical techniques could be made available to decision makers. Model management represents a line of research within the DSS field that focuses on the design and implementation of software environments to support the use of DSSs for this purpose. This paper describes the tasks that must be supported within these environments and illustrates how existing prototype Model Management Systems (MMSs) implementations provide this support. The use of artificial intelligence techniques in such implementations are reveiwed, and three scenarios are presented to show how future MMSs could be constructed using these techniques.
Applications and Implementation: AN EXPERIMENTAL COMPARISON OF CELLULAR (GROUP TECHNOLOGY) LAYOUT WITH PROCESS LAYOUT
Authors: Flynn Barbara B. , Jacobs F. Robert
Published: June 2007

This study compares different strategies for arranging machines in a facility. Computer simulation of two different machine shops was used to compare process layout (the arrangement of groups of machines where the machines within a group are interchangeable) to cellular layout designed using group technology concepts (the use of manufacturing cells where each cell contains different types of machines dedicated to the production of similar parts). Four layout strategies, including process layout, cellular layout, and two hybrid layouts, were compared in two machine‐shop models. The shops that used cellular layouts had shorter setup times, lower machine utilization, and shorter distances traveled, on average. The shops with process layout, however, had better performance on queue‐related statistics such as work‐in‐process inventory level and average flow time. This suggests that a well‐organized traditional job shop may be able to achieve overall performance that at least is comparable to that of the same shop using cellular (group technology) layout.
FIRM EXPANSION THROUGH FRANCHISING: A MODEL AND SOLUTION PROCEDURES
Authors: Pirkul Hasan , Narasimhan Sridhar , De Prabuddha
Published: June 2007

This paper presents a practical model for firm expansion through franchising. The model allows the possibility of opening both company‐owned and franchised stores. The objective is to maximize the expected returns to the franchisor from both types of stores, subject to the total capital outlay budget and the excess capacity available at each warehouse. A relaxation for this problem is studied and a heuristic solution procedure that makes use of this relaxation is developed. Experimental results over a wide range of problem structures show this solution methodology to be very effective, with gaps between feasible solution values and upper bounds generally in the 0 to 1 percent range. An efficient branch‐and‐bound code also is developed. This code is tested on problems with up to 100 potential store locations and 20 regions. It is found to be at least two orders of magnitude faster than a state‐of‐the‐art commercial integer programming package.
TOWARD TEACHING EXCELLENCE IN THE DECISION SCIENCES*
Authors: Brightman Harvey J.
Published: June 2007

Recently the National Commission on Higher Education Issues found serious problems with college‐level teaching and recomended educational reforms. This paper describes one attempt at reform—namely, a course at Georgia State University on university teaching for College of Business doctoral students. The 45‐hour seminar, based on a university teaching model, covers setting instructional objectives, lecture and discussion methods, teaching methods for higher‐level learning, test construction, course evaluation instruments, and instructional and technological innovations. Previous studies have demonstrated repeatedly that teaching improvement seminars can improve teacher and student performance in the classroom. This paper discusses how the seminar could be implemented at other colleges of business administration, extended to faculty development workshops, and ultimately result in a master teacher or instructional professorship.
OPTIMAL PORTFOLIO SELECTION OF BONDS AND STOCKS*
Authors: Cheung C. Sherman , Kwan Clarence C. Y.
Published: June 2007

In the present study, we offer an alternative approach to bond portfolio management which differs from the traditional immunization approach. In doing so, we formalize what has been a common practice among some investors who form portfolios of bonds and stocks with a view to optimizing the trade‐off between risk and return. By using the general multiindex model to characterize the variance‐covariance structure of security returns, both duration theory and modern equilibrium theories of the term structure are incorporated in the analysis. In addition, a simplified selection procedure based on a single‐index model is derived. This procedure is intuitively appealing to practitioners since it selects assets on the basis of reward per unit of risk of individual assets.
A MATHEMATICAL PROGRAMMING APPROACH TO SENSITIVITY ANALYSIS IN SINGLE‐STAGE DECISION MAKING
Authors: Buckley James J.
Published: June 2007

This paper presents sensitivity analyses for a single‐stage decision problem where an action which will maximize the expected payoff must be chosen from a finite number of actions given the states of nature, their probabilities, and the payoffs corresponding to each action and state of nature. Three types of sensitivity analysis are developed: (1) sensitivity analysis on the probabilities keeping the payoff numbers fixed, (2) sensitivity analysis on the payoffs keeping the probabilities fixed, and (3) joint sensitivity analysis on the payoffs and the probabilities. The approach is illustrated with an example. Quite often the sensitivity analysis can be conducted by solving an appropriate linear or quadratic programming problem.
WARRANTY COST ESTIMATION: A GOAL PROGRAMMING APPROACH
Authors: Mitra Amitava , Patankar Jayprakash G.
Published: June 2007

This paper proposes a goal programming approach to the warranty cost estimation problem. Past research on this topic has mostly dealt with a single objective—the minimization of the warranty reserve cost or the maximization of profit. A more realistic approach to warranty cost problems could, however, involve several goals, some of which might be conflicting to others. In this paper, three goals are prioritized. The goals considered are minimization of warranty reserve cost per unit, offering a minimum level of warranty time based on an allowable proportion of failures within the warranty period, and capturing a minimum specified market share of the product. An example is illustrated using the proposed formulation, and goal achievements are discussed.
DIVERSIFICATION GAINS FROM INCLUDING REAL ESTATE IN MIXED‐ASSET PORTFOLIOS*
Authors: Webb James R. , Curcio Richard J. , Rubens Jack H.
Published: June 2007

Diversification gains in mean‐variance efficiency derived from including real estate in financial asset portfolios are examined. Optimal financial and mixed‐asset portfolios were generated by selecting from an investment universe including several distinct financial and real estate media. Deficiencies of previous studies were overcome by employing data with improved representativeness and comparability. The efficient mixed‐asset portfolios dominated the efficient financial asset portfolios implying that purely financial asset diversification is inefficient. The optimal mixed‐asset portfolio prescribed that approximately two‐thirds of the investment wealth be allocated to real estate and one‐third to the financial media.
A Variable Selection Criterion in the Linear Programming Approaches to Discriminant Analysis*
Authors: Nath Ravinder , Jones Thomas W.
Published: June 2007

There are numerous variable selection rules in classical discriminant analysis. These rules enable a researcher to distinguish significant variables from nonsignificant ones and thus provide a parsimonious classification model based solely on significant variables. Prominent among such rules are the forward and backward stepwise variable selection criteria employed in statistical software packages such as Statistical Package for the Social Sciences and BMDP Statistical Software. No such criterion currently exists for linear programming (LP) approaches to discriminant analysis. In this paper, a criterion is developed to distinguish significant from nonsignificant variables for use in LP models. This criterion is based on the “jackknife” methodology. Examples are presented to illustrate implementation of the proposed criterion.
A Principle for Corner Store Positioning under Intrinsic Modeling for Traffic Orientation*
Authors: Hibshoosh Aharon
Published: June 2007

This paper presents the following normative positioning principle in convenience store competition at an intersection.

In countries where traffic advances on the right (left) side of the street, other things being equal, a convenience corner store should locate clockwise (counterclockwise) adjacent to the already established stores.

This principle is established within a spatial framework emphasizing the relationship among the following: consumer‐driver preferences, relative volume of traffic movements, and store potential at different corners. The analysis demonstrates the dependence of competitor strategy on available locations, sequence of positioning, and utility considerations.
Solving Resource Allocation Problems When Earning Effects Are Present
Authors: Harrison Terry P. , Kochenberger Gary A. , Prave Rose S. , Rishel Tracy D.
Published: June 2007

Learning effects play an important role in certain resource allocation problems, and several authors have proposed models for these problems that capture the relevant relationships. However, the models may be difficult to implement or have shortcomings in the prescribed solution procedures. In this paper, we selectively review the work to date and present a simple reformulation that facilitates solution by off‐the‐shelf software.