bluuebunny/crossref_metadata_2025 huggingface dataset:
A Decision Theory Approach to Portfolio Selection
Authors: Mao James C. T. , Särndal Carl Erik
Published: November 2008

This paper starts with a brief summary of Harry Markowitz's portfolio selection model and proceeds to reformulate it within the framework of modern statistical decision theory. The future returns from securities are viewed as a function of the unknown state of nature. The investor has certain a priori probabilities for the different states of nature, which probabilities he later modifies in the light of new experimental information. Following the Bayesian strategy, the investor chooses that portfolio of securities which maximizes the weighted average of payoffs, using as weights the a posteriori probabilities of the states of nature. A computer program, based on the critical line method, is used to solve a simple illustrative problem.
The Principle of Causation as a Basis of Scientific Method
Authors: Regopoulos M.
Published: November 2008

The basic condition underlying the entire dimension of scientific research is the firm belief in the causal inevitability of natural phenomena. It is the scientist's job to seek to identify the causes of such phenomena. He is furthermore expected to discover the interrelationships of cause and effect. Accordingly we can assert that scientific research, especially as it has developed after the Renaissance, can be considered to be primarily the practical application of the principle of causation based on observation, analysis (deductive or inductive), experiment, formation of hypothesis, and the formulation of theories and models.
The Sequential Selection of Approaches to a Task
Authors: Marschak T. A. , Yahav J. A.
Published: November 2008

A task (e.g., development of a satisfactory item by a Research and Development team) is to be performed. A population of distinct approaches to the task is available. The decision maker's preferences over completed approaches are representable by a utility indicator. The utility of an approach is unknown until it is completed, but as the approach is pursued successive estimates of its utility become available at each of a finite sequence of decision points. The vector composed of an approach's estimates and its true utility is a random variable with known distribution. Pursuing an approach from one decision point to the next costs a fixed amount. Starting from an initial random drawing from the population of approaches, the set of approaches to be further pursued is narrowed down at each decision point. The paper seeks, under alternative conditions on the distribution, computationally and economically interesting properties of an optimal policy, prescribing both the sequential narrowing down and the size of the initial drawing.
Theory and Application of an Estimation Model for Time Series with Nonstationary Means
Authors: Hinich Melvin , Farley John U.
Published: November 2008

Time series models of a complex nature, such as consumer brand switching analyses, have required assumptions of parameter stability because statistical models were not available to deal with parameter change. A model is developed here to estimate a stepwise change in the mean process of a Gaussian time series. Estimators which are small-sample efficient in a special sense are presented, along with examples and suggested applications of the method to brand switching problems.
The Effects of Parameter Misspecification and Non-Stationarity on the Applicability of Adaptive Forecasts
Authors: Bossons John
Published: November 2008

A “blowup factor” is defined for the measurement of the effect on forecast error variance of two types of misspecification which may be implicit in the choice of a particular adaptive forecasting scheme: (1) misspecification of the number of non-zero parameters of the stationary linear stochastic process generating the observed time series, and (2) misspecification arising from postulating stationarity when in fact the generating process is non-stationary in mean.
Warehouse Location Under Continuous Economies of Scale
Authors: Feldman E. , Lehrer F. A. , Ray T. L.
Published: November 2008

Warehouse Location is a nonconvex programming problem involving the geographic placing and sizing of intermediate facilities in distribution studies. The nonconvexities are caused by economies of scale associated with the cost of building and operating the facilities. A heuristic program has been developed for solving warehouse location problems when these economies are representable by continuous concave functions. The paper discusses the heuristics used and computational experience with the program on “practical” problems. On the basis of two numerical examples for which an optimal solution was obtained through a special purpose experimental mixed integer programming code, it is conjectured (1) that near optimal solutions can be achieved using the heuristic program and (2) that optimal sizing and locating of facilities are very sensitive to the shapes of the warehousing cost functions.
The Analysis of a Simple Class of Multistage Inspection Plans
Authors: White Leon S.
Published: November 2008

A simple class of multistage inspection plans is considered for an ordered production process consisting of N − 1 manufacturing stages and a final inspection stage. The plans are applied to batches of items of size S. At each stage any number of items from 0 to S may be inspected. Defectives found are replaced with non-defectives. Costs of inspection, replacement, and the cost of undetected defectives are included. It is shown that under certain conditions an optimal inspection plan has the property that at every stage either the whole batch is inspected or no inspection is performed. In such cases a very simple dynamic program can be solved to find the optimal plan.
Minimum Cost Replacement Under Markovian Deterioration
Authors: Kolesar Peter
Published: November 2008

Conditions are derived under which optimal replacement rules for systems subject to Markovian deterioration and failure are given by control limit replacement rules. An efficient method of deriving such rules is given which is based on the simplex algorithm.
A Quadratic Programming Approach to the Estimation of Transition Probabilities
Authors: Theil H. , Rey Guido
Published: November 2008

In a recent article L. G. Telser [Telser, L. G. 1963. Least-squares estimates of transition probabilities. Measurement in Economics: Studies in Mathematical Economics and Econometrics in Memory of Yehuda Grunfeld, Chapter 11, Stanford University Press, Stanford, California.] considered the problem of estimating transition probabilities in Markov processes from a set of observations on one-dimensional frequency distributions. The problem is to estimate the matrix of transition probabilities under the assumption that observations are confined to the shares of the n possibilities in successive periods. The present paper is an extension of the work of Goodman [Goodman, L. A. 1953. A further note on Miller's “finite Markov processes in psychology.” Psychometrika 18 245–248.] and Telser.
Forecasting Non-Stationary Economic Time Series
Authors: Couts D. , Grether D. , Nerlove M.
Published: November 2008

The purpose of this paper is to show how certain results obtained by Peter Whittle [Whittle, P. 1963. Prediction and Regulation by Linear Least Square Methods. English Universities Press, London.] may be used to derive the results on adaptive forecasting obtained by Wage and Nerlove [Nerlove, M., S. Wage. 1964. On the optimality of adaptive forecasting. Management Sci. 10(January) 207–24.] and to carry forward the general program of that paper; namely, to study the prediction of those types of non-stationary and non-deterministic series1 which can be reduced to stationary series by a finite linear transformation. For this class of non-stationary series it may be shown in general that the optimal forecast for any future period may be expressed as a linear combination of past values of the series, and past one-step prediction errors; they are, in this sense, “adaptive.” Unfortunately, this class contains series which, when transformed, have infinite moving average representations. For these series the adaptive representation of the optimal forescats will contain an infinite number of terms, and thus, in terms of the original motivation of adaptive forecasting, be less than helpful. Such considerations do, however, suggest what the limits of applicability of the adaptive representation are, and give a criterion for choosing between the autoregressive and adaptive representations in the case of any particular series. The analysis is illustrated by forecasts of unemployment of males, aged 14–19, one, four, and fifteen months ahead.
A Deterministic Multi-Period Production Scheduling Model with Backlogging
Authors: Zangwill Willard I.
Published: November 2008

A deterministic multi-period production and inventory model that has concave production costs and piecewise concave [Zangwill, W. I. 1965. A dynamic multi-product, multi-facility production and inventory model. Technical Report 1, Program in Operations Research, Stanford University, Stanford, California, April 29.] inventory costs is analyzed. An essential feature of the model is that it permits backlogging of unsatisfied demand; otherwise the model is similar to the one considered by Manne [Manne, A. S. 1958. Programming of economic lot sizes. Management Sci. 4(2, Jan.) 115–135.], Wagner and Whitin [Wagner, H. M., T. M. Whitin. 1959. Dynamic version of the economic lot size model. Management Sci. 5(1, October) 89–96.], Wagner [Wagner, H. M. 1960. A postscript to “dynamic problems to the firm.” Naval Res. Logist. Quart. 7(March) 7–12.], and Veinott [Veinott, A. F., Jr. 1963. Unpublished notes. Stanford University, Stanford, California.]. By permitting backlogging, which mathematically means that inventories can be negative, the concavity assumptions of these authors are no longer appropriate. Instead we consider piecewise concave cost functions to find the form of the minimum cost production schedule. An efficient dynamic programming algorithm to calculate the minimum cost schedule is also presented.
On a Class of Optimal Stock Depletion Policies
Authors: Mossin Jan
Published: November 2008

The following problem is solved by the calculus of variations: How should a monopolist sell off a fixed stock of a commodity so as to maximize the present value of profits if demand per time unit is linear in price and subject to exogenous growth, deterioration is proportional to remaining stock, and carrying cost is proportional to stock.
On the Generation of Discount Rates and Implicit Prices Through a Replacement Model
Authors: Enzer Hermann
Published: November 2008

The purpose of this paper is to generate discount rates and implicit prices by applying theorems of Frobenius and Bellman to non-negative matrices. The model which is developed may be useful in situations in which management decisions must be made regarding the replacement of aging and obsolescing equipment for some specified period of time. One version of the model allows choices among alternatives and another version leads to a deterministic form. The discount rate which is derived is the reciprocal of the maximal growth rate which is obtained as the largest (positive) root of the non-negative matrix introduced in the first version of the model, while the implicit prices arise from an associated eigenvector. The model may be particularly useful in situations where market rates and market prices do not properly reflect values as is the case for some public goods.
Programming Variable Factors
Authors: Wilson Robert
Published: November 2008

A duality theory and two computational algorithms are developed for variable-factor programming, a name given to linear programming when the profit coefficients are functionally dependent upon a program of variable-factor inputs in limited supply. Computational experience is reported for one of the algorithms. An interesting and useful feature of the dual problem is that it is a concave programming problem, whereas the primal problem is not.
The Direct Solution of the Transportation Problem with Reduced Matrices
Authors: Dwyer Paul S.
Published: November 2008

A discussion of the importance of a direct method in obtaining all the solutions of a transportation problem, and in obtaining solutions of more general problems, is followed by a discussion of methods of reduced matrices in which the transportation matrix is reduced, by a series of subtractions from rows and columns, to a transformed matrix to which the orthogonality condition is applicable. The direct method proceeds in a series of simple steps to the determination of zero terms having associated xij values which eventually satisfy the row and column equations. Formal and informal versions are presented and application is made to several general problems.
Long Range Planning in Open-Pit Mining
Authors: Albach Horst
Published: November 2008

In open-pit mining of lignite, production plans have to be set up for a period of about twenty to thirty years. This is partly due to the close interaction of production plans and investment plans and partly due to legal requirements for open-pit mining in Germany. The major uncertainties encountered in setting up a production plan stem from the geological structure of the pit. The total deposit of lignite in the field as well as the stratification of the layers of waste material and lignite can he considered as stochastic variables. The production plan is formulated as a chance-constrained programming problem. The model requires maximization of a linear form subject to linear and non-linear constraints. In order to facilitate computation of the large-scale problems encountered in practical applications the original model is changed into a straightforward linear programming model. An iteration procedure is derived by which the solution to the original non-linear problem is found. The production plan is computed for different levels of acceptable risk. The results form a risk-profit-surface from which management has to pick the optimum-optimorum plan according to its risk-preference function.
Decision-Making Allowing for Uncertainty of Future Investment Opportunities
Authors: Kaplan Seymour , Barish Norman N.
Published: November 2008

All capital investment decisions are made under varying degrees of risk and uncertainty. Evaluations of the desirability of capital investments require estimates of present conditions as well as forecasts of future events which involve these risks and uncertainties. Several recently developed models for capital investment decision-making have involved the random variable treatment of anticipated cash flows. When present worth calculations are made in these cases, a fixed interest rate is usually assumed. When internal rate of return calculations are made, the minimum acceptable rate of return is given a fixed value.

This paper treats the minimum attractive rate of return (used with present worth calculations) and the minimum acceptable internal rate of return (used with internal rate of return calculations) as stochastic variables having subjective probability distributions. This procedure takes explicit account of the uncertainty of future investment opportunities. It is shown that, under certain circumstances, significant differences in the values of the mean and the variance of the criteria for making the investment decision are obtained when the results of this procedure are compared with results using the usual deterministic interest rate or minimum acceptable rate of return.
Sales Forecasting with the Aid of a Human Behavior Simulator
Authors: Schussel George
Published: November 2008

This article describes a recent application of simulation to a forecasting problem. The simulation was of the human behavior characteristics of a diverse group of retail dealers. The purpose of the simulation was to propose and test a new method of forecasting a manufacturer's sales to his retail dealers. A simulation model of dealer behavior was constructed and proved very effective in helping the manufacturer to generate good sales forecasts. Unsophisticated retailers were found to have a sufficiently systematic set of procedures to permit simulation of these procedures by a computer model and it was concluded that effective simulation of the human decision processes of a large non-homogeneous group of businessmen is possible.
Some Principles of Practical Welfare Economics
Authors: Simon Julian L.
Published: November 2008

Non-profit institutions must make many kinds of decisions about allocations of resources. The theory is clear: allocate so that the marginal utility is equal in all uses. But this is more easily said than done.

This paper suggests a series of heuristic steps by which real-life non-profit allocation situations can be coordinated to the marginal analysis. It discusses the assumptions that must and should be made and sets forth a conceptual framework for the analytic decisions. The process is illustrated with an example from library research—the decision about how many books should be placed into storage libraries to maximize the welfare of a university community.
Rules for Investigating Cost Variances
Authors: Duvall Richard M.
Published: November 2008

Several writers have suggested quality control procedures in order to determine when an observed variance of actual cost from standard cost should be investigated in order to determine if the variance is due to non-standard performance. These procedures do not explicitly consider the cost of an investigation and the benefits derived from discovering and correcting the cause for the variance. The purpose of this paper is to indicate how these costs may be made a part of the decision to investigate a given cost variance.
Management Education in India
Authors: Pylee M. V.
Published: November 2008

Fifteen years ago hardly anyone had thought seriously about the need of organized management education in India. Soon after Independence in 1947 a high level Commission on Education was appointed by the Government of India with Dr. S. Radhakrishnan (the present President of India) as Chairman to make a comprehensive study of the various aspects of the educational system then existing and make recommendations for its modification for the new requirements of the nation. This commission however, had little to say on management education. But the formulation of a definite program for planned economic development soon after, brought about a complete change in the situation. The need for technically trained and competent administrative personnel became urgent. As a result, during the past one decade there has been an increasing awareness of the need for providing facilities of training in management.
Competitive Bidding with Asymmetric Information
Authors: Wilson Robert B.
Published: November 2008

This paper analyzes the problem of competitive bidding (via sealed tenders) under uncertainty when one of the parties knows the value of the prize with certainty. A real problem of this type has been reported in a case study by Woods. The equilibrium strategies are derived and characterized for computational purposes in terms of the solution to a related differential equation. An example is solved in detail and found to be rather surprising in terms of the relative strength it imputes to the position of the party with better information.
On the Art of Modeling
Authors: Morris William T.
Published: November 2008

The problem of teaching or developing creative modeling ability is considered in the light of three basic hypotheses concerning the processes of enrichment (elaboration of very simple models), association (analogy with previously developed structures), and alternating attention to different aspects of the task. Based on these hypotheses, specific steps are presented which have been developed to help individuals acquire modeling skills. The steps are illustrated by means of an example. Other sources of modeling ability are also suggested.

The discussion focuses on specific hypotheses concerning the differences between the teaching of models and the teaching of modeling.
Sugar Cane Irrigation: A Case Study in Capital Budgeting
Authors: Champion Robert R. , Glaser R. George
Published: November 2008

A study of irrigation, economics was conducted in 1963 on a 10,000 acre sugar plantation in Hawaii and repeated in 1964 on three additional plantations covering 34,000 acres.

The objective of the study was to recommend, on an agronomic and economic basis, a program for investing large amounts of capital in newly developed automatic and semi-automatic irrigation systems.

Although basically a problem in capital budgeting, a number of complicating factors precluded the straightforward application of traditional investment analysis techniques. The more important of these factors were:

1. Many Alternatives. The wide range of physical conditions found on each plantation ruled out the selection of a single “best” irrigation system. As a result, a number of systems had to be evaluated for each of several hundred cane fields.

2. Combinatorial Aspects. Investments in individual cane fields were interdependent since groups of fields shared common water sources; thus, combinations of investments had to be analyzed, increasing the number of investment alternatives astronomically.

3. Opportunity Value of Scarce Resources. New irrigation systems offered substantial water savings. However, the value of these savings arises from the “opportunity” value of water in alternative uses. Alternative uses, in turn, depend on how much water is saved. Thus, no value for potential savings on the plantation could be established until the investment analysis was run, first for individual alternatives and then for combinations of alternatives.

4. Complicated Timing. Because of crop planting schedules, new systems would be installed on small increments of acreage over a period of 8 to 10 years. Thus, “nonconventional” investments (outlays interspersed with benefits such that the stream of cash flows had multiple sign changes) occurred in multiple time periods; furthermore, because of crop harvesting schedules, returns from these investments also were distributed over multiple time periods with varying amounts of delay between investments and returns. The approach used to solve this problem is described in the paper.
New Directions in Administration
Authors: Feigenbaum Donald S.
Published: November 2008

It is my purpose to review the matter of relative emphasis upon the quantitative school of administrative thought as compared to the qualitative school and their long term impacts—or possibly lack of them—upon industrial administration, which in action, quite obviously is always some amalgam of qualitative and quantitative practices. My approach will be to state the case for modern quantitative methods and then to offer some concluding remarks to evaluate this case.
Prospects for the Management Sciences in Advertising
Authors: Lipstein Benjamin
Published: November 2008

The advertising industry is likely to be three times its current size by 1985. In view of current labor force trends, it is unlikely that the advertising industry will be able to attract a sufficient number of people to service that volume of advertising. The key to servicing this large volume of advertising is likely to be the management sciences which will provide the basis for increased productivity in the advertising industry. On the basis of past technological trends in the industry, this paper attempts to make some predictions as to the kinds of activities that are likely to be required in the agency of the future and the kinds of skills and talents that will be needed to man the agency of the future.
The Rise of Management Science in Advertising
Authors: Cohen Stanley I.
Published: November 2008

Over the past decade, the roles of Management Science and Operations Research in Advertising have grown, under the salient influence of computer methodology, from a modest experimental project state to a full scale systems state. The rate of growth manifests itself in (1) the size and complexity of problems being tackled, and (2) the widening sphere of techniques being brought in to use. The classic areas of Advertising Research such as Product, Consumer, Media, and Copy Research, defined as the Advertising-Marketing Complex, are availing themselves of the mathematical and statistical modeling techniques being designed throughout the entire research community of the world. Techniques such as mathematical programming, simulation, Bayesian analysis, multivariate analysis, and Markov analysis have become everyday production and research tools to the Advertising Industry. This paper will outline the growth and the current state of important areas of Advertising Research in relation to their involvement with Operations Research and Management Science.
Effects of Learning on Optimal Lot Size
Authors: Keachie E. C. , Fontana Robert J.
Published: November 2008

This paper deals with the effects of learning on the calculation of optimal economic lot sizes in intermittent production.

It is assumed that the manufacturing time of the lots is of such length that phenomena usually called “learning” can be encountered within each lot. The three different cases that can occur are incorporated into a model which demonstrates that the traditional lot size formulae may well indicate lots that are smaller than the true optimum. Numerical examples show the significance of these differences.

A simple deterministic model is used but results are seen to be extended easily to more complex cases.
A Decision-Theoretic Approach on Deciding when a Sophisticated Forecasting Technique is Needed
Authors: Harris Lawrence
Published: November 2008

This note describes a decision-theoretic approach for deciding on when it is worthwhile to obtain a sophisticated statistical forecasting model and when an unsophisticated approach suffices. By developing a forecasting loss function for an example, the prior cost of uncertainty is first determined. Based on this cost, it is decided whether the sophisticated model should be obtained. If this is decided in the affirmative, the posterior cost of uncertainty is determined and the net gain from this decision is obtained.
Technological Forecasting in Perspective
Authors: Isenson Raymond S.
Published: November 2008

The term, technological forecasting, is appearing with ever increasing frequency in the public utterances of government and industrial leaders. Yet it is obvious to even the most casual observer that little agreement exists as to the meaning of the term, the potential for useful forecasting, regardless of detailed nature, or the status of relevant studies. The purpose of this paper is to review generally the various, apparently useful forecasting techniques, to offer a rationale basis for undertaking a technological forecast, and to place technological forecasting in perspective with regard to other planning inputs.
Capital-Budgeting Decisions Involving Combinations of Risky Investments
Authors: Van Horne James
Published: November 2008

In this paper, a method is proposed for evaluating combinations of investments when the cash flows are not known with certainty. Various probability concepts are employed; and combinations are evaluated according to their incremental contribution of expected net-present value and variance to the firm as a whole. It is shown that existing investment projects must be considered if the total risk of a particular combination of investment proposals is to be evaluated realistically. Through diversification of investments, a firm is able to obtain the most desirable combination of expected net-present value and risk.
Subject Performance in Two Six-Man Communication Network Experiments
Authors: Marshall Wayne S.
Published: November 2008

A detailed report of subjects' behavior in two six-man communication network experiments is given. These are perhaps the first six-man experiments in the Bavelas-type communication networks to be reported. Main features of subject performance lead one to question the idea of “optimal organizational behavior” even in this very simple situation.
Problem-Solving Trends in Management Science
Authors: Prasad S. Benjamin
Published: November 2008

The purpose of this paper is to present data and some interpretation relating to (a) the classes of problems in general, (b) as they relate to specific business functional areas, and (c) the management science techniques employed to solve the problems.

The presentation is based upon a content analysis of 354 articles published in Management Science, January 1955 through September 1964, upon the classes of O. R. problems suggested by Professor Russell Ackoff in his Manager's Guide to Operations Research. Data presented in this analysis suggest that the majority of problems were those concerned with allocation in the production functional area and that linear programming was the most widely used technique. At the end of the paper it is suggested that “management science” is still evolving, and has a long way to go if it should emerge as a science concerned with (top) managerial problems in industrialized and developing countries.
Management Sciences and Management—Some Requirements for Further Development
Authors: Charnes A. , Cooper W. W.
Published: November 2008

This paper was prepared for presentation on October 15, 1965, as a luncheon address at The Institute of Management Sciences Eastern Meeting held at the Sheraton Hotel, Rochester, New York.

Some of our thoughts on this subject were stimulated by a TIMS sponsored methodology symposium on implementation held at Monterey California, during December of 1964 and, which was subsequently followed by our participation in a round table conference organized by Harvey Wagner for the 1965 National Meetings of TIMS in San Francisco on February 3, 1965. Subsequent discussions with G. Kozmetsky of Teledyne, Inc., D. B. Learner of BBDO, Inc., and B. M. Rowles of M&M's Candies, Inc., were also important in helping us to shape the ideas that are presented in this paper.
Some Aspects of the Effects of the Regional Distribution of Scientific Talent on Regional Economic Activity
Authors: Horowitz Ira
Published: November 2008

There is a persistent belief that regional R and D activity will have stimulating effects on the region's economic activity. In order to explore this view further, a multi-equation econometric model is derived to determine the extent to which the spatial distribution of scientific talent is in turn reflected in regional economic activity. The parameters of the model are estimated by the two-stage least-squares method. It is concluded that such economic variables as investment in plant and equipment, employment, and earnings are positively related to the distribution of scientific talent, although these relationships are relatively inelastic. It is also seen that the regional distribution of Department of Defense R and D expenditures tends to be extremely elastic with respect to the regional distribution of scientific talent. It is therefore concluded that concern for the scientific sophistication of a region's population, and the economic implications of this sophistication, is by no means misplaced.
Strictly Concave Parametric Programming, Part I: Basic Theory
Authors: Geoffrion Arthur M.
Published: November 2008

This paper, which is presented in two parts, develops a computational approach to strictly concave parametric programs of the form: Maximize α f1(x) + (1 − α)f2(x) subject to concave inequality constraints for each fixed value of α in the unit interval, where f1 and f2 are strictly concave and certain additional regularity conditions are satisfied. This class of problems subsumes a corresponding class of vector maximum problems and also, by means of a simple device, provides a deformation method for ordinary concave programming. The approach is based on exploiting the continuity properties of the parametric program so as to efficiently maintain a solution to the associated Kuhn-Tucker conditions as a traverses the unit interval. The same approach can be adapted to much more general parametric programs than the one above.

In Part I, a Basic Parametric Procedure is derived and shown to be finite in a certain sense. It forms the basis of various parametric programming algorithms, depending on what special assumptions are made on the functions. In Part II, additional theory is developed that facilitates computational implementation, and one possible general-purpose algorithm for a digital computer is given. An illustrative graphical example is presented and several extensions are indicated.
Planning Models
Authors: Starr Martin K.
Published: November 2008

At present, the term planning has many meanings and little substance. It is an omnibus word or a dressing gown under which a variety of management matters masquerade. So many management activities are described as planning that the significance of the term may have succumbed to generality.

The planning function appears to be a status generator, presumably because planning is closely associated with top managements' interests. It is surrounded with emotional issues furthermore, that help to obscure the difference between what we say we are doing (i.e., planning) and what we are doing (?).

Although planning models are the subject of this paper, from the viewpoint of consistent terminology and unambiguous definition they don't exist. On the other hand, as judged by common usage, most management science models qualify as planning models. At the uppermost entrepreneurial levels planning is almost exclusively an intuitional affair. But characteristically these domains are dramatically unstable. No maps exist for traveling in such regions. Usually, even the fundamental dimensions are unknown.

What planning models have been built to cope with these real and vital top-management problems? Search and survey answers, none. Consequently, a paper about planning models can either continue as in present practice to ignore critical issues, or can begin with simple classification—more or less as Linnaeus started back in the 1700's. We have chosen the latter course and begin this paper by attempting to develop a workable taxonomy.
Power Comparability—Its Contribution to a Theory of Firm Behavior
Authors: Sherrard William R. , Steade Richard D.
Published: November 2008

Although the importance of the interdisciplinary approach to the study of business is well recognized as a means of exploring and applying the knowledge and methodology of social and behavioral science to business activity, the surface has barely been scratched as far as our knowledge of the determinants of business policy and action is concerned. This paper expands, in table form, a model of power measurement developed by a political scientist (Robert A. Dahl), and then applies this power measurement table to business decision making at the board of directors level. We feel that the usefulness of power comparison lies in allowing one to discern which individuals or groups influence decision making in the firm, which, in turn, determines at least the formal basis of firm behavior. In a separate section of the paper the effect of a firm's organizational structure on an individual's power is discussed. This is followed by a discussion of the limitations and contributions of “power comparability” to a theory of firm behavior.
Resistance Against Analysis and Planning in Research and Development
Authors: Krauch Helmut
Published: November 2008

Many current reflections on science and technological development seem to be concentrated upon the notion that these processes are not subject to man's conscious control. But, instead of demanding an analysis of research itself, from which conscious control might ultimately be expected, they focus their attention on the consequences of scientific activity. They recommend the scientific comprehension of the results of science, on the ground that only thus can we save ourselves from calamitous consequences. A feeling of helplessness and resignation in the face of the apparent autonomy of technological development is quite common. Its origins may reach far back. With Heraclitus, we feel that war is “the father of all things,” and reach the height of our pessimism in Spengler's Kulturkritik. “The master of the world becomes the slave of the machine.”

This attitude of resignation prevails among large numbers of educated Germans, who persist in closing their eyes to the connections between scientific development and social factors.
The Present Value of Investments in Sinking Funds
Authors: Demetriou Peter A.
Published: November 2008

A discussion of some general properties of investments in sinking funds is followed by a reformulation of an earlier solution of a particular sinking fund problem. Then, a general statement of the problem of calculating the profitability of a sinking fund is followed by a number of applications.
Strictly Concave Parametric Programming, Part II: Additional Theory and Computational Considerations
Authors: Geoffrion Arthur M.
Published: November 2008

The theory presented in Part I of this paper led to a Basic Parametric Procedure for a broad class of strictly concave parametric programs. In this part, additional theory is developed that facilitates efficient computational implementation. An illustrative graphical example is given, and some extensions are indicated.
Linear Programming Solutions for Separable Markovian Decision Problems
Authors: de Ghellinck Guy T. , Eppen Gary D.
Published: November 2008

This paper is concerned with the linear programming solutions to sequential decision (or control) problems in which the stochastic element is Markovian and in which the objective is to minimize the discounted sum of expected costs when a discount factor λ, 0 ≦ λ < 1, is used. In praticular, it deals with a class of “separable” problems for which it is possible to define a “reduced” linear programming problem which will yield the optimal policy and the shadow prices for this problem. The reduced problem involves a substantially smaller number (e.g., 3N vs. N2) of variables than the usual formulation of these problems. Two well-known example problems are solved to illustrate the wide applicability and the utility of these results.
On Choosing an Optimal Technology
Authors: Weitzman Martin
Published: November 2008

This paper is concerned with the problem of choosing, on the enterprise level, a least cost technology for producing a bill of goods. Given certain simplifying assumptions appropriate to a long-run partial equilibrium environment, the problem is shown to be of a form which is solvable with any one of several techniques. Algorithms are presented and discussed. Proofs of their computational properties are provided, and implications for economic theory and decentralized decision making are noted. Finally, the basic model is expanded to consider the effects of modifying some of the economic assumptions.
Communication to the Editor—A Note on “Mathematical Analysis of Rates of Return Under Certainty”
Authors: Norstrom Carl
Published: November 2008

In this note a new approach to the rate of return problem is taken in two stimulating articles by Daniel Teichroew, Alexander A. Robichek and Michael Montolbano [Teichroew, D., A. Robichek, M. Montalbano. 1965. Mathematical analysis of rates of return under certainty. Management Sci. 11 (3, January)] and [Teichroew, D., A. Robichek, M. Montalbano. 1965. An analysis of criteria for investment and financing under certainty. Management Sci. 12 (3, November)]. One of these results, given as theorem II A in the first article, is, however, partly in error.
The Management Sciences in Nepal
Authors: Glazer Herbert
Published: November 2008

The author had the opportunity to conduct an O.R. seminar in Kathmandu, Nepal at the invitation of the Secretary-General of the Asian Productivity Organization, Tokyo, and at the request of His Majesty's Government, The Kingdom of Nepal. This paper contains his impressions and some information about the young managerial class in this recently opened country struggling with the problems of economic development.
Minimum-Cost Checking Using Imperfect Information
Authors: Pollock Stephen M.
Published: November 2008

An event takes place at time t, a discrete random variable with known probability function. At unit intervals of time, a measurement x is observed which yields information about the event; x is a random variable, with a known probability density function being dependent upon whether or not the event has yet occurred.

After each observation, a decision is made that the event has or has not yet occurred. The latter decision implies waiting for the next measurement. The former decision, if correct, ends the procedure. If incorrect, this fact is incorporated, and the procedure continues.

A decision cost structure is assumed that assigns:

(1) a fixed (false alarm) cost to deciding the event has occurred when, in fact, it has not;

(2) a (time late) cost proportional to the time between the occurrence of the event and the decision that it has occurred.

The minimum-expected-cost decision strategy and the minimum cost thus obtained are derived by means of dynamic programming.
On Nonlinear Fractional Programming
Authors: Dinkelbach Werner
Published: November 2008

The main purpose of this paper is to delineate an algorithm for fractional programming with nonlinear as well as linear terms in the numerator and denominator. The algorithm presented is based on a theorem by Jagannathan (Jagannathan, R. 1966. On some properties of programming problems in parametric form pertaining to fractional programming. Management Sci. 12 609–615.) concerning the relationship between fractional and parametric programming. This theorem is restated and proved in a somewhat simpler way. Finally, it is shown how the given algorithm can be related to the method of Isbell and Marlow (Isbell, J. R., W. H. Marlow. 1956. Attrition games. Naval Res. Logist. Quart. 3 71–93.) for linear fractional programming and to the quadratic parametric approach by Ritter (Ritter, K. 1962. Ein Verfahren zur Lösung parameterabhängiger, nichtlinearer Maximum- Probleme. Unternehmensforschung, Band 6, S. 149–166.). The Appendix contains a numerical example.
The Analysis of Simulation-Generated Time Series
Authors: Fishman George S. , Kiviat Philip J.
Published: November 2008

This study applies spectral analysis to the study of time series data generated by simulated stochastic models. Because these data are autocorrelated, analysis by methods applicable to independent observations is not possible. Mathematical models known as covariance stationary stochastic processes are useful representations of autocorrelated time series. The increased publication of literature describing stochastic processes and spectral analysis, in particular, is making these ideas available to an increasing audience.

Section I presents a rationale for our interest in time series models and spectral analysis. Section II describes the basic notions of covariance stationary processes. It emphasizes the equivalence of these processes in both the time and frequency domains; the compactness of frequency domain analysis seemingly recommends it over correlation analysis. Section III provides a heuristic background for understanding statistical spectral analysis. Simple frequency-domain statistical properties are emphasized and compared with the rather involved sampling properties of estimated correlograms. Several relevant statistical tests are described.

Three simulated experiments are used as examples of how to apply spectral analysis. These are described in Section IV. They are (1) a single-server, first-come-first-served (FCFS) queueing problem with Poisson arrivals and exponentially distributed service times; (2) a similar model with the FCFS assignment rule replaced by one that chooses the job with the shortest service time; and (3) yet another similar model, but with constant service time. In this third example both assignment rules are equivalent.

The state of the queue was observed and recorded at unit intervals for all three examples and forms the time series on which Section V is based; theoretical and statistical correlograms and spectra are compared for example 1; examples 1 and 2 are compared using estimated correlograms and spectra; example 3 serves to show some unusual properties of spectra.

A particular conclusion of this paper is that differences in the statistical properties of queue length that result under various assumptions and operating rules are easily identified using spectral analysis. More generally, however, this estimation procedure provides a tool for (1) comparing simulated time series with real-world data, and (2) for understanding the implications that various alternative assumptions have on the output of simulated stochastic models.
A Note on Semi-Probabilistic Grading
Authors: Horowitz Ira
Published: November 2008

This note describes the results of using a semi-probabilistic grading system to determine students' grades in a graduate course in quantitative methods. That is, the students are required to make policy decisions to handle traditional sorts of problems, such as inventory and queuing problems. The points a student receives are some known function of his firm's profits for a particular period, the period having been simulated for each student's firm in accordance with a prespecified probability distribution, given the student's recommendations. In addition, he receives a grade on the assignment based on its a priori quality rather than its ex post success. This note describes the results of using this system, results which in turn lead to some interesting speculations about decision-making and decision makers in general. In particular, it is suggested that even persons well aware of sophisticated procedures for making a rational choice among alternatives will not necessarily take advantage of these procedures, and further, that luck plays a more significant role in success than one might be inclined to concede.
Organizational Decision Making Behavior Under Varying Conditions of Uncertainty
Authors: Conrath David W.
Published: November 2008

The problem of decision making under uncertainty generally has been treated in a rather constrained fashion. Most writers assume that the decision is to be made by an entity (the problem of utility function amalgamation is ignored), that the process whereby it is reached is of no consequence, and that an adequate definition of uncertainty is that traditionally provided in game theory. We contend, on the other hand, that these assumptions are un-realistically restrictive, and that it would do well to look at the problem in its broader aspects. A general framework is provided for this purpose, and it is used in a relatively simple example to demonstrate a possible application.
Critique of: “The Role of the Subconscious in Executive Decision-Making”
Authors: Fisk George
Published: November 2008

Robert Ferber's paper revives a debate almost forgotten in our preoccupation with rational methods for seeking maximum benefits or minimum costs. Normative decision theory helps us to know how to seek optimal solutions, but there is also a need to know how far our daily decisions depart from this ideal. Except for a few studies in experimental heuristics little has been reported in the field of descriptive decision analysis showing how businessmen make everyday decisions. Consequently Ferber's welcome case vignettes reopen the question of how we might proceed in developing more adequate descriptive models of the decision process.
A Markovian Decision Model for a Joint Replacement and Stocking Problem
Authors: Derman C. , Lieberman G. J.
Published: November 2008

Two important classes of problems encountered by industry and government are those dealing with replacement policies and ordering policies. These problems are usually treated separately. A particular model which treats the replacement and stocking problems as one is considered in this paper. It is formulated as a denumerable state Markovian decision model. It is shown that the optimal decision policy has a particular structure. In attaining the optimal policy, this structure is exploited so that an optimal policy can be obtained in a finite number of steps.