bluuebunny/crossref_metadata_2025 huggingface dataset:
Inventory Control Research: A Survey
Authors: Whitin T. M.
Published: November 2008

In past decades there have been occasional upsurges of intensive interest in inventory control problems, sometimes in the aftermath of forced inventory liquidation. For the most part, the literature consisted of a few articles in business journals that had but little impact on the current business behavior of the time. In the last few years we have witnessed another upsurge of interest which far surpasses any of its predecessors, with respect to the quantity and quality of the work accomplished as well as its overall impact on the business community. This vigorous research and the interest it has aroused have been made possible by parallel development in research and in business. Statisticians and economists have become interested in industrial problems concomitantly with the increased attention in business to techniques of advanced management. The appearance of this journal is an example of this harmony of interests that has come into being. The fact that modern statistical methods have been applied successfully in several instances has had much influence on the interest level of both research workers and industrialists.
A Remark on the Smoothing Problem
Authors: Antosiewicz H. , Hoffman A.
Published: November 2008

In Hoffman, A. J., Walter Jacobs. 1954. Smooth patterns of production. Management Sci. 1 86–91, the problem of smooth patterns of production—with which we presume the reader is familiar—a formula was found for the solution of the problem in the special case that the requirements are increasing. In this note, we point out that a similar formula holds if the requirements increase up to a certain value, then decrease.
“Management Science” and the Manager
Authors: Drucker Peter F.
Published: November 2008

Most of the writing on the new “Management Science,” that is on the application of systematic methodology to the job of managing in the business enterprise, has so far come from the scientists. Understandably it has therefore focused on the finding of areas in business to which the scientist can apply tools and techniques with which he is already familiar, and on the sharpening and development of these tools. The all but universal approach has been: here is a scientific method, here are scientific tools and techniques; let us find applications for them in the business enterprise.

This paper proposes to look at “Management Science” from the point of view of the Manager. Its focus will therefore be on determining what methodology, what tools and techniques the Manager needs to do an orderly and systematic job of managing.

Concretely the focus will be on the specific process through which the Manager does his work, and on the specific object to which his work is directed; one focus will be on Decision Making, one on the Business Enterprise and its structure.

And the aim of this paper is to develop, albeit in rough and sketchy form, some specifications for “Management Science.”
Elements for a Theory of Teams
Authors: Marschak J.
Published: November 2008

Recent attempts to analyze organization problems in a scientific manner were stimulated by the classical economic theory of the firm (Walrus, Marshall) and by the newer theories of statistical decision functions (Neymann, Wald), the theory of games (von Neumann and Morgenstern), and the theory of communications (Wiener, Shannon). The Office of Naval Research, and especially its Logistics Branch, has encouraged this development. The task is big and can be carried out only step by step. The first step has been to study a particularly simple form of organization which we call a team.
Optimal Estimation of Executive Compensation by Linear Programming
Authors: Charnes A. , Cooper W. W. , Ferguson R. O.
Published: November 2008

Linear programming, as an optimizing method for handling a mass of interacting variables, has received considerable attention in applications to such problems as production scheduling, logistics, and mobilization studies. But linear programming may also be used in a variety of other ways. This paper is concerned with one such alternative use. It will be shown how, by appropriate adaptations, the methods of linear programming may be used to obtain estimates of parameters when more usual methods, such as “least squares,” are difficult or impossible to apply.
Mathematical Programming of Portfolio Selections
Authors: Martin A. D.
Published: November 2008

The purpose of this paper is to analyze and explain, by reference to empirical data, some of the recent work done in this area by Dr. Harry Markowitz under the sponsorship of the Cowles Commission (Cowles Commission Discussion Papers in Economics Nos. 294, 2005, and 2019. Also, “Portfolio Selection,” Journal of Finance, March 1952.). This article is divided into four parts. Part I contains a heuristic introduction to the basic problem together with a mathematical statement of Markowitz's theory of portfolio selection and its basic assumptions. Part II contains a discussion of some of the problems involved in formulating probability beliefs for available investment opportunities. In Part III, the selection technique is demonstrated by application to a very simplified case, and many of the problems involved in more complex cases are brought out. The final section contains a summarization and critique of the theory, its limitations, and its possibilities as a guide to practical decision-making.
Linear Programming under Uncertainty
Authors: Dantzig George B.
Published: November 2008

The essential character of the general models under consideration is that activities are divided into two or more stages. The quantities of activities in the first stage are the only ones that are required to be determined; those in the second (or later) stages can not be determined in advance since they depend on the earlier stages and the random or uncertain demands which occur on or before the latter stage. It is important to note that the set of activities are assumed to be complete in the sense that, whatever be the choice of activities in the earlier stages (consistent with the restrictions applicable to their stage), there is a possible choice of activities in the latter stages. In other words it is not possible to get in a position where the programming problem admits of no solution.
The Impact of Certain Communication Nets Upon Organization and Performance in Task-Oriented Groups
Authors: Guetzkow Harold , Simon Herbert A.
Published: November 2008

Bavelas, Smith and Leavitt (Bavelas, A. 1950. Communication patterns in task-oriented groups. J. Acoustical Soc. Amer. 22 725–730.) have posed the problem: what effect do communication patterns have upon the operation of groups? To study this problem they designed a laboratory situation that is a prototype of those occurring in “natural” organizations existing in government and business. Each member of the group is given certain information. Their task is to assemble this information, use it to make a decision, and then issue orders based on the decision. This design provides a situation stripped of the complexities of large-scale social groups but retaining some essential characteristics of the organizational communication problem. In it we can examine how the communication net affects simultaneously (a) the development of the organization's internal structure, and (b) the group's performance of its operating task.
Economic Models for Industrial Waiting Line Problems
Authors: Hillier Frederick S.
Published: November 2008

Studies of industrial waiting line problems typically involve determining the proper balance between the amount of service and the amount of waiting for that service. This paper presents some basic results for the case where the study is to be based upon fundamental cost considerations and the assumption of an infinite calling population. Included are a number of economic models and accompanying procedures for determining the level of service which minimizes the total of the expected cost of service and the expected cost of waiting for that service.
Jobshop-Like Queueing Systems
Authors: Jackson James R.
Published: November 2008

The equilibrium joint probability distribution of queue lengths is obtained for a broad class of jobshop-like “networks of waiting lines,” where the mean arrival rate of customers depends almost arbitrarily upon the number already present, and the mean service rate at each service center depends almost arbitrarily upon the queue length there. This extension of the author's earlier work is motivated by the observation that real production systems are usually subject to influences which make for increased stability by tending, as the amount of work-in-process grows, to reduce the rate at which new work is injected or to increase the rate at which processing takes place.
An Expected Gain-Confidence Limit Criterion for Portfolio Selection
Authors: Baumol William J.
Published: November 2008

A new efficiency criterion is proposed for the Markowitz portfolio selection approach. It is shown that the use of standard deviation as a measure of risk in the original Markowitz analysis and elsewhere in economic theory is sometimes unreasonable. An Investment with a relatively high standard deviation (σ) will be relatively safe if its expected value (E) is sufficiently high. For the net result may be a high expected floor, E − Kσ, beneath the future value of the investment (where K is some constant). The revised efficient set is shown to eliminate paradoxical cases arising from the Markowitz calculation. It also simplifies the task left to the investor. For it yields a smaller efficient set (which is a subset of the Markowitz efficient set) and therefore reduces the range of alternatives from among which the investor must still select his portfolio. The proposed criterion may also be somewhat more easily understood by the nonprofessional.
The Acquisition of Experience in a Complex Management Game
Authors: Dill William R. , Doppelt Neil
Published: November 2008

This study was undertaken to evaluate a complex management simulation exercise as an environment for learning. The exercise was the Carnegie Tech Management Game; the players were students in a graduate management program who played the game. Players reported learning many kinds of things from their experience, but learning derived more from interpersonal interactions with other players and with outside groups like boards of directors than from interaction with the game model itself. Players may learn more about recognizing problems for future attention than about solutions of problems that can be applied in new situations. The kinds and amounts of learning vary with the length of game play, with team success or failure, and with individual job assignment on the team. They do not vary with measures of status on the team.
Some Observations on Adaptive Forecasting
Authors: Theil H. , Wage S.
Published: November 2008

The procedure of “adaptive” or “exponential” forecasting is based on weighted averages of two sources of evidence; one is the latest evidence (the most recent observation), the other the value computed one period before. As such, it is an easy, quick and cheap method; very little information is needed for a forecast; also, the most recent information is used.

This article serves a dual purpose. One is to simplify the forecasting procedure and to clarify its characteristics in the simplest possible manner. This objective is pursued in Sections 2–4. The second purpose is to formulate a probabilistic model underlying the prediction procedure and to select weights which minimize the mean-square prediction error. Sections 5 and 6 are devoted to that purpose.
On the Optimality of Adaptive Forecasting
Authors: Nerlove M. , Wage S.
Published: November 2008

The general procedure followed in the present paper is to show that, although the series generated by the Theil-Wage model [Theil, H., S. Wage. 1964. Some observations on adaptive forecasting. Management Sci. 10.] is nonstationary, there exists a simple transform of the series, in this case the second difference, which is stationary. This observation permits the Wiener-Hopf theory for stationary series to be applied to the transformed series. It is then shown that the results obtained by Theil and Wage are simply related to the optimal constant-parameter, linear predictors of the transformed series and thus that the adaptive forecasts are optimal in a rather wide sense. We believe, therefore, that the results of this paper illustrate a general approach to the prediction of non-stationary time series, and these are, after all, the type mainly encountered in economic or management problems. Thus the paper may have a somewhat wider significance than its title or primary purpose might suggest.
The Sizes of Simulation Samples Required to Compute Certain Inventory Characteristics with Stated Precision and Confidence
Authors: Geisler Murray A.
Published: November 2008

This study presents calculations of sample sizes, measured in number of simulated time periods, required to estimate certain parameters of selected inventory models with specified precision and confidence. In particular, the inventory models used include the classical zero procurement lead-time case, plus selected non-zero procurement lead-time cases having 2-, 5-, and 10-period lead-times. The parameters estimated are the mean number of shortages and of overages per time period, an overage being the amount of stock on hand at the end of the period, with negative amounts (or shortages) equated to zero.

The calculations presented include the number of time periods to be sampled to produce estimates of mean shortages and overages per time period within approximately 100 per cent of the true value, with 95-per-cent confidence. These calculations were done for the procurement lead-time models described above, using 100 different inventory policies with each model, as defined by selected stock-control levels and reorder points. The underlying demand distribution was assumed to be exponential.

From this brief study of sample sizes on comparatively simple inventory models, we find that over the range of conditions examined, the sample sizes required to estimate shortages per period and overages per period tend not to be excessive; that is, sample sizes of less than 100 are usually required to obtain the level of precision specified (a sample estimate within approximately 100 per cent of the true value) at a 95-per-cent confidence level.
On a Basic Class of Multi-Item Inventory Problems
Authors: Balintfy Joseph L.
Published: November 2008

The paper evaluates and compares classes of multi-item inventory problems, where joint order of several items may save a part of the setup cost. A cost ratio and simple decision rule are determined for joint versus individual orders in specified cases. The comparisons call for the necessity of a new policy for reorder point-triggered random output multi-item systems. This policy, the “random joint order policy,” operates through the determination of a reorder range within which several items can be ordered. The existence of an optimum reorder range is proved, and a computational technique is demonstrated with the help of a machine-interference type queueing model. Under favorable conditions the results exhibited on the diagram of optimum reorder ranges are generally applicable. The random joint order policy model is especially suitable for computer controlled inventory systems.
Preventive Maintenance Scheduling by Mathematical Programming
Authors: Wagner Harvey M. , Giglio Richard J. , Glaser R. George
Published: November 2008

This paper explores methods for scheduling preventive maintenance by means of mathematical programming. Five integer linear programming models are posed, each based on a different optimality criterion dealing with manpower smoothing. By means of two hypothetical examples the models are tested for their computational properties. In addition to describing the experimental results of applying integer linear programming techniques to this class of problems, the paper also illustrates how effectively rounded linear programming solutions can be used as approximations to optimal solutions.
A Method for Allocating Funds to Investment Projects when Returns are Subject to Uncertainty
Authors: Cord Joel
Published: November 2008

A method is developed for optimally selecting capital investments with uncertain returns, under conditions of limited funds and a constraint on the maximum average variance allowed in the final investment package. The concepts involved in the analysis are somewhat related to Markowitz's work on the portfolio problem. Dynamic programming is used to compute solutions.
Allocation of Screening Inspection Effort—A Dynamic-Programming Approach
Authors: Lindsay Glenn F. , Bishop Albert B.
Published: November 2008

A general screening inspection program is developed in which inspection levels and the locations of inspection points are treated as variables. It is shown that the function representing the total of inspection and scrap costs will be minimized by an extreme-point solution, thus the minimum-cost inspection program will lie in a relatively restricted subset of all possible allocations. Application of a computational procedure based on dynamic-programming allows the minimum-cost program to be readily determined for instances in which the requirement for inspection is the maintenance of a specified quality level or when a linear cost may be associated with outgoing defective material.
Control in Large Organizations
Authors: Arrow Kenneth J.
Published: November 2008

The problem of control is defined as that of choosing operating rules for members of an organization and enforcement rules for the operating rules so to maximize the organization's objective function. The control problem is sketched for three characteristic types of large organizations: large corporations, governments in their budgetary aspects, and economic systems as a whole. The essential roles of uncertainty and of differential amounts of information in different parts of an organization in the problem of control are brought out. The merits and drawbacks of the price system as a control mechanism are discussed in light of the preceding discussion, with especial reference to the effects of uncertainty.
The Dynamic Inventory Problem with Unknown Demand Distribution
Authors: Iglehart Donald L.
Published: November 2008

In this paper we consider the dynamic inventory problem in which the demand distribution possesses a density belonging to either the exponential or range family of densities and having an unknown parameter. An a priori density is chosen for the unknown parameter. Using a Bayesian estimation scheme, inequalities are obtained for the optimal purchase policies as the amount of demand information varies. In addition, asymptotic expansions for the optimal policies are found as the number of observations of the demand becomes large. This paper extends the results of Scarf, [8].
Production Planning with Convex Costs: A Parametric Study
Authors: Veinott Arthur F.
Published: November 2008

We consider the problem of choosing the amounts of a single product to produce in each of a finite number of time periods so as to minimize the (convex) production and (convex) inventory carrying costs over the periods while satisfying known requirements. The effect of changes in the various parameters, viz., the requirements and the production and inventory capacity limits, upon the optimal production levels is studied. The results obtained are exploited to provide simple and intuitive computational procedures for finding optimal production schedules for a range of parameter values.
Some Generalizations of an Inventory Planning Horizon Theorem
Authors: Zabel Edward
Published: November 2008

This study extends the results of a paper on inventory models by H. M. Wagner and T. M. Whitin. Particular attention is given to the usefulness of planning horizon theorems in simplifying computations.
An Algebra for the Analysis of Generalized Activity Networks
Authors: Elmaghraby Salah E.
Published: November 2008

This paper generalizes the approach of activity networks, exemplified by PERT and CPM, to networks in which activites and events occur probabilistically and contain logical relationships of a more complicated nature. For example, from a specific event some activities are undertaken with certainty while others probabilistically. It presents an algebra of analysis taking the decision rules or logical structure of the system as given. The approach is applicable to the analysis of practical situations such as contract bidding, flow in shops, etc.
Computational Algorithm for the Sequential Unconstrained Minimization Technique for Nonlinear Programming
Authors: Fiacco Anthony V. , McCormick Garth P.
Published: November 2008

In a previous article [Fiacco, A. V., G. P. McCormick. 1964. The sequential unconstrained minimization technique for nonlinear programming, a primal-dual method. Management Sci. 10(2) 360–366.] the authors gave the theoretical validation of the sequential unconstrained minimization technique for solving the convex programming problem. The technique is based on an idea proposed by C. W. Carroll [Carroll, C. W. 1961. The created response surface technique for optimizing nonlinear restrained systems. Oper. Res. 9(2) 169–184; Carroll, C. W. 1959. An operations research approach to the economic optimization of a Kraft Pulping Process. Doctoral dissertation, The Institute of Paper Chemistry, Appleton, Wisc.]. The method has been implemented via an algorithm based on a second-order gradient technique that has proved extremely efficient on a considerable number of test problems of varying complexity. This paper explores the computational aspects of the method. Included are discussions of parameter selection, convergence criteria, and methods of minimizing an unconstrained function. It is shown that the problem variables, on the trajectory of minima of the sequence of unconstrained functions, can be developed as functions of a single parameter. This provides the theoretical basis for an extrapolation technique that significantly accelerates convergence in actual computations. The detailed computer solution of a small example is given to illustrate the typical convergence characteristics of the method. The speed and accuracy of the computational procedure are believed to be competitive with other known techniques for solving the convex programming problem.
A Theory of Market Behavior After Innovation
Authors: Haines George H.
Published: November 2008

This paper is a report of a study of innovation of consumer nondurable products. A simple hypothesis about consumer behavior in short run, non-equilibrium situations is presented. Following classical economic methodology, the behavior of individuals is then aggregated. This aggregate equation form is tested and shown to be not rejected by the data. The effect of marketing actions of the firm upon consumer behavior is also explored.
Development and Application of a Model for Suppression of Forest Fires
Authors: Parks George M.
Published: November 2008

A deterministic model is suggested to describe the spread of free-burning wildland fires and the effect of various types of suppression activity thereon. The costs caused by fire are described and optimal levels of suppression forces are derived with the objective of minimizing the total costs of suppression plus fire damage. Costs incurred under optimal manning policies as given by the model are compared with the historical costs incurred on actual forest fires under present manning plans. Results indicate that significant dollar savings can be achieved in total fire caused costs by considerably increasing the size of fire suppression organizations.
The Past, Present, and Future of General Simulation Languages
Authors: Krasnow Howard S. , Merikallio Reino A.
Published: November 2008

The widespread use of simulation in the design and analysis of complex systems has received a great impetus in the past few years with the advent of various general simulation languages. Simulation models of a wide variety of physical situations can now be developed with these languages. This paper summarizes and compares various characteristics of five major general simulation languages. The historical background from which these languages developed is discussed first. Predictions are also made on the future development of general simulation languages.
On Scheduling Problems with Deferral Costs
Authors: Lawler Eugene L.
Published: November 2008

A class of scheduling problems involving deferral costs has been formulated by McNaughton, who has described a simple method of solution for the linear, single-processor case. In this report dynamic programming and linear programming techniques are applied to nonlinear and multiple-processor problems. A dynamic programming solution of the nonlinear, single processor problem is possible, provided the number of jobs is small. Transportation methods of linear programming can be used to solve large nonlinear, multiple-processor problems, provided the processing times for the jobs are equal. Approximate and/or partial solutions are possible for other cases.
An Algorithm for the Line Balancing Problem
Authors: Gutjahr Allan L. , Nemhauser George L.
Published: November 2008

An algorithm, based on finding a shortest route in a finite directed network, is given for the assembly line balancing problem. Arc lengths are such that it is sufficient to find any path from the origin to destination node containing a minimal number of arcs. Computational results are presented and the algorithm is compared with prior analytical methods of line balancing.
Some Stochastic Inventory Models for Rental Situations
Authors: Tainiter M.
Published: November 2008

Some stochastic models are analyzed which describe the time fluctuations of the inventory levels of companies which are in the rental business. The stochastic process which describes the fluctuations is shown to be applicable to a wide variety of physical situations. Examples are given, and analyses are made of several types of profit functions which are applicable to rental situations.
Measuring Risk on Consumer Instalment Credit
Authors: Smith Paul F.
Published: November 2008

The advantages of statistical measures for grading credit risks in lending to consumers have been widely recognized but relatively little use has been made of such systems. The paper develops a relatively simple statistical method for measuring risk on individual accounts that can also be used for measuring and controlling portfolio quality and for estimating loss rates. The procedure entails four steps: Comparison of good and bad accounts in the search for characteristics that are associated with bad accounts; Calculation of bad account probabilities for discriminating characteristics; Development of a risk index from bad account probabilities to be used in grading accounts; Evaluation of the risk index.

A test of the Method the accounts of a commercial bank is described and the judgements implied by the risk index are compared to the criteria used by interviewers in rejecting applicants. A great many similarities are found between the results of the two methods but a number of striking dissimilarities are observed.

The last section of the paper illustrates the ways in which the risk index can be used to adjust credit quality to the desired volume and loss experience. It also demonstrates its use in measuring portfolio quality and in estimating loss rates.
Portfolio Analysis in a Stable Paretian Market
Authors: Fama Eugene F.
Published: November 2008

Recently evidence has come forth which suggests that empirical probability distributions of returns on securities conform better to stable Paretian distributions with infinite variances than to the normal distribution. Using a generalized form of a technique proposed by Sharpe [17] in a recent issue of this journal, this article develops a portfolio analysis model for a stable Paretian market. The article also shows the range of conditions under which diversification is a meaningful economic activity, even though probability distributions of returns on individual securities have infinite variances.
Sequencing Operations to Minimize In-Process Inventory Costs
Authors: Gapp William , Mankekar P. S. , Mitten L. G.
Published: November 2008

A solution is presented for the problem of determining the sequence in which a set of manufacturing operations should be carried out in order to minimize in-process inventory costs while meeting a variety of technological constraints. Both strict precedence constraints and contiguity constraints are considered, the latter dealing with the requirement that certain sets of operations be performed contiguously (but without specification of any order).
Automated Information Systems in Planning, Control and Command
Authors: Vazsonyi Andrew
Published: November 2008

The role, nature, status and future of Information Systems. Objectives and approach of paper. Illustrations of problems for automation. On-Line-Real-Time Information Systems. Control of space travel. Control of airline reservations. Military Command and Control. Planning and Control of Research and Development. Where computers excel. Where men excel. How man works. Heuristic problem solving. Man-machine communications consoles. Solution of ordinary differential equations. Computer aided engineering design. Solution of partial differential and integral equations. Automated Program Evaluation and Review Technique (PERT). Automated Teaching of Languages. Approach for automation. Conclusions.
The Researcher and The Manager: A Dialectic of Implementation
Authors: Churchman C. W. , Schainblatt A. H.
Published: November 2008

The purpose of this paper is to review various opinions and differences of opinion which have been expressed concerning that aspect of research referred to as “implementation.” We have used the term “implementation” to refer to the manner in which the results of scientific effort may come to be used by the manager. The “problem of implementation” is the problem of determining what activities of the scientist and the manager are most appropriate to bring about an effective relationship between the two.
Roadblocks to Progress in the Management Sciences and Operations Research
Authors: Rader Louis T.
Published: November 2008

Management scientists and operations research people have contributed heavily to the rationalization of operations and decision making in the General Electric Company. One TIMS member in 20 is employed by the Company. We have about 50 management information systems consultants in our Internal Automation Operation, over a hundred more working on aspects of management science at the Corporate level, and well over a thousand in the Company's operating departments.

In addition, nearly 200 General Electric managers are currently attending a course in management and management science at our Management Institute in Crotonville, and in three months they will be replaced by another group. There are also some 2000 financial employees who are now in the middle of a 40-session study of mathematics, statistical inference, model building and econometrics. So General Electric is drawing heavily on the collective research of TIMS and ORSA members.
Maintenance Policies for Stochastically Failing Equipment: A Survey
Authors: McCall John J.
Published: November 2008

This paper is a survey of scheduling policies for stochastically failing equipment. The development of these policies has relied on a variety of mathematical techniques. This reliance together with the diversity of the applications has sometimes obscured the underlying structure that is common to all these policies. The primary purpose of this survey is to identify this common structure and thereby clarify the relationships existing among the various maintenance policies. With this clarification in mind, it is hoped that the survey will provide a convenient introduction to the problems of scheduling maintenance for equipment subject to stochastic failure.

The second purpose of the paper is to identify both the boundary separating scheduling problems that have been solved from interesting scheduling problems awaiting solution and the boundary separating theoretical solutions already available from applications of these solutions to practical problems. The progress of future theoretical and applied research in this field will be affected by the present positions of these boundaries. Even a crude measurement of these positions should enable us to predict the direction of future research.
Computing Optimal (s, S) Inventory Policies
Authors: Veinott Arthur F. , Wagner Harvey M.
Published: November 2008

A complete computational approach for finding optimal (s, S) inventory policies is developed. The method is an efficient and unified approach for all values of the model parameters, including a non-negative set-up cost, a discount factor 0 ≦ α ≦ 1, and a lead time. The method is derived from renewal theory and stationary analysis, generalized to permit the unit interval range of values for α. Careful attention is given to the problem associated with specifying a starting condition (when α < 1); a resolution is found that guarantees an (s, S) policy optimal for all starting conditions is produced by the computations. New upper and lower bounds on the optimal values of both s and S are established. The special case of linear holding and penalty costs is treated in detail. In the final section, a model in which there is a minimum guaranteed demand in each period is studied, and a simplified method of solution is developed.
A General Purpose Forecast Simulator
Authors: Gross Donald , Ray Jack L.
Published: November 2008

A simulator is developed which enables a variety of forecasting procedures to be tested on any given time series. The simulator determines the standard deviation of the forecast error for each of the procedures tried, indicates the procedure which is optimal in the sense of lowest standard deviation of forecast error, and presents projections and graphs of actual versus predicted values. The time series under study can be either a real time series read into the simulator or a time series generated by the simulator.
An Empirical Study of Exactly and Approximately Optimal Inventory Policies
Authors: Wagner Harvey M. , O'Hagan Michael , Lundh Bertil
Published: November 2008

The (s, S) inventory model (infinite horizon with stationary parameters) is explored with a view toward determining the dependency of the optimal policy on the model's parameters and toward evaluating the effectiveness of several numerical approximation methods for obtaining nearly optimal policies. The mode of attack is empirical: We compare the results for 828 cases, which encompass several values for each of the economic parameters, three delivery lags, and three distinct demand probability distributions with varying parameter values. We demonstrate for these cases that close to optimal results can be obtained by applying the Fibonacci search procedure, by using a particular asymptotic approximation, as well as by substituting a certain policy not of the (s, S) form.
Communications to the Editor—The Problem of Dependability of a Complex System Having Two Types of Components
Authors: Wasan R. K.
Published: November 2008

In this communication, the MATHEMATICAL investigations have been carried out to study the behaviour of a complex system having two types of components with regard to dependability. The principal results of this paper are the Laplace transforms of the probabilities that the system ia operating under “normal efficiency,” “reduced efficiency” and is in the “failed and under repair” state. Results in particular cases have been deduced. The inclusion of supplementary variable technique [2 and 6] has been employed to obtain the solution.
Some Operations Research Applications in the Conservation of Wildland Resources
Authors: Broido A. , McConnen R. J. , O'Regan W. G.
Published: November 2008

This paper was written to indicate some of the limited O.R. work done on wildland problems and to call attention to the ever-increasing opportunity for more effort. The first example presents a beginning approach to the problem of minimizing wildland fire costs—one which shows that a sizable increase in prevention and presuppression activities can lead to considerable savings if total costs include fire losses. The second example challenges the commonly used strategy of insect pest control—in large part because of the non-Markovian nature of the problem. The third example deals with the application of linear programming to the problem of managing a wildland area as a continuing source of one or more products or services. Finally, two examples of simulation techniques—applied to forest management and forest sampling—are described briefly.
Errata
Authors: Weiss Herbert K.
Published: November 2008

Errata to Weiss, H. K. 1965. Some growth considerations of research and development and the national economy. Management Sci. 11 (3, January) 368–394.
Optimal Short Term Financing Decision
Authors: Robichek A. A. , Teichroew D. , Jones J. M.
Published: November 2008

The cash requirements of many firms follow a seasonal pattern. These firms may obtain short term cash to cover their seasonal needs from a variety of sources: e.g., lines of credit, delaying of accounts payable, term loans, pledging or factoring receivables, etc. Each of these alternative sources of cash may have different costs as well as special restrictions.

Given the set of cash requirements and the costs and constraints relating to alternative sources of cash, it is often difficult to determine the optimum manner of meeting the short-term cash needs. In this paper, this short-term financing problem under certainty is formulated as a mathematical model and solved through the use of a general linear programming routine. Optimum solutions are determined for a number of cases and the general form of the solution is discussed. The paper includes an analysis based on marginal costs and a discussion of the short-term financing problem under uncertainty.
On Representations of Semi-Infinite Programs which Have No Duality Gaps
Authors: Charnes A. , Cooper W. W. , Kortanek K.
Published: November 2008

Duality gaps which may occur in semi-infinite programs are shown to be interpretable as a phenomenon of an improper representation of the constraint set, uTPi ≧ ci, i ε I. Thus, any semi-infinite system of linear inequalities has a canonically closed equivalent (with interior points) which has no duality gap. With respect to the original system of inequalities, duality gaps may be closed by adjoining additional linear inequalities to the original system. Also, for consistent, but not necessarily canonically closed programs, a partial regularization of original data removes duality gaps that may occur. In contrast, a new “weakly consistent” duality theorem without duality gap may have a value determined by an inequality which is strictly redundant with respect to the constraint set defined by the total inequality system.
Communications to the Editor—A Note on “Decomposition of Project Networks”
Authors: Blanning Robert W. , Rao Ambar G.
Published: November 2008

In their paper Management Science, Vol. 11, No. 3, January 1965, pp. 444–459), S. C. Parikh and W. S. Jewell discuss the decomposition of cost-time project networks into subnetworks to aid in finding a cost function for the entire project. They suggest that each subproject be replaced by a set of fictitious activities (in series or in parallel) and that a subsequent analysis be performed using network flow theory. However, when the network configuration is such that series and parallel subprojects can be successively joined to give one project, a simpler method is available, which we wish to present here.
Constrained Generalized Medians and Hypermedians as Deterministic Equivalents for Two-Stage Linear Programs under Uncertainty
Authors: Charnes A. , Cooper W. W. , Thompson G. L.
Published: November 2008

In linear programming under uncertainty the two-stage problem is handled by assuming that one chooses a first set of constrained decision variables; this is followed by observations of certain random variables after which another set of decisions must be made to adjust for any constraint violations. The objective is to optimize an expected value functional defined relative to the indicated choices.

This paper shows how such problems may always be replaced with either constrained generalized medians or hypermedians in which all random elements appear only in the functional. The resulting problem is called a deterministic equivalent for the original problem since (a) the originally defined objective replaces all random variables by corresponding expected values and (b) the remaining constraints do not contain any random terms. Significant classes of cases are singled out and special attention is devoted to the structure of the constraint matrices for these purposes. Numerical examples are supplied and related to the previous literature.

Other properties of these models are also examined and related to types of problems which are often of interest. For instance the hypermedian and generalized median formulations involve minimizations over absolute value terms in the functional. These, in turn, are developed for their possible pertinence in problems where minimizations are to be over the maximum of a set of functions under inequality constraints. Utilizing Moore-Penrose (generalized) inverses, other characterizations are also secured in which all relevant weights and coefficients are stated explicitly in terms of original data.
Simulating with SIMSCRIPT
Authors: Markowitz Harry M.
Published: November 2008

The SIMSCRIPT programming system is especially designed to facilitate the writing of simulation programs. Digital simulations generally consist of a numerical description of “status,” which is modified at various points in simulated time called “events.” SIMSCRIPT simulations consist primarily of a collection of “event routines” written by the user describing how different kinds of events in a particular simulated world affect current status and cause future events. Status is described in terms of various “entities,” “attributes,” and “sets” as specified by the user.
A Method of Unifying Multiple Objective Functions
Authors: Briskin Lawrence E.
Published: November 2008

In certain problem areas it is not possible to establish one objective function. There may be several, sometimes conflicting, goals. This paper presents a method of reconciling such conflicting goals by establishing a global objective function. A combinatorial example is given and solved by “modified” dynamic programming.
Financial Regulation as a Control System Problem: The Case of the Savings & Loan Industry
Authors: Balderston F. E.
Published: November 2008

Operations and regulation of the savings and loan industry are evaluated in terms of four subsystems: (1) market structure, in which the market environment and the policies of the individual firm are important determinants, but in which, the regulatory authorities have licensing power with respect to the number of firms and branch offices; (2) transactions, which divides into transactions in the capital inflow, or savings, market, and in the capital placement, or lending, market; (3) liquidity, in which the firm's cash flows and liquidity requirements are augmented by the Federal Home Loan Bank system; and (4) safety, in which, the strength of the housing market, the portfolio and reserve position of tie individual institution, and insurance of accounts by the FSLIC are determining factors. The paper discusses the interplay between environment, executive decision and regulatory influence in each of these subsystems and also points to interactions between the subsystems.
The Status of Mathematical Inventory Theory
Authors: Veinott Arthur F.
Published: November 2008

This paper surveys the current status of mathematical inventory theory. The review is limited to studies which seek optimal policies for dynamic inventory models. Models with certain and uncertain demands are discussed. Particular attention is focused on multi-item and/or multi-echelon inventory systems.
The Priority Problem and Computer Time Sharing
Authors: Greenberger Martin
Published: November 2008

Priority decisions arise whenever limited facilities must be apportioned among competitive demands for service. Broadly viewed, even the familiar first-come-first-served discipline is a priority rule. It favors the longest-waiting user, and guards against excessive delays. Other priority rules, such as shortest-job-next, are keyed instead to considerations of operating efficiency. Urgency of request is still another common consideration. Since these considerations often conflict, the priority rule serves as mediator. Use of a common coat measure can help effect this mediation, as results from recent job-shop simulations illustrate.

A priority operation of contemporary interest is scheduling a time-shared computer among its concurrent users. Service requirements are not known in advance of execution. To keep response times short for small requests, service intervals are partitioned and segments are served separately in round-robin fashion. A mathematical analysis pinpoints the tradeoff between overhead and discrimination implicit in this procedure, and allows alternate strategies to be costed. Extensions of the simple round-robin procedure are suggested, the objectives of time sharing are reviewed, and implications are drawn for the design of future priority and pricing systems.
Correction to “(s − 1, s) Inventory Policy Under Compound Poisson Demand”
Authors: Feeney George J. , Sherbrooke Craig C.
Published: November 2008

Correction to the article Feeney, G. J., C. C. Sherbrooke. 1966. (s − 1, s) Inventory policy under compound poisson demand. Management Sci. 12(5, January) 391–411.
Long Range Planning in Mental Health
Authors: Hunter Robert J. , Schnee Jerome E.
Published: November 2008

As a result of federal mental health grants-in-aid of 4.2 million dollars to support comprehensive mental health planning in the states, Pennsylvania initiated the development of a Comprehensive Mental Health Plan in mid-1963. This comprehensive plan concerns itself with the development of short and long range goals for a mental health program concerned with the needs of all the citizens of the state.

One major phase of the comprehensive plan involves the analysis of future health requirements and the resources which will satisfy these needs. Smith, Kline and French Labs offered the assistance of its Management Research personnel to the Comprehensive Mental Health Planning Committee in this stage of the planning process. Specifically, we agreed to examine the problems associated with locating new Outpatient Psychiatric Clinics.
Optimal Depreciation Strategies for Income Tax Purposes
Authors: Schoomer B. Alva
Published: November 2008

Among the items on a corporate income statement, depreciation and amortization are unique in that while they are legitimate expenses, and therefore deductible for tax purposes, they are non-cash items. Thus, the tax savings which result from reporting depreciation may be retained by the company for investment. If the funds thus generated can be invested profitably, a substantial increase in corporate profitability can result. Typically, this component of the total cash flow of an industrial corporation is two or three times as large as retained corporate earnings.

A number of methods for computing depreciation allowances are permitted by law. In addition, switching from one method to another is possible under certain circumstances. The particular method of depreciation which is optimal under a particular set of conditions depends in part upon, the rate of return which the invested funds can yield.

It is the purpose of this paper to derive decision rules which select from among the various depreciation alternatives that method which is optimal in a given situation.
Commentary
Authors: Evan William M.
Published: November 2008

Comments about Churchman, C. W., A. H. Schainblatt. 1965. The researcher and the manager: A dialectic of implementation. Management Sci. 11 (4) B-69–B-87.