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A simple linear model is constructed for production, use and recycling of various paper and related products. This model is used to estimate the maximum feasible recycling rate given the current state of pulp and paper technology. Parametric linear programming is used to investigate the effect of the efficiency of collecting, sorting and transporting waste paper on the fraction recycled. [ABSTRACT FROM AUTHOR]

The normative solution concepts of game theory try to provide a clear mathematical characterization of what it means to act rationally in a game where all players expect each other to act rationally. Kadane and Larkey reject the use of these normative solution concepts. Yet, this amounts to throwing away an important piece of information to the effect that the players are rational and expect each other to be rational. Even in situations where the players do not expect each other to act with complete rationality, normative game theory can help them heuristically to formulate reasonable expectations about the other players' behavior. [ABSTRACT FROM AUTHOR]

The article comments on the article "Determination Of Warranty Reserves: An Extension," by H. N. Amato and E. E. Anderson, which extends study on the author's original article "Determination Of Warranty Reserves," featured in the June 1969 issue. The author expresses pleasure in the extension of his work and agrees with Amato and Anderson's paper. However, he feels that some cautiousness must be taken by the potential user. Several cause and effect situations, with regard to the value of the variables in the equation, are examined to show how they might not lead to consistent or positive results.

The article presents comments on the management science paper "On Sequencing n Jobs on One Machine to Minimize the Number of Late Jobs," by William L. Maxwell. The paper focused on an integer programming formulation of a one-machine job shop problem. The author contends that Maxwell made in error in proving the validity of an optimal algorithm by applying cutting plane constraints to the problem. The author explains that the problem cannot be solved through traditional cutting plane procedures. The author provides a mathematical model in an attempt to correct the proof.

Competition for the 2017 Daniel H. Wagner Prize for Excellence in Operations Research Practice provided the six finalist papers featured in this special issue of Interfaces. The prestigious Wagner Prize—awarded for achievement in implemented operations research, management science, and advanced analytics—emphasizes quality and originality of mathematical models and clarity of written and oral exposition. Researchers from Lehigh University, in collaboration with the Pennsylvania Department of Corrections, won the competition for their development of a novel hierarchical, multiobjective mixed-integer linear optimization model, which assigns inmates to correctional institutions and schedules their programs, while considering all legal restrictions and best-practice constraints. This successful project opens a rich and untouched area for the application of operations research. The new model and methodology can be utilized for the assignment of inmates in any correctional system. The remaining papers describe work on audience targeting for television advertising, optimizing railroad crew assignments, applying machine-learning models to healthcare and criminal justice, personalized treatment design for managing diabetes, and optimization in bulk tanker transport operations. Full presentation videos with slides are available in the INFORMS Video Library at https://www.informs.org/Resource-Center/Video-Library, and as electronic companions to the Interfaces articles. [ABSTRACT FROM AUTHOR]

The paper that I authored and that was published in Management Science in 1969 (Bass 1969) has become widely known as the "Bass Model" (see Morrison and Raju 2004). The model of the diffusion of new products and technologies developed in the paper is one of the most widely applied models in management science. It was especially gratifying for me to learn that INFORMS members have voted the "Bass Model" paper as one of the Top 10 Most Influential Papers published in the 50-year history of Management Science in connection with the 50th anniversary of the journal. In this commentary on the paper I shall discuss some background and history of the development of the paper, the reasons why the model has been influential, some important extensions of the model, some examples of applications, and some examples of the frontiers of research involving the Bass Model. In the current period, in which there is much discussion about the marketing of applications of management science methods and practice, I hope that this commentary will be useful in providing insights about some of the properties of models that will be applied. [ABSTRACT FROM AUTHOR]

Stiving (2000) proposes an interesting model to explain price-endings. His analysis shows that even when customer demand increases at 9-ending price points, certain firms that use high prices to signal quality are more likely to set those prices at round numbers. This comment raises two issues about the model. First, it appears that the original paper imposes a condition that has the effect of eliminating a broad range of legitimate separating equilibria from the analyses. Second, it appears that the original model does not include constraints to ensure that the demand for each market segment will be nonnegative. When these constraints on demand are included, one obtains different aggregate demand curves, which leads to different equilibrium prices. Using the revised model and analysis, we find that 71% of the prices end in 9 and only 12% in 0. This contrasts with only 3% ending in 9 and 58% ending in 0 for the original study. Therefore, 9-endings still prevail even though high prices can be used by firms to signal high quality. [ABSTRACT FROM AUTHOR]

In their paper, "Economic Models for R&D Project Selection in the Presence of Project Interactions," Fox, Baker and Bryant (1984) proposed a model that included benefit interactions, called present value (PV) interactions, between R&D projects. Several computational errors in this paper invalidated the illustrative example which sought to demonstrate that ignoring the PV interactions could result in both nonoptimal project selections and resource allocations. However, a single correction yields an example that supports the authors' central premise. Furthermore, we believe that the model itself can prove useful in real applications. [ABSTRACT FROM AUTHOR]

Many methods have been developed to determine the proper reorder points and order quantities in an inventory system. These methods are based on a wide range of inventory models—from elementary deterministic models to sophisticated probabilistic models with time-varying parameters. This paper deals with two topics related to these calculations which were encountered during the design of an inventory control system for a firm in the heavy goods industry. A mathematical model is developed to describe the average annual variable cost of maintaining the inventory. Based on this model, the paper evaluates the savings obtained by using a simultaneous solution for reorder point and order quantity rather than a simpler separate solution. Then, this model is extended to describe the effect of batch withdrawals as a renewal process. The paper presents an adjustment which can be applied to the original reorder points based on unit withdrawals. Both of these topics are described in the context of a practical application. [ABSTRACT FROM AUTHOR]

This paper develops a parsimonious process-level theory that connects organizational structure to exploration and exploitation. Toward this end, it develops a mathematical model of organizational decision making that combines an information processing approach in the spirit of Sah and Stiglitz [Sah RK, Stiglitz JE (1986) The architecture of economic systems: Hierarchies and polyarchies. Amer . Econom. Rev. 76(4):716-727] with elements from signal detection theory. The model is first used to explore a "design space" of organizations and identify trade-offs and dominance relationships among alternative organization designs. The paper then studies open questions in the organization design literature, such as the extent to which exploration and exploitation can be produced by one organization and what is the effect of organization size on exploration. More broadly, this research speaks to calls for the introduction of more process-level explanations in the organizations literature. The paper concludes with testable hypotheses and managerially relevant insights. [ABSTRACT FROM AUTHOR]

Managerial models for practice have undergone remarkable growth in the past 50 years. My paper on decision calculus, published in 1970, was both a progress report and a prescription for improvement. This commentary describes why I wrote the paper, my perception of why it has been considered influential, and a brief overview of what has happened since. The overview starts by tracing the trends and ideas of the 1960s into the 1970s. The 1970s blend easily into the era of decision support systems (DSS). Starting late in the decade and still continuing, DSSs have evolved rapidly due to an explosion of data, increased computer power, and advances in modeling methods. I review highlights of this evolution from the point of view of managerial models, giving special emphasis to marketing, since that has been my window on this world. The good news is that more managers than ever are using models. The bad news is that many managers do not even realize they are using models! (But we should ask whether this is really bad.) The commentary concludes with thoughts about the future of managerial models. The selection of my paper as one of the most influential in the first 50 years of Management Science was a significant honor for which I am grateful. I take it as an indication by the members of INFORMS of the importance to our field of the issues addressed. [ABSTRACT FROM AUTHOR]

There has been recent debate about whether prospect theory can explain the disposition effect. Using both theory and simulation, this paper shows that prospect theory often predicts the disposition effect when lagged expected final wealth is the reference point under the principle of preferred personal equilibrium, regardless of whether the reference point is updated or not. When initial wealth is the reference point, however, there is often no disposition effect. Models that use a reference point with no lag under the principle of preferred personal equilibrium or that determine the reference point using the principle of disappointment aversion cannot explain why the investor bought a stock in the first place. Reference point adjustment weakens the disposition effect, leads to more aggressive initial stock purchase strategies, and predicts history dependence in stock holding. [ABSTRACT FROM AUTHOR]

In this paper, we study the relationship between several well known classes of discrete choice models, i.e., the random utility model (RUM), the representative agent model (RAM), and the semiparametric choice model (SCM). Using a welfare-based model as an intermediate, we show that the RAM and the SCM are equivalent. Furthermore, we show that both models as well as the welfare-based model strictly subsume the RUM when there are three or more alternatives, while the four are equivalent when there are only two alternatives. Thus, this paper presents a complete picture of the relationship between these choice models. [ABSTRACT FROM AUTHOR]

Competition for the 2013 Daniel H. Wagner Prize for Excellence in Operations Research Practice provided the six finalist papers featured in this special issue of Interfaces. The prestigious Wagner Prize--awarded for achievement in implemented operations research and advanced analytics--emphasizes quality and originality of mathematical models and clarity of written and oral exposition. Researchers from MIT, Technion--its Israeli counterpart--and the client organization won the competition for the design and successful implementation of a novel two-phase distribution algorithm, which greatly reduces the cost of delivering print magazines for Yedioth Group, the largest media company in Israel. The impressive hospital emergency department work of the team from Georgia Tech and the Grady Health System garnered a unique second-place-winner award. The remaining finalist papers describe work in optimization of the desk customer services staff for an Italian utility company, logistics optimization for an automotive parts manufacturer, efficient management of pressure in a water distribution network, and improved scheduling for the German Basketball League. [ABSTRACT FROM AUTHOR]

The article presents the author's comments about the article "Supply, Shortage, and Service Reliability Decisions by Gas Distribution Utilities: A Chance-Constrained Approach," by Jean-Michel Guildmann. The author focuses on the cost effectiveness associated with Guildmann's mathematical model. It is suggested that management scientists consider the applications of Guildmann's mathematical optimization problem when faced with critical decisions regarding the future of the gas market. The author proposes that the analytical framework proposed by Guildman may be useful when making decisions regarding industrial capacity.

Competition for the 2015 Daniel H. Wagner Prize for Excellence in Operations Research Practice provided the five finalist papers featured in this special issue of Interfaces. The prestigious Wagner Prize-awarded for achievement in implemented operations research, management science, and advanced analytics-emphasizes quality and originality of mathematical models and clarity of written and oral exposition. Researchers from Georgia Institute of Technology, Emory University, the University of São Paulo, and a major client organization-Centers for Disease Control and Prevention-won the competition for their invention and successful laboratory testing of original methods that will guide the rapid development of better vaccines to protect against pandemic-causing viruses. The remaining finalist papers describe work to improve repair and maintenance of railroad locomotives, testing of new-model automotive vehicles, location of products on shelves in supermarket stores, and organization of a national postal service. [ABSTRACT FROM AUTHOR]

High-low bidding refers to auctions of a series of objects where for a subset of the auctioned objects one of two buyers bids high on some objects and low on others while the other buyer does the reverse. This paper shows that high-low bidding does not imply collusive behavior among buyers. In particular, through a formal modeling of a noncooperative game of information acquisition and bidding decisions, it shows that high-low bidding can be obtained. The paper also demonstrates that if the cost of information to a seller is less than the equilibrium joint expected information cost of the buyers, then it pays the seller to provide public information. Finally, if the provision of public information is not feasible but a seller can know whether buyers have acquired information, then it pays the seller to make known to the buyers and to pursue a policy that just prior to the start of an auction the seller will announce which buyer has acquired information. [ABSTRACT FROM AUTHOR]

Stochastic vehicle routing, which deals with routing problems in which some of the key problem parameters are not known with certainty, has been an active, but fairly small research area for almost 50 years. However, over the past 15 years we have witnessed a steady increase in the number of papers targeting stochastic versions of the vehicle routing problem (VRP). This increase may be explained by the larger amount of data available to better analyze and understand various stochastic phenomena at hand, coupled with methodological advances that have yielded solution tools capable of handling some of the computational challenges involved in such problems. In this paper, we first briefly sketch the state-of-the-art in stochastic vehicle routing by examining the main classes of stochastic VRPs (problems with stochastic demands, with stochastic customers, and with stochastic travel or service times), the modeling paradigms that have been used to formulate them, and existing exact and approximate solution methods that have been proposed to tackle them. We then identify and discuss two groups of critical issues and challenges that need to be addressed to advance research in this area. These revolve around the expression of stochastic phenomena and the development of new recourse strategies. Based on this discussion, we conclude the paper by proposing a number of promising research directions. [ABSTRACT FROM AUTHOR]

Copula models are becoming increasingly popular in engineering and financial applications. They provide a flexible way of constructing joint distributions with arbitrary one-dimensional margins and a wide variety of dependence structures. This paper studies different types of conditionalization of copula-based models. We conditionalize these models in the usual way on point values but also propose a different type of conditionalization on a new margin. This new type of conditionalization is motivated by experience with a model built for application in modeling risk in civil aviation. Changing one margin in a copula model is very easy; however, it is not equivalent to conditionalizing on a new margin. For this purpose, the technique presented by Holland and Wang [Holland PW, Wang YJ (1987) Dependence function for continuous bivariate densities. Commun. Statist. Theory Methods 16(3):867-876], called marginal replacement, is used. The main result of this paper allows a simplified way of conditionalizing on more than one univariate margin in a normal copula model. [ABSTRACT FROM AUTHOR]

In this introductory article for the Special Issue on Innovation At and Across Multiple Levels of Analysis, we review major streams of extant research on innovation to establish a clear role for multilevel theory and research within this domain. We then examine and illustrate two fundamental and complementary approaches for investigating multilevel linkages--bottom-up emergent processes and top-down processes. In a brief commentary on each paper in the special issue, we overview the conceptual questions addressed by the research, identify the particular model of multilevel effects that serves as its foundation, and suggest how the use of multilevel models provides insights that help us better understand how innovation phenomena at one level of analysis are linked to those at another, thus providing a richer and more complete perspective on innovation. We conclude by identifying major methodological and applied contributions of the special issue and suggesting future research directions for the study of innovation at and across multiple levels of analysis. [ABSTRACT FROM AUTHOR]

The paper "Asymmetric Information, Incentives and Intrafirm Resource Allocation," by Harris, Kriebel, and Raviv, was published in the June 1982 issue of Management Science. In this article, written as part of this journal's 50-year anniversary celebration, we highlight the significance of the Harris et al. paper for research in managerial accounting. We first formulate and solve a continuous version of the Harris et al. model to illustrate the key assumptions and findings of their paper. We then review several strands of the resource-allocation literature in managerial accounting that have taken their inspiration, either directly or indirectly, from the work of Harris et al. [ABSTRACT FROM AUTHOR]

This paper initiates the study of the testable implications of choice data in settings where agents have privacy preferences. We adapt the standard conceptualization of consumer choice theory to a situation where the consumer is aware of, and has preferences over, the information revealed by her choices. The main message of the paper is that little can be inferred about consumers' preferences once we introduce the possibility that the consumer has concerns about privacy. This holds even when consumers' privacy preferences are assumed to be monotonic and separable. This motivates the consideration of stronger assumptions and, to that end, we introduce an additive model for privacy preferences that has testable implications. [ABSTRACT FROM AUTHOR]

This paper provides a mathematical and economic analysis of 'Incentives and Computing Systems for Team-Based Organizations' by A. Barua, C. H. Sophie Lee, and A. B. Whinston, which was published in Organization Science in 1995. Several points were not adequately stated in the original article and one of the key definitions is not clear, nor is it in keeping with the classical theory of production. Although the Cobb-Douglas production function is often used in the article, it does not comply with the article's definitions. The two main contributions of this paper are (1) to provide a word of caution to other readers who might try to extend Barua et al. (1995) and (2) to suggest alternative formulations and directions for future research. [ABSTRACT FROM AUTHOR]

In this paper, we study the quadratic assignment problem with a rank-one cost matrix (QAP-R1). Four integer-programming formulations are introduced of which three are assumed to have partial integer data. Unlike the standard quadratic assignment problem, some of our formulations can solve reasonably large instances of QAP-R1 with impressive running times and are faster than some metaheuristics. Pairwise relative strength of the LP relaxations of these formulations are also analyzed from theoretical and experimental points of view. Finally, we present a new metaheuristic algorithm to solve QAP-R1 along with its computational analysis. Our study offers the first systematic experimental analysis of integer-programming models and heuristics for QAP-R1. The benchmark instances with various characteristics generated for our study are made available to the public for future research work. Some new polynomially solvable special cases are also introduced. Summary of Contribution: This paper aims to advance our knowledge and ability in solving an important special case of the quadratic assignment problem. It shows how to exploit inherent properties of an optimization problem to achieve computational advantages, a strategy that was followed by researchers in model building and algorithm developments for decades. Our computational results attest to this time-tested general philosophy. The paper presents the first systematic computational study of the rank one quadratic assignment problem, along with new mathematical programming models and complexity analysis. We believe the theoretical and computational results of this paper will inspire further research on the topic and will be of significant value to practitioners using rank one quadratic assignment models. [ABSTRACT FROM AUTHOR]

This paper presents the formulation of a new optimization problem designated as the express minibus problem, which intends to form small groups of clients with compatible boarding/exiting points in time and space for a new type of urban mobility service. This new transport option, as a competitive alternative to the private car, aims to provide almost direct services between dispersed demand poles in places where high-capacity and efficient public transport options are scarce, thus combining the major strengths of both public transport and private vehicles. Conventional public transport systems can present efficient space and energy consumption, whereas private vehicles have high levels of flexibility, are fast, and are always available. The proposed algorithm aims at assessing the potential demand of this new service by developing a clustering algorithm in which the groups of clients formed for each minibus route should present the following characteristics: there is a small number of boarding and exiting points, where in each point there is only boarding or alighting; boarding points should be close to each other, as well as the exiting points; there must be a reasonable distance between the last boarding point and the first exiting point; the average load factor must be high; and for all clients the overall detour time relative to the direct service should be small. This paper presents the rationale and structure of the clustering algorithm, followed by an application for the Lisbon metropolitan area during the morning peak, which could be adapted to the afternoon peak with some slight modifications. [ABSTRACT FROM AUTHOR]

Even though rail transportation is one of the most fuel efficient forms of surface transportation, the cost of fuel constitutes one of the major categories of very high operating costs for railroad companies. In the United States, unlike in Europe, fueling cost is, by far, the highest single operating cost. For larger companies with several thousands of miles of rail network, the fuel bills often run into several billions of dollars annually. The railroad fueling problem considered in this paper has three distinct cost components. Fueling stations charge a location-dependent price for the fuel in addition to a fixed contracting fee over the entire planning horizon. In addition, the railroad company must also bear incidental and notional costs for each fueling stop. This paper proposes a mixed-integer linear program model that determines the optimal strategy for contracting and fuel purchase schedule decisions that minimize overall costs under certain reasonable assumptions. The model is tested on large, real-life problem situations. The mathematical model is further refined by introduction of several feasible mixed-integer program (MIP) cuts. The paper compares the efficiency of different MIP cuts to reduce the run time. Although the scale of the problem was expected to diminish the model performance, run time and memory requirements were observed to be fairly reasonable. It, thus, establishes that exact workable methods should be considered for actual implementation of this problem at railroad companies, in addition to heuristic approaches. This paper has given us a reasonable satisfaction that we have successfully demonstrated the capability to solve a dynamic version of the locomotive refueling problem where the capacity of the fueling yards vary across days during the planning horizon. [ABSTRACT FROM AUTHOR]

This paper considers the problem of test design and implementation when testing is imperfect. Items that are classified as conforming may be nonconforming, resulting in a poor outgoing quality level. Items that are classified as nonconforming may be conforming, resulting in excessive scrapping of conforming items. The failed items are commonly retested to reduce the scrapping problem. Alternatively, the accepted items may be retested to improve outgoing quality. In this paper, we examine the question of whether it is better to repetitively test rejected items, or to repetitively test accepted items. We also examine the relationship between the two testing policies, testing equipment accuracy and capacity, incoming quality, and outgoing quality requirements. [ABSTRACT FROM AUTHOR]

This paper investigates equilibrium R&D investment strategies of firms endowed with different innovation potentials. To address this issue, this paper permits two stages of innovation and develops a simple stochastic game model involving two firms. It is shown that in equilibrium, a leader in the multiple stage innovation game invests more than a follower; firms compete more vigorously in the later stages of innovation than in the earlier stages; and a follower is more likely to choose a riskier innovation path than one requiring, on average, equivalent effort. It provides an explanation of how the expected benefits, the cost of R&D, and interactions between competing firms combine to determine dynamic R&D strategies over time. [ABSTRACT FROM AUTHOR]

Zero inventory (ZI) and the related concepts of Just in Time and Kanban are innovative and powerful means to improve production efficiency. This paper applies these concepts to a series facility production system and, in particular, identifies which facilities will never hold inventory irrespective of product demand. Pinpointing beforehand that certain facilities will have no inventory can simplify such strategic decisions as facility design, site location, and space utilization, plus it eases production scheduling. Next, a procedure is developed which increases the number of facilities that will never hold inventory. This procedure implements the ZI philosophy of cutting set up costs to increase efficiency. The results of this paper impact three major areas of production research: (1) strategy and planning—by detecting beforehand facilities that need never hold inventory irrespective of demand; (2) operations—by simplifying day to day production scheduling; and (3) productivity improvement—by cutting set up costs to enhance efficiency. [ABSTRACT FROM AUTHOR]

This paper presents a class of utility functions (class A[sub ∞]) that contains all of the utility functions commonly used for mathematical modeling: the class consisting of those utility functions whose derivatives alternate in sign. A simple representation via mixtures of exponential utilities is provided for this class which is both mathematically convenient and conducive to functional operations. A connection with Laplace transforms and the resultant implications for preference relations, aggregation and utility assessment are discussed. [ABSTRACT FROM AUTHOR]

This paper presents a new technique for forecasting frequencies of events over time for individuals. The technique bases future occurrences on an estimation procedure based on historical data. The estimation procedure incorporates two types of uncertainty: population variation and individual propensity to change. An example is presented. [ABSTRACT FROM AUTHOR]

This paper discusses some current issues in the combination of probabilities and serves as an introduction to a series of four papers and a rejoinder relating to a paper by Morris (1983) on an axiomatic approach to expert resolution. The axiomatic approach and the modeling approach to expert resolution are discussed, and some comments on practical issues are given. [ABSTRACT FROM AUTHOR]

In public policy decision making and in capital planning fractional criterion functions occur. For a given set of desirable target values (goals) τi, this paper develops an algorithm for solving a nonconvex programming problem of the type: Minx∈S Maxi{&phii(fi(x)/gi(x) - τi), i = 1,..., m} where fi are convex functions, gi, are concave functions over the convex subset S of Rn and φi are nondecreasing gauge functions. Here φi(&middot) is the penalty incurred whenever the fractional objective fi/gi deviates from the target value τi, the problem is then to choose an x that minimizes the maximum penalty incurred. [ABSTRACT FROM AUTHOR]

This paper studies the linear programming problem in which all coefficients (even those of the stipulations matrix) are rational functions of a single parameter t called ‘time,’ and provides an algorithm that can serve problems of the following two types: (1) Steady-state behavior [the algorithm can be used to determine the functional form x(t) of the optimal solution as a function of t, this form being valid for all ‘sufficiently large’ values of t], and (2) sensitivity analysis [if a value t0 of ‘time’ is given, the algorithm can be used to determine the two possible functional forms of the optimal solution for all values of t ‘sufficiently dose’ to t0 (the first functional form valid for t«t0, the second for t»t0)]. In addition, the paper gives certain qualitative information regarding steady-state behavior, including the following result: If for some one of the properties of consistency, boundedness, or bounded constraint set, there exists a sequence tn↗+∞ such that the linear program at tn has this property for all n, then the program has this property for all ‘sufficiently large’ values of t. [ABSTRACT FROM AUTHOR]

In a well-known article, Blattberg and Jeuland (1981) apply nonlinear estimation to a market level model based on aggregation of an individual level model of consumer response to advertising. in this paper, a simpler estimation technique is developed and successfully employed for that same model. [ABSTRACT FROM AUTHOR]

The availability of data regarding variables of interest in forecasting problems is sometimes limited, but experts may possess a great deal of relevant information. The approach taken in this paper involves the development of adaptive forecasting models based on such information. Since the models and their parameters are difficult to consider intuitively, information from the experts is elicited in terms of predictive distributions of the variable to be forecasted. Various models can then be considered, and attempting to "fit" a model to the predictive distributions is analogous to attempting to fit a model to a set of observations. This general approach to forecasting is developed in this paper, and a specific model, a linear model with normally distributed errors, is considered in some detail. An actual application involving the forecasting of fatigue life of asphalt pavements illustrates the development of forecasting models from experts' predictive distributions. [ABSTRACT FROM AUTHOR]

This paper combines two rival preference modeling techniques in a new approach to multi-attribute decision making. Currently existing multi-attribute procedures use either global or local preference modeling. In the global modeling technique, a single preference function is constructed in the large; its maximum is the optimal alternative. In the local procedure, sequential approximations of the preference function are constructed in the small. Each approximation generates a trial solution. Under suitable conditions, each trial solution is preferred to its predecessor, so the trial sequence eventually reaches the optimum. Each technique has advantages and disadvantages; this paper combines the desirable features of both techniques in a new improved method. This new method, called the proxy approach, uses the advantages of one technique to overcome the disadvantages of the other. This paper first develops the theoretical aspects of the proxy approach and then compares it to existing procedures. Finally, the proxy algorithm is applied to a curriculum planning problem and numerous insights are gained. [ABSTRACT FROM AUTHOR]

This paper introduces a solution procedure for solving the project time/cost tradeoff problem of reducing a project duration at a minimum cost. The solution to the time/cost problem is achieved by locating a minimal cut in a flow network derived from the original project network. This minimal cut is then utilized to identify the project activities which should experience a duration modification in order to achieve the total project reduction. The paper will document this cut-based procedure and provide a practical application to a project situation. [ABSTRACT FROM AUTHOR]

Queueing systems with interruptions serve as models for a variety of situations occurring in every day life. Usually, for each type of interruption, a separate queueing analysis is required. In this paper we present a single queueing model which can be used to analyze many such systems. The model is in the form of an approximation that is based upon several parameters, which reflect the particular queueing system under consideration. Applications to queueing systems with priorities and breakdowns are given in the paper. [ABSTRACT FROM AUTHOR]

This paper extends the Bierman-Hausman credit-granting model by proving that although the distribution on the probability of collection in the case of failure is no longer a conjugate Beta, it remains tractable; the model therefore need no longer be terminated in the case of failure. Further theorems on the structure of optimal policies, which result in a considerable reduction of the dynamic programming state space, are then presented, and the paper concludes with a discussion of extensions and applications. [ABSTRACT FROM AUTHOR]

Personal, or subjective, probabilities are used as inputs to many inferential and decision-making models, and various procedures have been developed for the elicitation of such probabilities. Included among these elicitation procedures are scoring rules, which revolve the computation of a score based on the assessor's stated probabilities and on the event that actually occurs. The development of scoring rules has, in general, been restricted to the elicitation of discrete probability distributions. In this paper, families of scoring rules for the elicitation of continuous probability distributions are developed and discussed. [ABSTRACT FROM AUTHOR]

Joint ordering strategies are of extreme importance in many inventory control situations. This paper considers a situation involving two items having identical characteristics including unit Poisson demand. The joint ordering rule is to order both items up to a level Q each time the level of either of them drops to zero. Expressions for the probability mass function of the remnant stock, the expected value of the remnant stock, the expected time between orders, and the long-run cost per unit time are shown. The joint ordering strategy is compared with the situation where the two items are treated independently. When the cost of placing an order for two items is equal to that for a single item, it turns out that it is never preferable to use the independent strategy. [ABSTRACT FROM AUTHOR]

The article presents abstracts of various papers related to operation research. The paper, "Decision Making in a Complex Organization," by Charles M. Mottley discusses a critical problem which confronts the top management of defense organizations. Some other articles are "The Application of Operations Research and Digitalized Computational Methods to Forecasting in Baseball," by Lawrence Rosenfeld; "Electronic Data Processing Equipment for Managerial Decisions," by George Glinski; "An Application of Mathematical Models to Entomology," R.A. Langevin and N.J. Hopkins; "The Solution of the Single-Step Queuing Equation for a General Class of Tame-Dependant Coefficients," George Luchak.

Gaming and simulation mean different things to different people. Currently there exist separate schools of individuals working on interrelated but basically different areas. Each has its own special goals and terminology. Yet there is a sufficient overlap among them that it is important to clarify the common and different interests and terminology. The general topic of gaming is ripe for an examination to see to what extent there exists a basic methodology and theory of gaming. This paper addresses itself, in part, to this problem. Different types of games and different purposes are discussed. It is stressed that there is not one validation problem but many validation and specification problems which must be addressed if professional standards are to be attained. [ABSTRACT FROM AUTHOR]

This paper explores several important notions relevant to modern utility theory. Restricting the discussion to the consideration of bivariate utility functions, the paper defines and examines the interrelationships between (1) independence in the utility sense, (2) trade-off or indifference curves, and (3) transformation curves (as defined herein). Following the form in which a set of basic axioms of utility are stated, independence is defined in terms of indifference between 50-50 gambles, and it is shown that, if the condition of the definition holds, then φ (x, y), the bivariate utility function, can be written as a function of x plus a function of y. The concepts of trade-off curve (indifference curve) and transformation curve are also defined on the basis of the indifference relation but are not concerned with gambles. After exploring relationships among the three notions it is shown how the utility curves for the two variables under independence can be constructed on the basis of two trade-off curves. [ABSTRACT FROM AUTHOR]

In an earlier paper ("Some Models of Inventory and an Application", Management Science, Vol. 2, No. 4, July, 1956) the author analyzed four inventory systems which were referred to as Models I, II, III, IV. In the present paper the notion of equivalence of inventory systems is introduced and it is shown that Models I and II are equivalent and so are models III and IV. The results are also extended to systems with non-zero leadtime. In all cases considered it is shown that the total expected costs of the systems (with or without leadtime) can be expressed in the form c1 ∫0S (S - r)f(r) dr + c2 ∫ S ∞ (r - S)f(r) dr. [ABSTRACT FROM AUTHOR]

Since its initial development, long-term contracts have been associated with the gas industry in all regions of the world. This was also the case in Europe where natural gas trade was, for a long time, dominated by bilateral long-term agreements between producers and midstreamers. These contracts fixed a minimum volume to be exchanged (take or pay) and indexed the gas price using a price formula that usually referred to oil product prices. These arrangements allowed market risk sharing between the producer (who takes the price risk) and the midstreamer (who takes the volume risk). They also offered risk hedging since oil is considered as a trusted commodity by investors. The fall of the European natural gas demand, combined with the increase of the oil price, favored the emergence of a gas volume bubble that caused significant losses for most of the European midstreamers bound by long-term agreements. As a result, the downstream part of the industry brought forward the idea of indexing contracts on gas spot prices. In this paper, we present an equilibrium model that endogenously captures the contracting behavior of both producer and midstreamer, who strive to hedge their profit-related risk. Players can choose between gas forward and oil-indexed contracts. Using the model, we show that (i) contracting can reduce the trade risk for both producer and midstreamer; (ii) oil-indexed contracts should be signed only when oil and gas spot prices are well correlated, otherwise, these contracts hold less interest for risk mitigation; (iii) contracts are best suited when the upstream cost structure is mainly driven by capital costs; and (iv) a high level of risk aversion from the midstreamer might deprive upstream investments and downstream consumer surplus. The online appendix is available at . [ABSTRACT FROM AUTHOR]

In this paper, we use a two-period game theoretical model to examine the decisions of a manufacturer and a copycat firmwho are competing for strategic customers. The manufacturer decides on the amount of its market expansion advertising investment in the first period and on its pricing strategy in both periods. Advertising increases the "size of the pie," but eventually the manufacturer may end up inadvertently sharing the benefits with the copycat. After the first period, the copycat makes a market-entry decision, and, if it opts to enter, it also decides on a pricing strategy. The customers are strategic, and they decide whether or not to buy, when to buy, and which product to buy. We find that, interestingly, lower quality levels of the manufacturer's product may increase the manufacturer's prices and profit. Moreover, the manufacturer may be worse off when customers are more likely to purchase its product immediately rather than wait for a price reduction or for the copycat's product. Finally, the copycat may be worse off when customers withhold their purchases in the first period in anticipation of the possibility of copycat product becoming available in a later period. [ABSTRACT FROM AUTHOR]

A simple yet efficient traffic flow model, in particular one that describes vehicle longitudinal operational control and further characterizes a traffic flow fundamental diagram, is always desirable. Though many models have been proposed in the past with each having its own merits, research in this area is far from conclusive. This paper contributes a new model, i.e., the longitudinal control model, to the arsenal with a unique set of properties. The model is suited for a variety of transportation applications, among which a concrete example is provided in this paper. [ABSTRACT FROM AUTHOR]

Competition for the 2011 Daniel H. Wagner Prize for Excellence in Operations Research Practice provided the six finalist papers featured in this special issue of Interfaces. The prestigious Wagner Prize, awarded for achievement in implemented operations research and advanced analytics, emphasizes quality and originality of mathematical models along with clarity of written and oral exposition. Operations research professionals from Intel Corporation won the competition with uniquely comprehensive models to support product planning- determining what products to offer and what features each should have-over a multistage planning period; recently their models were in use by over 250 Intel personnel from most major Intel groups, and were integrating many previously separate business processes. The challenge in a public school system of creating schedules for experimental schools that offer highly individualized instruction provided the setting when the New York City Department of Education called upon a research team from Analytics Operations Engineering, Inc.; new methods developed enabled administrators to better satisfy student needs, while reducing the time devoted to scheduling at a school from roughly eight weeks to roughly two weeks. A team from the University of Texas and Texas A&M University invented methods to help Internet advertising firm Chitika make its ads more effective; implementation increased Chitika's revenues while helping Chitika sign up more site publishers to run its ads. La Poste, the French national postal service, working with a team from INSEAD and from the WHU-Otto Beisheim School of Management, derived a preferred strategy for adopting electric delivery vehicles over time; the team's analysis assisted La Poste in its vehicle acquisition planning and also in related negotiations with energy companies and electric vehicle manufacturers. A team from the University of Waterloo and the University of Michigan collaborated with Ford Motor Company to develop analytical methods for planning and scheduling in especially complex manufacturing situations, such as in stamping plants, where setup times are important; Ford's utilization of these methods has produced significant benefits, including reductions in inventory costs, freight charges, and overtime wages. To help plan a major new exhibit, the Georgia Aquarium teamed with researchers from the Georgia Institute of Technology; recommendations based on the researchers' original analytical methods resulted in a better-than-anticipated exhibit design characterized by improved overall experience for guests, lower operating costs, enhanced treatment of the dolphins, and improvements in operations and show scheduling. [ABSTRACT FROM AUTHOR]