Search and the introduction of improved technologies

Modeling R&D as standard sequential search, we consider a monopolist who can implement a sequence of technological discoveries during the technology search process: he earns revenue on his installed technology while he engages in R&D to find improved technology. What is not standard is that he has a finite number of opportunities to introduce improved technology. We show that his optimal policy is characterized by thresholds ξ_i(x): introduce the newly found technology if and only if it exceeds ξ_i(x) when x is the state of the currently installed technology and i is the number of remaining introductions allowed. We also analyze a nonstationary learning‐by‐doing model in which the monopolist's experience in implementing new technologies imparts increased capability in generating new technologies. Because this nonstationary model is not in the class of monotone stopping problems, a number of surprising results hold and several seemingly obvious properties of the stationary model no longer hold. © 2011 Wiley Periodicals, Inc. Naval Research Logistics, 2011     

Inventory pooling games for expensive,low‐demand spare parts

We consider several independent decision makers who stock expensive, low‐demand spare parts for their high‐tech machines. They can collaborate by full pooling of their inventories via free transshipments. We examine the stability of such pooling arrangements, and we address the issue of fairly distributing the collective holding and downtime costs over the participants, by applying concepts from cooperative game theory. We consider two settings: one where each party maintains a predetermined stocking level and one where base stock levels are optimized. For the setting with fixed stocking levels, we unravel the possibly conflicting effects of implementing a full pooling arrangement and study these effects separately to establish intuitive conditions for existence of a stable cost allocation. For the setting with optimized stocking levels, we provide a simple proportional rule that accomplishes a population monotonic allocation scheme if downtime costs are symmetric among participants. Although our whole analysis is motivated by spare parts applications, all results are also applicable to other pooled resource systems of which the steady‐state behavior is equivalent to that of an Erlang loss system. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

DETERMINING THE DEFENCE INDUSTRIAL BASE

This paper models the determination of the defence industrial base – the number of different military systems a country decides to maintain. High R&D costs means that few countries can afford to produce major weapons systems and the producers also import systems. Non‐producers rely on imports and we assume their demand is driven by regional arms races. Military capability is determined by the number of systems and the quantity and quality of each. We examine how the defence industrial base is influenced by military expenditures, R&D costs, export controls, the nature of regional arms races and a variety of other factors.     

How should modeling and simulation be used to support defense acquisition?

This paper investigates the potential for modeling and simulation to contribute to new defense system development, by increasing the productivity of traditional R&D in developing system‐specific technology. Building on a previous optimal control model of defense system R&D, it shows that (1) the optimal use of modeling is related in a natural way to that of traditional R&D, and (2) both have similar optimal profiles over time. Simulated results based on limited historical data suggest that optimal use of modeling could increase the rate of growth in system‐specific technology significantly.     

ON THE CHOICE OF MULTI-TASK R&D DEFENSE PROJECTS: A CASE STUDY OF The ISRAELI MISSILE DEFENSE SYSTEM

Investments in R&D constitute a major share of the expenditures of the hi-tech industry since, generally, they enable firms to successfully compete in the rapidly and constantly changing markets for hi-tech products and services. The role of R&D projects is particularly important in the areas of defense and homeland security due to the nature of warfare and the continuous threats posed by arms races and by terror organizations. This study analyzes the choice of the R&D projects designed to counter multiple related military threats. It develops the methodology required to assess whether it is preferable to develop one project to thwart several related threats, or several distinct projects, each of which provides an answer to one specific threat or a partial set of the threats. An analytic solution is provided and assessed for two simple models with two related threats. A solution of the model is then provided for any number of related threats, using a dynamic programming methodology. Finally, we demonstrate the usefulness of our model and methodology to Israel’s missile defense problem; that is, we show how to optimally develop systems aimed at thwarting the multiple threats of short-, medium-, and long-range missiles.     

ON THE USE OF TERROR WEAPONS VERSUS MODERN WEAPON SYSTEMS IN AN ARMS RACE BETWEEN DEVELOPED AND LESS DEVELOPED COUNTRIES

Some of the most active arms races are taking place between developed and less developed countries. The inability of less developed countries to compete financially, as well as technologically, with developed countries may be forcing the former to acquire terror weapons (TWP). The Iran–Iraq war in the 1980s and the events of 9/11 proved that the use of TWP is no longer a mere threat; there are several organizations and countries that will not hesitate to use them. This study develops a model of resource allocation in an arms race between a developed country that is characterized by state‐of‐the‐art technology and high GDP, and a less developed country whose technological capability and GDP are much lower. The model is used to predict the optimal mix of weapons of the two countries that are engaged in the arms race. Applying the model to the arms race between Israel and Syria demonstrates its use.     

Screening and selection procedures with control variates and correlation induction techniques

We consider the problem of identifying the simulated system with the best expected performance measure when the number of alternatives is finite and small (often < 500). Recently, more research efforts in the simulation community have been directed to develop ranking and selection (R&S) procedures capable of exploiting variance reduction techniques (especially the control variates). In this article, we propose new R&S procedures that can jointly use control variates and correlation induction techniques (including antithetic variates and Latin hypercube sampling). Empirical results and a realistic illustration show that the proposed procedures outperform the conventional procedures using sample means or control variates alone. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

Service design at diagnostic service centers

We study a service design problem in diagnostic service centers, call centers that provide medical advice to patients over the phone about what the appropriate course of action is, based on the caller's symptoms. Due to the tension between increased diagnostic accuracy and the increase in waiting times more in‐depth service requires, managers face a difficult decision in determining the optimal service depth to guide the diagnostic process. The specific problem we consider models the situation when the capacity (staffing level) at the center is fixed, and when the callers have both congestion‐ and noncongestion‐related costs relating to their call. We develop a queueing model incorporating these features and find that the optimal service depth can take one of two different structures, depending on factors such as the nurses' skill level and the maximum potential demand. Sensitivity analyses of the two optimal structures show that they are quite different. In some situations, it may (or may not) be optimal for the manager to try to expand the demand at the center, and increasing skill level may (or may not) increase congestion. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

Production scheduling with history‐dependent setup times

We consider a parallel‐machine scheduling problem with jobs that require setups. The duration of a setup does not depend only on the job just completed but on a number of preceding jobs. These setup times are referred to as history‐dependent. Such a scheduling problem is often encountered in the food processing industry as well as in other process industries. In our model, we consider two types of setup times—a regular setup time and a major setup time that becomes necessary after several “hard‐to‐clean” jobs have been processed on the same machine. We consider multiple objectives, including facility utilization, flexibility, number of major setups, and tardiness. We solve several special cases assuming predetermined job sequences and propose strongly polynomial time algorithms to determine the optimal timing of the major setups for given job sequences. We also extend our analysis to develop pseudopolynomial time algorithms for cases with additional objectives, including the total weighted completion time, the total weighted tardiness, and the weighted number of tardy jobs. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

Batch scheduling with step‐deteriorating processing times to minimize flowtime

Both topics of batch scheduling and of scheduling deteriorating jobs have been very popular among researchers in the last two decades. In this article, we study a model combining these two topics. We consider a classical batch scheduling model with unit‐jobs and batch‐independent setup times, and a model of step‐deterioration of processing times. The objective function is minimum flowtime. The optimal solution of the relaxed version (allowing non‐integer batch sizes) is shown to have a unique structure consisting of two consecutive decreasing arithmetic sequences of batch sizes. We also introduce a simple and efficient rounding procedure that guarantees integer batch sizes. The entire solution procedure requires an effort of O(n) (where nis the number of jobs.) © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

Determining crane areas for balancing workload among interfering and noninterfering cranes

This article treats the problem of subdividing an area for storing containers such that the workload is evenly shared among the cranes operating the resulting subareas. We consider two crane sets: while noncrossing constraints between cranes of the same set need to be observed, cranes of different sets do not interfere. Such a problem setting is, for instance, relevant for scheduling the (un‐)loading of vessels by parallel quay cranes operating on opposing berths or in container yards with cross‐over cranes. We formalize the resulting optimization problem, prove computational complexity, and present exact and heuristic solution procedures. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

党的纪律建设浅论

党的纪律在革命和建设中发挥了极大的作用,改革开放和市场经济的建立,使党的纪律建设面临着严峻的挑战,党的纪律与社会主义的政治文明是相互影响的,要严格党的纪律,发挥党的纪律作用,开创社会主义政治文明建设新局面。     

A generalized assignment model for dynamic supply chain capacity planning

We consider a generalization of the well‐known generalized assignment problem (GAP) over discrete time periods encompassed within a finite planning horizon. The resulting model, MultiGAP, addresses the assignment of tasks to agents within each time period, with the attendant single‐period assignment costs and agent‐capacity constraint requirements, in conjunction with transition costs arising between any two consecutive periods in which a task is reassigned to a different agent. As is the case for its single‐period antecedent, MultiGAP offers a robust tool for modeling a wide range of capacity planning problems occurring within supply chain management. We provide two formulations for MultiGAP and establish that the second (alternative) formulation provides a tighter bound. We define a Lagrangian relaxation‐based heuristic as well as a branch‐and‐bound algorithm for MultiGAP. Computational experience with the heuristic and branch‐and‐bound algorithm on over 2500 test problems is reported. The Lagrangian heuristic consistently generates high‐quality and in many cases near‐optimal solutions. The branch‐and‐bound algorithm is also seen to constitute an effective means for solving to optimality MultiGAP problems of reasonable size. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

Lot streaming with supplier–manufacturer coordination

Lot splitting refers to breaking a production lot into smaller sublots during production. Coordinating lot splitting decisions across multiple stages of a production process is a challenging task. Traditional lot splitting and lot streaming models implicitly assume that the entire system is operated and owned by the same firm, or there exists a coordinator who controls the operation of all machines in the system. In this paper, we consider the situation where the machines in a multiple‐stage production process are owned and managed by different companies. Every item in a given production lot has to go through the processing by the supplier's machine, followed by the manufacturer's machine, and so on. We develop and analyze coordination mechanisms that enable different parties in the supply chain to coordinate their lot splitting decisions so as to achieve a systemwide optimum. © 2004 Wiley Periodicals, Inc. Naval Research Logistics, 2004     

Bayesian analysis of queues with impatient customers: Applications to call centers

Queuing models have been extensively used in the literature for obtaining performance measures and developing staffing policies. However, most of this work has been from a pure probabilistic point of view and has not addressed issues of statistical inference. In this article, we consider Bayesian queuing models with impatient customers with particular emphasis on call center operations and discuss further extensions. We develop the details of Bayesian inference for queues with abandonment such as the M/M/s + M model (Erlang‐A). In doing so, we discuss the estimation of operating characteristics and its implications on staffing. We illustrate the implementation of the Bayesian models using actual arrival, service, and abandonment data from call centers. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012     

Price and capacity decisions of service systems with boundedly rational customers

We consider price and capacity decisions for a profit‐maximizing service provider in a single server queueing system, in which customers are boundedly rational and decide whether to join the service according to a multinomial logit model. We find two potential price‐capacity pair solutions for the first‐order condition of the profit‐maximizing problem. Profit is maximized at the solution with a larger capacity, but minimized at the smaller one. We then consider a dynamically adjusting capacity system to mimic a real‐life situation and find that the maximum can be reached only when the initial service rate is larger than a certain threshold; otherwise, the system capacity and demand shrink to zero. We also find that a higher level of customers’ bounded rationality does not necessarily benefit a firm, nor does it necessarily allow service to be sustained. We extend our analysis to a setting in which customers’ bounded rationality level is related to historical demand and find that such a setting makes service easier to sustain. Finally we find that bounded rationality always harms social welfare.     

Strategic outsourcing under technology spillovers

We study a supply chain in which an original equipment manufacturer (OEM) and a contract manufacturer (CM) compete in the finished goods market. The OEM can decide whether to outsource the intermediate good, a critical component for producing the finished good, from the CM or make in‐house production. Technology transition improves the CM's production efficiency, and it can take two different forms: a direct technology transfer from the OEM to the CM or technology spillovers through outsourcing from the OEM to the CM. We document the possibility of strategic outsourcing, that is, the CM supplies the intermediate good to the OEM when she is less efficient than the OEM's in‐house production. We find that technology spillovers can strengthen the incentive for strategic outsourcing. Furthermore, compared with direct technology transfers, outsourcing coupled with technology spillovers may generate more technology transition. Outsourcing is a particularly appropriate channel for implicit collusion when the OEM is not very efficient with the production of the intermediate good. Our results suggest that ex post competition on the finished goods can create room for ex ante collaboration and provide some implications on the OEM's outsourcing strategies when facing a competitive CM.© 2014 Wiley Periodicals, Inc. Naval Research Logistics 61: 501–514, 2014     

Conflict and third-party intervention

The paper looks at various scenarios of possible concern for intervening third parties when two factions are engaged in a conflict and act strategically against one another. A standard conflict model is used to determine appropriate intervention strategies in order to lower the overall level of conflict. Choosing a suitable strategy in such a setting, the third party must not only take into account the direct impact of its efforts but also the indirect impacts that result from the strategic interaction among the parties involved.     

Timing replacement decisions under discontinuous technological change

We consider the problem of deciding whether to keep a piece of equipment or replace it with a more advanced technology in an environment of technological change. Our model assumes that the costs associated with the presently available technology and future technologies are known, but that the appearance times of future technologies are uncertain. We develop a procedure for computing the optimal keep-or-replace decision that iteratively incorporates a technological forecast. For a certain class of situations, we show that our approach requires the minimum possible amount of forecasted data.     

Interchange fee rate,merchant discount rate,and retail price in a credit card network: A game‐theoretic analysis

We consider two game‐theoretic settings to determine the optimal values of an issuer's interchange fee rate, an acquirer's merchant discount rate, and a merchant's retail price in a credit card network. In the first setting, we investigate a two‐stage game problem in which the issuer and the acquirer first negotiate the interchange fee rate, and the acquirer and the retailer then determine their merchant discount rate and retail price, respectively. In the second setting, motivated by the recent US bill “H.R. 2695,” we develop a three‐player cooperative game in which the issuer, the acquirer, and the merchant form a grand coalition and bargain over the interchange fee rate and the merchant discount rate. Following the cooperative game, the retailer makes its retail pricing decision. We derive both the Shapley value‐ and the nucleolus‐characterized, and globally‐optimal unique rates for the grand coalition. Comparing the two game settings, we find that the participation of the merchant in the negotiation process can result in the reduction of both rates. Moreover, the stability of the grand coalition in the cooperative game setting may require that the merchant should delegate the credit card business only to the issuer and the acquirer with sufficiently low operation costs. We also show that the grand coalition is more likely to be stable and the U.S. bill “H.R. 2695” is thus more effective, if the degree of division of labor in the credit card network is higher as the merchant, acquirer, and issuer are more specialized in the retailing, acquiring, and issuing operations, respectively. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012