Multi‐item capacitated lot‐sizing problems with setup times and pricing decisions

We study a multi‐item capacitated lot‐sizing problem with setup times and pricing (CLSTP) over a finite and discrete planning horizon. In this class of problems, the demand for each independent item in each time period is affected by pricing decisions. The corresponding demands are then satisfied through production in a single capacitated facility or from inventory, and the goal is to set prices and determine a production plan that maximizes total profit. In contrast with many traditional lot‐sizing problems with fixed demands, we cannot, without loss of generality, restrict ourselves to instances without initial inventories, which greatly complicates the analysis of the CLSTP. We develop two alternative Dantzig–Wolfe decomposition formulations of the problem, and propose to solve their relaxations using column generation and the overall problem using branch‐and‐price. The associated pricing problem is studied under both dynamic and static pricing strategies. Through a computational study, we analyze both the efficacy of our algorithms and the benefits of allowing item prices to vary over time. © 2009 Wiley Periodicals, Inc. Naval Research Logistics, 2010     

Military expenditures,economic growth and spatial spillovers

The relationship between economic growth and military expenditure has been the subject of a large literature in defence economics. This study analyses the influence of military expenditures on economic growth in a global perspective for the time period 2000–2010 taking spatial dimension into account. The augmented Solow model is employed to investigate the defence-growth nexus using the cross-sectional data relating to 128 countries. Following a traditional regression analysis, spatial variations in the relationships are examined utilizing different spatial econometric specifications estimated by maximum likelihood. The regressions are compared with each other via likelihood ratio tests, and the spatial Durbin model is found to be the most appropriate one suggesting that the typical least-squares model is misspecified. Empirical evidence indicates that military expenditure has a positive effect on economic growth with a significant spatial dependence for the time period under consideration.     

MILITARY EXPENDITURE AND ECONOMIC GROWTH IN MIDDLE EASTERN COUNTRIES: A DYNAMIC PANEL DATA ANALYSIS

Defence expenditures have both costs and benefits to the economy. The costs of defence expenditures are mainly emphasized as opportunity costs. On the other hand, defence spending may have growth‐promoting potential benefits: a rise in defence spending may result in a higher aggregate demand, production and employment. This paper examines empirically the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time‐period 1989–1999. The relationship between military expenditure and economic growth is investigated by using cross‐section and dynamic panel estimation techniques. Empirical analysis indicates that military expenditure enhances economic growth in the Middle Eastern countries and Turkey as a whole.     

AFRICA'S NEW SECURITY THREAT

HIV/AIDS is not a traditional security threat but the consequences are just as serious. That it is non-violent serves only to disguise its devastation. HIV/AIDS overwhelms health services, shortens lives, destabilises governments and disrupts societies; sometimes to the extent that major conflict ensues. The extent of the virus is far more serious than initially anticipated. Infection rates in Southern Africa indicate that huge numbers of people will die over the next 10 years, affecting the basic functioning of society. The ability to produce and distribute food will be reduced. The skills and human resources needed for effective government will become even more scarce. Political instability may result in complex humanitarian emergencies and crime; neither of which can be addressed without effective government. While the populations of Southern Africa have proved resilient in the past, it is certain that the virus will extract a huge cost from the people of the region in the future.     

ANALYSING THE DETERMINANTS OF TERRORISM IN TURKEY USING GEOGRAPHICALLY WEIGHTED REGRESSION

This paper investigates the determinants of provincial terrorism in Turkey taking spatial dimension into account for the time period 1990–2006. Following a traditional global regression analysis, spatial variations in the relationships are examined with geographically weighted regression (GWR) to obtain locally different parameter estimates. Empirical results indicate that increases in income and schooling ratio tend to reduce the provincial average level of terrorism, whereas an increase in unemployment enhances it. Moreover, GWR results indicate that the provincial effects of per capita income and education are more pronounced for the Eastern and South Eastern provinces compared to the Western provinces.     

URBAN FORTRESSES

One of the consequences of the state's inability to protect the life and property of all its citizens—especially in developing countries—is the formation of private alternatives to crime prevention and control. Gated communities, or enclosed neighbourhoods, are one such popular alternative. This article compares the phenomenon of gated communities in two developing countries: South Africa and Brazil. Both countries are plagued by violent crime and share key human development indicators. The article also explores key issues that have been raised around gated communities in both countries. Gated communities can contribute to spatial fragmentation in urban areas, and reflect increased polarisation, fragmentation and diminished solidarity within society. By excluding other urban residents and people from surrounding neighbourhoods, gated communities can contribute to social exclusion, inhibiting the construction of social networks that form the basis of social and economic activities.     

A new outranking‐based approach for assigning alternatives to ordered classes

We consider the problem of assigning alternatives evaluated on several criteria into ordered categories C₁,C₂,…,C_p. This problem is known as the multi‐criteria sorting problem and arises in many situations such as classifying countries into different risk levels based on economical and socio‐political criteria, evaluating credit applications of bank customers. We are interested in sorting methods that are grounded on the construction of outranking relations. Among these, the Electre Tri method requires defining multidimensional profiles that represent the “frontier” separating consecutive categories C_h and C_h+1, and assigns an alternative to categories according to how it compares to each of the profiles. The explicit specification of the profiles of consecutive categories can be difficult for decision makers. We develop a new outranking based sorting method that does not require the explicit definition of profiles. We instead require the decision maker to assign a subset of reference alternatives to the categories. To assign the remaining alternatives, each such alternative is compared to reference alternatives, and assigned to categories accordingly. © 2008 Wiley Periodicals, Inc. Naval Research Logistics 2009     

Quality risk in outsourcing: Noncontractible product quality and private quality cost information

This article addresses the concept of quality risk in outsourcing. Recent trends in outsourcing extend a contract manufacturer's (CM's) responsibility to several functional areas, such as research and development and design in addition to manufacturing. This trend enables an original equipment manufacturer (OEM) to focus on sales and pricing of its product. However, increasing CM responsibilities also suggest that the OEM's product quality is mainly determined by its CM. We identify two factors that cause quality risk in this outsourcing relationship. First, the CM and the OEM may not be able to contract on quality; second, the OEM may not know the cost of quality to the CM. We characterize the effects of these two quality risk factors on the firms' profits and on the resulting product quality. We determine how the OEM's pricing strategy affects quality risk. We show, for example, that the effect of noncontractible quality is higher than the effect of private quality cost information when the OEM sets the sales price after observing the product's quality. We also show that committing to a sales price mitigates the adverse effect of quality risk. To obtain these results, we develop and analyze a three‐stage decision model. This model is also used to understand the impact of recent information technologies on profits and product quality. For example, we provide a decision tree that an OEM can use in deciding whether to invest in an enterprise‐wide quality management system that enables accounting of quality‐related activities across the supply chain. © 2009 Wiley Periodicals, Inc. Naval Research Logistics 2009     

Quality control chart design under Jidoka

We consider design of control charts in the presence of machine stoppages that are exogenously imposed (as under jidoka practices). Each stoppage creates an opportunity for inspection/repair at reduced cost. We first model a single machine facing opportunities arriving according to a Poisson process, develop the expressions for its operating characteristics and construct the optimization problem for economic design of a control chart. We, then, consider the multiple machine setting where individual machine stoppages may create inspection/repair opportunities for other machines. We develop exact expressions for the cases when all machines are either opportunity‐takers or not. On the basis of an approximation for the all‐taker case, we then propose an approximate model for the mixed case. In a numerical study, we examine the opportunity taking behavior of machines in both single and multiple machine settings and the impact of such practices on the design of an X – Q C chart. Our findings indicate that incorporating inspection/repair opportunities into QC chart design may provide considerable cost savings. © 2009 Wiley Periodicals, Inc. Naval Research Logistics 2009