Risk pooling in a two-period,two-echelon inventory stocking and allocation problem

The object of this article is to investigate the risk-pooling effect of depot stock in two-echelon distribution system in which the depot serves n retailers in parallel, and to develop computationally tractable optimization procedures for such systems. The depot manager has complete information about stock levels and there are two opportunities to allocate stock to the retailers within each order cycle. We identify first- and second-order aspects to the risk-pooling effect. In particular, the second-order effect is the property that the minimum stock available to any retailer after the second allocation converges in probability to a constant as the number of retailers in the system increases, assuming independence of the demands. This property is exploited in the development of efficient procedures to determine near-optimal values of the policy parameters.     

The optimal linear combination of control variates in the presence of asymptotically negligible bias

The optimal linear combination of control variates is well known when the controls are assumed to be unbiased. We derive here the optimal linear combination of controls in the situation where asymptotically negligible bias is present. The small-sample linear control which minimizes the mean square error (MSE) is derived. When the optimal asymptotic linear control is used rather than the optimal small-sample control, the degradation in MSE is c/n³, where n is the sample size and c is a known constant. This analysis is particulary relevant to the small-sample theory for control variates as applied to the steady-state estimation problem. Results for the method of multiple estimates are also given.     

Reinterpreting western use of coercion in Bosnia‐Herzegovina: Assurances and carrots were crucial

This article demonstrates that assurances and carrots accompanied credible threats every time Western coercion succeeded in Bosnia. This finding is hardly surprising as it merely confirms earlier research on coercive diplomacy, but it is nevertheless important because the crucial role played by assurances and carrots has been completely ignored in most analyses to date. It also has important policy implications at a time when Western, and particularly American, policy‐makers tend to ignore this fact at their peril. US policy towards Iraq and Western policy towards Yugoslavia have been based almost exclusively on the stick in recent years, and its lack of success is therefore not surprising. If Western policy‐makers had learned the right lessons from Bosnia, they would have known that strategies coupling credible threats with credible assurances and carrots would have been more likely to succeed.     

A reply to Larry cable

Recent counterinsurgency experiences in Iraq and Afghanistan have demonstrated that the local operating environment often is dominated by indigenous power-holders. As counterinsurgents seek to establish control over the local population, collaboration with these agents has become an essential aspect of contemporary counterinsurgency. Although the practice of constructing collaborative relationships with indigenous power-holders might be perceived as unconventional by today's counterinsurgents, the approach itself goes back to the colonial era in which modern counterinsurgency has its roots. This article explores the dynamics, benefits, and dangers of collaborative relationships with indigenous power-holders by analysing an infamous episode in Dutch colonial history, the case of the collaboration between Dutch colonial authorities and warlord Teuku Uma during the Aceh War (1873–1913). This relationship ended in disaster for the Dutch as Uma departed their side at the moment he had become their pivotal asset in the local political landscape. The article explains that the Dutch succeeded to co-opt Uma, but failed to control him as they lacked the will and means to do so. Furthermore this case study provides an insight in the way the Dutch colonial authorities dealt with the complex process of intelligence-gathering in a fragmented indigenous society.     

Game theoretic analysis of maximum cooperative purchasing situations

This article introduces maximum cooperative purchasing (MCP)‐situations, a new class of cooperative purchasing situations. Next, an explicit alternative mathematical characterization of the nucleolus of cooperative games is provided. The allocation of possible cost savings in MCP‐situations, in which the unit price depends on the largest order quantity within a group of players, is analyzed by defining corresponding cooperative MCP‐games. We show that a decreasing unit price is a sufficient condition for a nonempty core: there is a set of marginal vectors that belong to the core. The nucleolus of an MCP‐game can be derived in polynomial time from one of these marginal vectors. To show this result, we use the new mathematical characterization for the nucleolus for cooperative games. Using the decomposition of an MCP‐game into unanimity games, we find an explicit expression for the Shapley value. Finally, the behavior of the solution concepts is compared numerically. © 2013 Wiley Periodicals, Inc. Naval Research Logistics 60: 607–624, 2013     

Country survey VI: Australia

Australia is a geographically large country, with the world's longest national coastline to defend, but a relatively small economy of some 17.5 million people. Since World War II, Australia has faced the dilemma of how to structure defence policy in the absence of an identifiable threat. Its policy of self‐reliance aims to permit Australia to conduct defensive operations in the event of low/medium level threats without depending immediately on its allies. This is to be achieved through the technological sophistication of defence equipment, a highly professional but small defence force and local industry support.

The burden of defence, measured as the share of defence outlay in GDP declined from about 3% in 1971–72 to about 2.3% in 1993–94. It has been the Government's policy to encourage the development of local defence‐related industry, in particular in areas such as: electronics/optics; communications and information technology; aerospace; shipbuilding and repair, munitions; and land vehicles. However, defence procurement has a small impact on the Australian economy as a whole.