HARD CURRENCIES FOR HARD TIMES. TERROR ATTACKS AND THE CHOICE OF MONETARY ANCHORS

As terror’s victims increase, hard currency commitments gain effectiveness in reducing inflation, and central bank independence loses its effectiveness, because terror reduces transparency and the number of veto players in domestic politics. PCSE (Panel‐Corrected Standard Error) estimations of inflation are run on pooled cross‐section time‐series sample of 87 countries from 1975–2005. When the trend level rises to 100 victims annually a currency board reduces inflation by up to 7.5%, and an independent bank raises inflation by up to 8%. When victims exceptionally exceed the trend by 100, a currency board reduces inflation by 2.5%, and an independent bank raises it by 2%.     

Optimizing the quality control station configuration

We study unreliable serial production lines with known failure probabilities for each operation. Such a production line consists of a series of stations, existing machines, and optional quality control stations (QCSs). Our aim is to decide on the allocation of the QCSs within the assembly line, so as to maximize the expected profit of the system. In such a problem, the designer has to determine the QCS configuration and the production rate simultaneously. The profit maximization problem is approximated assuming exponentially distributed processing times, Poisson arrival process of jobs into the system, and the existing of holding costs. The novel feature of our model is the incorporation of holding costs that significantly complicated the problem. Our approximation approach uses a branch and bound strategy that employs our fast dynamic programming algorithm for minimizing the expected operational costs for a given production rate as a subroutine. Extensive numerical experiments are conducted to demonstrate the efficiency of the branch and bound procedure for solving large scale instances of the problem and for obtaining some qualitative insights.

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Maintenance policies when failure distribution of equipment is only partially known

An optimal schedule for checking an equipment subject to failure which can be detected by inspection only, is derived. Increasing failure rate and one percentile specify the otherwise unknown life distribution. Dynamic programming methodology yields the solution which minimizes the maximum expected cost. Numerical examples are presented and compared with models employing differing amounts of knowledge.