Callable products for an implicit time model with dependent demands

Capacity providers such as airlines and hotels have traditionally increased revenues by practicing market segmentation and revenue management, enabling them to sell the same capacity pool to different consumers at different prices. Callable products can enhance profits and improve consumers' welfare by allowing the firm to broker capacity between consumers with different willingness to pay. A consumer who buys a callable product gives the capacity provider the right to recall capacity at a prespecified recall price. This article studies callable products in the context of the model most commonly used in industry, which handles time implicitly imposing fewer restrictions on the nature of randomness compared to the Poisson arrival process favored in academia. In the implicit time model, capacity providers set booking limits to protect capacity for future high-fare demand. Our numerical study identifies conditions where callable products result in significant gains in profits.     

Untruthful probabilistic demand forecasts in vendor‐managed revenue‐sharing contracts: Coordinating the chain

Vendor‐managed revenue‐sharing arrangements are common in the newspaper and other industries. Under such arrangements, the supplier decides on the level of inventory while the retailer effectively operates under consignment, sharing the sales revenue with his supplier. We consider the case where the supplier is unable to predict demand, and must base her decisions on the retailer‐supplied probabilistic forecast for demand. We show that the retailer's best choice of a distribution to report to his supplier will not be the true demand distribution, but instead will be a degenerate distribution that surprisingly induces the supplier to provide the system‐optimal inventory quantity. (To maintain credibility, the retailer's reports of daily sales must then be consistent with his supplied forecast.) This result is robust under nonlinear production costs and nonlinear revenue‐sharing. However, if the retailer does not know the supplier's production cost, the forecast “improves” and could even be truthful. That, however, causes the supplier's order quantity to be suboptimal for the overall system. © 2007 Wiley Periodicals, Inc. Naval Research Logistics, 2007     

The correlates of transatlantic burden sharing: revising the agenda for theoretical and policy analysis

While recent work has attempted to update the research agenda for transatiantic defense burden-sharing, there remain significant gaps between the public choice defense economics literature and the security studies literature. The presence of such a gap is unfortunate, because defense spending choices are likely shaped by factors identified by the public choice literature, as well as the strategic and cultural variables that the security studies literature tends to focus on, as well as domestic macroeconomic factors. The independent variables identified in recent qualitative literature are extremely useful analytically, and, fortunately, they have reasonable proxies in available quantitative data, which enables scholars to study them across large groups of countries and many years. This article builds upon such work to synthesize the most notable of the factors identified in the current literature, and offers some common analytical ground that will benefit both scholars and practitioners..     

高技术装备维修知识共享

将知识管理的思想引入到装备维修中,认为装备维修组织与高技术装备生产厂家之间的知识共享是提升高技术装备维修能力的重要因素。通过建立知识共享模型,对装备维修组织与高技术装备生产厂家知识共享过程进行了分析,得出知识总量螺旋上升的结果。在此基础上进行博弈分析,运用数学方法,找出主导高技术装备维修知识共享活动的关键因素,并结合实际,研究应对方法,推动装备维修知识共享,促进装备维修组织知识创新,从而提高装备维修能力。     

Technical note: Finite-time regret analysis of Kiefer-Wolfowitz stochastic approximation algorithm and nonparametric multi-product dynamic pricing with unknown demand

We consider the problem of nonparametric multi-product dynamic pricing with unknown demand and show that the problem may be formulated as an online model-free stochastic program, which can be solved by the classical Kiefer-Wolfowitz stochastic approximation (KWSA) algorithm. We prove that the expected cumulative regret of the KWSA algorithm is bounded above by where κ₁, κ₂ are positive constants and T is the number of periods for any T = 1, 2, … . Therefore, the regret of the KWSA algorithm grows in the order of , which achieves the lower bounds known for parametric dynamic pricing problems and shows that the nonparametric problems are not necessarily more difficult to solve than the parametric ones. Numerical experiments further demonstrate the effectiveness and efficiency of our proposed KW pricing policy by comparing with some pricing policies in the literature.     

Value management of diagnostic equipment with cancelation,no‐show,and emergency patients

Magnetic resonance imaging and other multifunctional diagnostic facilities, which are considered as scarce resources of hospitals, typically provide services to patients with different medical needs. This article examines the admission policies during the appointment management of such facilities. We consider two categories of patients: regular patients who are scheduled in advance through an appointment system and emergency patients with randomly generated demands during the workday that must be served as soon as possible. According to the actual medical needs of patients, regular patients are segmented into multiple classes with different cancelation rates, no‐show probabilities, unit value contributions, and average service times. Management makes admission decisions on whether or not to accept a service request from a regular patient during the booking horizon to improve the overall value that could be generated during the workday. The decisions should be made by considering the cancelation and no‐show behavior of booked patients as well as the emergency patients that would have to be served because any overtime service would lead to higher costs. We studied the optimal admission decision using a continuous‐time discrete‐state dynamic programming model. Identifying an optimal policy for this discrete model is analytically intractable and numerically inefficient because the state is multidimensional and infinite. We propose to study a deterministic counterpart of the problem (i.e., the fluid control problem) and to develop a time‐based fluid policy that is shown to be asymptotically optimal for large‐scale problems. Furthermore, we propose to adopt a mixed fluid policy that is developed based on the information obtained from the fluid control problem. Numerical experiments demonstrate that this improved policy works effectively for small‐scale problems. © 2016 Wiley Periodicals, Inc. Naval Research Logistics 63: 287–304, 2016     

Emergency transshipment in decentralized dealer networks: When to send and accept transshipment requests

While there has been significant previous literature on inventory transshipment, most research has focused on the dealers' demand filling decision (when to fill transshipment requests from other dealers), ignoring the requesting decision (when to send transshipment requests to other dealers). In this paper we develop optimal inventory transshipment policies that incorporate both types of decisions. We consider a decentralized system in which the dealers are independent of the manufacturer and of each other. We first study a network consisting of a very large number of dealers. We prove that the optimal inventory and transshipment decisions for an individual dealer are controlled by threshold rationing and requesting levels. Then, in order to study the impact of transshipment among independent dealers in a smaller dealer network, we consider a decentralized two‐dealer network and use a game theoretic approach to characterize the equilibrium inventory strategies of the individual dealers. An extensive numerical study highlights the impact of the requesting decision on the dealers' equilibrium behavior in a decentralized setting. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006     

Structural properties of network revenue management models: An economic perspective

Many revenue management problems have a network aspect. In this paper, we argue that a network can be thought of as a system of substitutable and complementary products, and the value of a revenue management model should be supermodular or submodular in the availability of two resources as the resources are economic substitutes or complements. We demonstrate that this is true in the case of a two‐resource dynamic stochastic revenue management model and show how this applies for multi‐resource deterministic static revenue management models. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006     

Security,autonomy and defense burdens: The effects of alliance membership in the 19th and 20th centuries

This paper investigates the effect of alliance membership on the defense burdens of major powers in the 19th and 20th centuries. We hypothesize that the reactions of states to alliance membership will be different in the pre‐nuclear and nuclear eras. Possession of nuclear weapons by allies makes the security provided by the alliance more akin to a collective good than is the case in the pre‐nuclear era. States join alliances for two reasons: security and autonomy. The effects of each of these concerns are identified. We include in our model such alliance‐level factors as the power equivalence of the allies and the number of states in the alliance. We also look at state‐level variables such as power position within the alliance. We conclude that the nuclear period generally operates as the free‐rider principle would posit, while models based on “complementarity of effort” are more applicable in the earlier period.     

“Government contracting options: A model and application“∗

This paper models and simulates a government‐contractor principal‐agent weapon system repair model. Insights are derived as to how government repair contracts should be constructed so as to induce optimal contractor behavior. The paper's general conclusion is that the best contracting approach combines a lump‐sum payment that does not vary with the number of units repaired, expensive item cost‐sharing, and a contractor‐provided availability guarantee. Provided there is intercontractor competition, this type of contract performs well even if the government is poorly informed about weapon system break patterns or repair costs.