Country survey IX: Spain

From the early 1980s Spain embarked on a wide‐ranging process of military reform, from organisational changes to defence industrial policies. Investment in military equipment was set to grow, policies were drawn up to foster the domestic defence industrial base, defence R&D rocketed, and Spain joined a myriad of international arms development programmes. Yet, by 1991 the process of reform had run out of steam. Expenditure planning proved unreliable, and firms suffered from sharp cutbacks in procurement expenditure. The model of defence industrial growth sketched in the mid‐1980s had floundered. The Spanish case provides an example of how the quest to maximise defence procurement from domestic sources can fall victim to industrial and budgetary constraints. Spanish defence producers are now becoming increasingly intertwined with foreign defence companies.     

DOES MILITARY EXPENDITURE MATTER FOR INFLATION AND ECONOMIC GROWTH?

This paper sets up a monetary endogenous growth model, and uses it to explain the ambiguous linkage between the military burden and the inflation rate observed in existing empirical studies. It is found that an expansion in the military burden has an ambiguous effect on the inflation rate depending upon the relative extent of two conflicting forces. More specifically, if the increase in the marginal benefit from holding money exceeds (falls short of) the increase in the marginal product of private capital, the inflation rate will rise (fall) in response. Moreover, it is found that an increase in the military burden will stimulate the balanced growth rate, confirming Benoit’s famous empirical findings.     

TERRORIST THREATS AND TRANSITIONAL DYNAMICS IN AN OVERLAPPING GENERATIONS MODEL

Previous research has shown that the duration of a civil war is in part a function of how it ends: in government victory, rebel victory, or negotiated settlement. We present a model of how protagonists in a civil war choose to stop fighting. Hypotheses derived from this theory relate the duration of a civil war to its outcome as well as characteristics of the civil war and the civil war nation. Findings from a competing risk model reveal that the effects of predictors on duration vary according to whether the conflict ended in government victory, rebel victory, or negotiated settlement.     

AN ENDOGENOUS GROWTH MODEL OF CAPITAL AND ARMS ACCUMULATION

This paper attempts to examine the effect of an anticipated foreign military threat on the steady‐state growth rate and the transitional behavior of the economy. The modeling strategy follows the Sandler and Hartley (1995 Sandler, T. and Hartley, K. 1995. The Economics of Defense, Cambridge: Cambridge University Press.  [Google Scholar]) and Dunne et al. (2005 Dunne, J.P., Smith, R.P. and Willenbockel, D. 2005. Models of military expenditure and growth: a critical review. Defence and Peace Economics, 16: 449–461. [Taylor & Francis Online], [Web of Science ®] , [Google Scholar]) viewpoints to emphasize the role of national defense in affecting growth from the perspective of both the demand and the supply sides. We thus combine the public capital version of endogenous growth with a framework of competitive arms accumulation. It is found that the key factor determining the steady state and the transitional effects of a rise in the foreign military threat on the home weapon–capital ratio, the consumption–capital ratio, and the rate of economic growth, is the degree of relative risk aversion.     

Computational analysis of MMAP[K]/PH[K]/1 queues with a mixed FCFS and LCFS service discipline

This paper studies a queueing system with a Markov arrival process with marked arrivals and PH‐distribution service times for each type of customer. Customers (regardless of their types) are served on a mixed first‐come‐first‐served (FCFS) and last‐come‐first‐served (LCFS) nonpreemptive basis. That is, when the queue length is N (a positive integer) or less, customers are served on an FCFS basis; otherwise, customers are served on an LCFS basis. The focus is on the stationary distribution of queue strings, busy periods, and waiting times of individual types of customers. A computational approach is developed for computing the stationary distribution of queue strings, the mean of busy period, and the means and variances of waiting times. The relationship between these performance measures and the threshold number N is analyzed in depth numerically. It is found that the variance of the virtual (actual) waiting time of an arbitrary customer can be reduced by increasing N. © 2000 John Wiley & Sons, Inc. Naval Research Logistics 47: 399–421, 2000     

A dual criteria sequencing problem with earliness and tardiness penalties

We consider the problem of sequencing n jobs on a single machine, with each job having a processing time and a common due date. The common due date is assumed to be so large that all jobs can complete by the due date. It is known that there is an O(n log n)‐time algorithm for finding a schedule with minimum total earliness and tardiness. In this article, we consider finding a schedule with dual criteria. The primary goal is to minimize the total earliness and tardiness. The secondary goals are to minimize: (1) the maximum earliness and tardiness; (2) the sum of the maximum of the squares of earliness and tardiness; (3) the sum of the squares of earliness and tardiness. For the first two criteria, we show that the problems are NP‐hard and we give a fully polynomial time approximation scheme for both of them. For the last two criteria, we show that the ratio of the worst schedule versus the best schedule is no more than . © 2002 Wiley Periodicals, Inc. Naval Research Logistics 49: 422–431, 2002; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/nav.10020     

Optimal outbound dispatch policies: Modeling inventory and cargo capacity

In this paper, we present an optimization model for coordinating inventory and transportation decisions at an outbound distribution warehouse that serves a group of customers located in a given market area. For the practical problems which motivated this paper, the warehouse is operated by a third party logistics provider. However, the models developed here may be applicable in a more general context where outbound distribution is managed by another supply chain member, e.g., a manufacturer. We consider the case where the aggregate demand of the market area is constant and known per period (e.g., per day). Under an immediate delivery policy, an outbound shipment is released each time a demand is realized (e.g., on a daily basis). On the other hand, if these shipments are consolidated over time, then larger (hence more economical) outbound freight quantities can be dispatched. In this case, the physical inventory requirements at the third party warehouse (TPW) are determined by the consolidated freight quantities. Thus, stock replenishment and outbound shipment release policies should be coordinated. By optimizing inventory and freight consolidation decisions simultaneously, we compute the parameters of an integrated inventory/outbound transportation policy. These parameters determine: (i) how often to dispatch a truck so that transportation scale economies are realized and timely delivery requirements are met, and (ii) how often, and in what quantities, the stock should be replenished at the TPW. We prove that the optimal shipment release timing policy is nonstationary, and we present algorithms for computing the policy parameters for both the uncapacitated and finite cargo capacity problems. The model presented in this study is considerably different from the existing inventory/transportation models in the literature. The classical inventory literature assumes that demands should be satisfied as they arrive so that outbound shipment costs are sunk costs, or else these costs are covered by the customer. Hence, the classical literature does not model outbound transportation costs. However, if a freight consolidation policy is in place then the outbound transportation costs can no longer be ignored in optimization. Relying on this observation, this paper models outbound transportation costs, freight consolidation decisions, and cargo capacity constraints explicitly. © 2002 Wiley Periodicals, Inc. Naval Research Logistics 49: 531–556, 2002; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/nav.10030     

Determination of burn‐in parameters and residual life for highly reliable products

Today, many products are designed and manufactured to function for a long period of time before they fail. Determining product reliability is a great challenge to manufacturers of highly reliable products with only a relatively short period of time available for internal life testing. In particular, it may be difficult to determine optimal burn‐in parameters and characterize the residual life distribution. A promising alternative is to use data on a quality characteristic (QC) whose degradation over time can be related to product failure. Typically, product failure corresponds to the first passage time of the degradation path beyond a critical value. If degradation paths can be modeled properly, one can predict failure time and determine the life distribution without actually observing failures. In this paper, we first use a Wiener process to describe the continuous degradation path of the quality characteristic of the product. A Wiener process allows nonconstant variance and nonzero correlation among data collected at different time points. We propose a decision rule for classifying a unit as normal or weak, and give an economic model for determining the optimal termination time and other parameters of a burn‐in test. Next, we propose a method for assessing the product's lifetime distribution of the passed units. The proposed methodologies are all based only on the product's initial observed degradation data. Finally, an example of an electronic product, namely contact image scanner (CIS), is used to illustrate the proposed procedure. © 2002 Wiley Periodicals, Inc. Naval Research Logistics, 2003