Criteria and approximate methods for path-constrained moving-target search problems

A search is conducted for a target moving in discrete time among a finite number of cells according to a known Markov process. The searcher must choose one cell in which to search in each time period. The set of cells available for search depends upon the cell chosen in the last time period. The problem is to find a search path, i.e., a sequence of search cells, that either maximizes the probability of detection or minimizes the mean number of time periods required for detection. The search problem is modelled as a partially observable Markov decision process and several approximate solutions procedures are proposed. © 1995 John Wiley & Sons, Inc.     

Discount pricing policies for inventories subject to declining demand

Until only recently, the mechanism behind determining item price has been ignored and the discount price taken as a given in quantity-discount inventory decision problems. Inventory subject to declining demand further complicates both pricing and replenishment decisions. This article provides the vendor with the means for optimally determining both the discount price and replenishment order frequency for all buyers in the system in an environment of declining demand. In the multiple-buyer case, we provide an efficient algorithm for classifying buyers into homogeneous subgroups to further enhance joint cost savings among all system participants.     

A model for use in the rationing of inventory during lead time

While the traditional solution to the problem of meeting stochastically variable demands for inventory during procurement lead time is through the use of some level of safety stock, several authors have suggested that a decision be made to employ some form of rationing so as to protect certain classes of demands against stockout by restricting issues to other classes. Nahmias and Demmy [10] derived an approximate continuous review model of systems with two demand classes which would permit an inventory manager to calculate the expected fill rates per order cycle for high-priority, low-priority, and total system demands for a variety of parameters. The manager would then choose the rationing policy that most closely approximated his fill-rate objectives. This article describes a periodic review model that permits the manager to establish a discrete time rationing policy during lead time by prescribing a desired service level for high-priority demands. The reserve levels necessary to meet this level of service can then be calculated based upon the assumed probability distributions of high- and low-priority demands over lead time. The derived reserve levels vary with the amount of lead time remaining. Simulation tests of the model indicate they are more effective than the single reserve level policy studied by Nahmias and Demmy.     

Sole sourcing versus dual sourcing under stochastic demands and lead times

The use of a single vendor for each inventoried item is usually assumed in most of the inventory models. However, there are situations where the use of more than one vendor should be considered, especially when lead times are stochastic. This research presents a theoretical investigation of the effect of cost structures on the relative performance of sole-sourcing versus dual-sourcing inventory control policies. We show that except for cases where the ordering cost is high, the lead-time variability is low, or the customer service level is low, dual sourcing performs better than sole sourcing under the normally distributed demand and shifted-exponential lead times. Moreover, the computational results indicate the dual sourcing provides a better service level than sole sourcing at the optimal solutions, and that dual sourcing results in larger order quantities than sole sourcing, which suggests that attractive quantity discounts may not be in jeopardy when dual sourcing is employed. Finally, because it is generally known that multiple sourcing can enhance the competition among suppliers, material managers should consider splitting purchase orders when two equally qualified suppliers are available. © 1994 John Wiley & Sons, Inc.     

Analysis of an Alternative Military Healthcare Benefit Design

Abstract

The Military Compensation and Retirement Modernization Commission was established by the Congress in 2013 to perform a systematic review of military compensation to address rising costs and other trends. Their recommendation for reforming the TRICARE health care program was sweeping, and differed greatly from earlier proposals that focused on increasing beneficiary cost shares. Specifically, the commission proposed overhauling the current benefit delivery model and replacing it with a premium-based insurance model offering a menu of DoD-sponsored private health plans. The analysis presented here is based on work that supported the commission by estimating the budgetary impact of its proposed reforms. Results indicate that movement towards the premium-based model would produce an annual budgetary cost savings in the $2 billion to $4 billion range, with a best savings estimate of $3.2 billion.     

Designing and pricing menus of extended warranty contracts

Extended warranties provide “piece of mind” to a consumer in that product failures which occur after the base warranty expires are rectified at little or no cost. They also provide an additional source of revenue for manufacturers or third‐party providers, such as retailers or insurance providers, and help cultivate consumer loyalty. In this article, we analyze a number of extended warranty contracts which differ in design, including restrictions on deferrals and renewals. With the use of dynamic programming, we compute the optimal strategy for a consumer with perfect information and determine the optimal pricing policy for the provider given the consumer's risk characterization. We also provide insight into when different contracts should be issued. Finally, we illustrate how profits can be dramatically increased by offering menus of warranty contracts, as opposed to stand alone contracts, with the use of integer programming. Surprisingly, risk‐taking consumers provide the greatest benefit to offering menus. These insights can help a company develop a comprehensive warranty planning strategy for given products or product lines. © 2009 Wiley Periodicals, Inc. Naval Research Logistics 2009     

Single‐machine scheduling with deadlines to minimize the total weighted late work

We consider scheduling a set of jobs with deadlines to minimize the total weighted late work on a single machine, where the late work of a job is the amount of processing of the job that is scheduled after its due date and before its deadline. This is the first study on scheduling with the late work criterion under the deadline restriction. In this paper, we show that (i) the problem is unary NP‐hard even if all the jobs have a unit weight, (ii) the problem is binary NP‐hard and admits a pseudo‐polynomial‐time algorithm and a fully polynomial‐time approximation scheme if all the jobs have a common due date, and (iii) some special cases of the problem are polynomially solvable.