Bayes adaptive control of two-echelon inventory systems i: development for a special case of one-station lower echelon and monte carlo evaluation

Bayes adaptive control policies are developed in the present paper for the special case of a one-station lower echelon: a Poisson distribution of demand, whose mean is assumed to have a prior gamma distribution. The cost structure is of a common type. The ordering policy for the upper echelon, which minimizes expected cost, is replaced by a new type of policy, called Bayes prediction policy. This policy does not require tedious computations, of the sort required by dynamic programming solutions. The characteristics of the policies are studied by Monte Carlo simulation, and supplemented by further theoretical development.     

The relationship between decision variables and penalty cost parameter in (Q,R) inventory models

This paper is concerned with the optimum decision variables found using order quantity, reorder point (Q, R) inventory models. It examines whether the optimum variables (Q* and R*) are necessarily monotonic functions of the backorder cost parameter (or equivalently of the performance objective). For a general class of models it is proved that R* must increase as the performance objective is raised, and an inequality condition is derived which governs how Q* will change. Probability distributions of lead time demand are cited or found for which Q* increases, Q* decreases, and Q* is independent of increases in performance objectives or backorder cost parameter.     

Values for optimum reject allowances

Industrial situations exist where it is necessary to estimate the optimum number of parts to start through a manufacturing process in order to obtain a given number of completed good items. The solution to this problem is not straightforward when the expected number of rejects from the process is a random variable and when there are alternative penalties associated with producing too many or too few items. This paper discusses various aspects of this problem as well as some of the proposed solutions to it. In addition, tables of optimum reject allowances based on a comprehensive model are presented.     

Minimum-cost flows in convex-cost networks

An algorithm is given for solving minimum-cost flow problems where the shipping cost over an arc is a convex function of the number of units shipped along that arc. This provides a unified way of looking at many seemingly unrelated problems in different areas. In particular, it is shown how problems associated with electrical networks, with increasing the capacity of a network under a fixed budget, with Laplace equations, and with the Max-Flow Min-Cut Theorem may all be formulated into minimum-cost flow problems in convex-cost networks.     

Book reviews

Exporting Democracy: Fulfilling America's Destiny. By Joshua Muravchik, American Enterprise Institute (1991) ISSN 0–8447–3734–8. $12.95.

Generals in the Palacio. By Roderick Ai Camp. Oxford University Press, (1992), ISBN 0–19–507300–2, £45.

L'Armement en France. Genèse, Ampleur et Coût d'une Industrie By François Chesnais and Claude Serfati, Editions Nathan, Collection Economie/Sciences Sociales, Paris (1992), ISBN 2–09–190086–9.

The Têt Offensive. Intelligence Failure in War. By James Wirtz, Cornell University Press, New York (1991), ISBN 0–8014–2486–0. $38.50.

Restructuring of arms producton in Western Europe. Edited by Michael Brzoska and Peter Lock. Oxford University Press, Oxford (1992), ISBN 0–1982–9147–7. £25.00.

What is Proper Soldiering? A study of new perspectives for the future uses of the Armed Forces of the 1990s. By Michael Harbottle. The Centre for International Peacebuilding, Chipping Norton (1992), £3.50.

The Strategic Defence Initiative By Edward Reiss, Cambridge University Press, Cambridge (1992), ISBN 0–521–41097–5. £30.00.