Strategic capacity decision‐making in a stochastic manufacturing environment using real‐time approximate dynamic programming

In this study, we illustrate a real‐time approximate dynamic programming (RTADP) method for solving multistage capacity decision problems in a stochastic manufacturing environment, by using an exemplary three‐stage manufacturing system with recycle. The system is a moderate size queuing network, which experiences stochastic variations in demand and product yield. The dynamic capacity decision problem is formulated as a Markov decision process (MDP). The proposed RTADP method starts with a set of heuristics and learns a superior quality solution by interacting with the stochastic system via simulation. The curse‐of‐dimensionality associated with DP methods is alleviated by the adoption of several notions including “evolving set of relevant states,” for which the value function table is built and updated, “adaptive action set” for keeping track of attractive action candidates, and “nonparametric k nearest neighbor averager” for value function approximation. The performance of the learned solution is evaluated against (1) an “ideal” solution derived using a mixed integer programming (MIP) formulation, which assumes full knowledge of future realized values of the stochastic variables (2) a myopic heuristic solution, and (3) a sample path based rolling horizon MIP solution. The policy learned through the RTADP method turned out to be superior to polices of 2 and 3. © 2010 Wiley Periodicals, Inc. Naval Research Logistics 2010     

Revenue management with aircraft reassignment flexibility

A well‐studied problem in airline revenue management is the optimal allocation of seat inventory among different fare‐classes, given a capacity for the flight and a demand distribution for each class. In practice, capacity on a flight does not have to be fixed; airlines can exercise some flexibility on the supply side by swapping aircraft of different capacities between flights as partial booking information is gathered. This provides the airline with the capability to more effectively match their supply and demand. In this paper, we study the seat inventory control problem considering the aircraft swapping option. For theoretical and practical purposes, we restrict our attention to the class of booking limit policies. Our analytical results demonstrate that booking limits considering the swapping option can be considerably different from those under fixed capacity. We also show that principles on the relationship between the optimal booking limits and demand characteristics (size and risk) developed for the fixed‐capacity problem no longer hold when swapping is an option. We develop new principles and insights on how demand characteristics affect the optimal booking limits under the swapping possibility. We also develop an easy to implement heuristic for determining the booking limits under the swapping option and show, through a numerical study, that the heuristic generates revenues close to those under the optimal booking limits. © 2011 Wiley Periodicals, Inc. Naval Research Logistics, 2011     

A location‐inventory model with lateral transshipments

We study an infinite horizon periodic stochastic inventory system consisting of retail outlets and customers located on a homogenous line segment. In each period, the total demand, generated by the customers on the line, is normally distributed. To better match supply and demand, we incorporate lateral transshipments. We propose a compact model in which the strategic decisions—the number and locations of retail outlets—are determined simultaneously with the operational decisions—the inventory replenishment and transshipment quantities. We find the optimal balance between the risk‐pooling considerations, which drive down the optimal number of retail outlets, and lateral transshipments, which drive up the optimal number of retail outlets. We also explore the sensitivity of the optimal number of retail outlets to various problem parameters. This article presents a novel way of integrating lateral transshipments in the context of an inventory‐location model. © 2011 Wiley Periodicals, Inc. Naval Research Logistics, 2011     

Book Reviews

The purpose of this article is to analyse British strategic nuclear targeting between 1974 and 1979, prior to the successful completion of the sophisticated modification to Polaris submarine-missile system codenamed Chevaline. It will use as its starting point the parameters for UK strategic nuclear targeting, and the foundation of the ‘Moscow Criterion’, prior to the deployment of Britain's Polaris submarines which began in 1968. It will then discuss the recommendation by the Chiefs of Staff to retarget Polaris in 1975/76 and the implications of that recommendation in terms of the British approach to strategic nuclear deterrence. The article will conclude with an assessment of these retargeting decisions on the decision to replace Polaris with the US Trident system in 1980.     

Bounded flexibility in days‐on and days‐off scheduling

This article presents a flexible days‐on and days‐off scheduling problem and develops an exact branch and price (B&P) algorithm to find solutions. The main objective is to minimize the size of the total workforce required to cover time‐varying demand over a planning horizon that may extend up to 12 weeks. A new aspect of the problem is the general restriction that the number of consecutive days on and the number of consecutive days off must each fall within a predefined range. Moreover, the total assignment of working days in the planning horizon cannot exceed some maximum value. In the B&P framework, the master problem is stated as a set covering‐type problem whose columns are generated iteratively by solving one of three different subproblems. The first is an implicit model, the second is a resource constrained shortest path problem, and the third is a dynamic program. Computational experiments using both real‐word and randomly generated data show that workforce reductions up to 66% are possible with highly flexible days‐on and days‐off patterns. When evaluating the performance of the three subproblems, it was found that each yielded equivalent solutions but the dynamic program proved to be significantly more efficient. © 2013 Wiley Periodicals, Inc. Naval Research Logistics 60: 678–701, 2013     

Basra's not Belfast: the British Army, ‘Small Wars’ and Iraq

This article examines British Army operations in Iraq. It focuses on the causes of the army's apparent failure to live up to its reputation for the conduct of small wars. The paper discusses the British experience of small wars in the context of Iraq, the influence of doctrine and strategy, and the political and moral factors that shaped the army's performance. The paper's conclusions suggest that the Iraq War may cause a significant reappraisal, not just of military doctrine and strategy, but also of Britain's role in future small wars.     

Optimal versus required defence expenditure: The case of the Greek-Turkish arms race

The aim of this paper is to indicate the extent to which the arms race against Turkey, in which Greece and Cyprus have been entangled, imposes a defence expenditure burden that is tough for the two allies to bear. To do so we have resorted to evaluating the optimal military expenditure for the two countries, allied in the context of the Integrated Defence Doctrine, which is compatible with the constraints imposed by the resources of their economies. All experiments and scenarios examined lead to the conclusion that the current defence burden of the two allies seems to be driving their economies beyond capacity limits. The fact remains, however, that under the circumstances, a one-sided disarmament policy like the one currently followed by Greece, is a risky choice given that the long-term armament programmes pursued by Turkey, whose role in this arms race has been proven as leading, leave very small room to the Greek and Cypriot sides to reduce their own defence expenditure.