Book review

This paper investigates the economic roots of separatist terrorism in Turkey. The political conventional wisdom is that poverty in highly Kurdish‐populated, south‐eastern Turkey is one of the most important causes of separatist terrorism and Turkish–Kurdish conflict in Turkey. Therefore, many economic policies have been implemented to improve the economic conditions in the south‐eastern part of the country. Using the Global Terrorism Database and Vector Autoregression (VAR) methodology, I find that there is no causal relationship between economic conditions in south‐eastern Turkey and separatist terrorism. Therefore policy‐makers should be cautious in using economic measures to prevent separatist terrorism in Turkey.     

U.S. Troops and Foreign Economic Growth

By way of an evolutionary game model we show that mediation in international conflicts might be harmful to the conflicting parties. In fact, under anarchy both parties can be better off than under an international regime if mediation reduces the parties’ reactive capacities (i.e. their abilites to respond to an aggression). This result is applied to issues currently discussed in the literature on international relations such as the role of the United Nations as a mediator of international conflicts.     

SOCIAL PREFERENCES FOR NATIONAL DEFENCE AND POLICE ENFORCEMENT IN WESTERN EUROPE

We study the determinants of social preferences for national defence and for police and law enforcement. For this task, we estimate a bivariate ordered probit model for a set of European countries (France, Finland, Norway, Portugal, Spain and Sweden) in 2006. Determinants of spending decisions for defence and police are found to be linked but are of significantly different magnitudes. Besides, measures against terrorist threats are positively linked to police and defence spending increases, while the subjective perception of fiscal pressure has no influence. Finally, no significant differences are found between Northern and Southern Europe.     

Waiting time analysis of the M/G/1 queue with finite retrial group

We consider an M/G/1 retrial queue with finite capacity of the retrial group. First, we obtain equations governing the dynamic of the waiting time. Then, we focus on the numerical inversion of the density function and the computation of moments. These results are used to approximate the waiting time of the M/G/1 queue with infinite retrial group for which direct analysis seems intractable. © 2007 Wiley Periodicals, Inc. Naval Research Logistics, 2007     

The impact of demand uncertainty on product line design under endogenous substitution

The existing product line design literature devotes little attention to the effect of demand uncertainty. Due to demand uncertainty, the supply‐demand mismatch is inevitable which leads to different degrees of lost sales depending on the configuration of product lines. In this article, we adopt a stylized two‐segment setup with uncertain market sizes and illustrate the interplay between two effects: risk pooling that mitigates the impact of demand uncertainty and market segmentation that facilitates consumer differentiation. Compared to downward substitution, inducing bidirectional substitution through product line decisions including quality levels and prices can yield greater risk pooling effects. However, we show that the additional benefit from the risk pooling effect cannot compensate for the reduced market segmentation effect. We demonstrate that the presence of demand uncertainty can reduce the benefit of market segmentation and therefore the length of product lines in terms of the difference between products. We also propose three heuristics that separate product line and production decisions; each of these heuristics corresponds to one particular form of demand substitution. Our numerical studies indicate that the best of the three heuristics yields performance that is close to optimality. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 143–157, 2015     

Technical note – operational statistics: Properties and the risk‐averse case

Consider a repeated newsvendor problem for managing the inventory of perishable products. When the parameter of the demand distribution is unknown, it has been shown that the traditional separated estimation and optimization (SEO) approach could lead to suboptimality. To address this issue, an integrated approach called operational statistics (OS) was developed by Chu et al., Oper Res Lett 36 (2008) 110–116. In this note, we first study the properties of this approach and compare its performance with that of the traditional SEO approach. It is shown that OS is consistent and superior to SEO. The benefit of using OS is larger when the demand variability is higher. We then generalize OS to the risk‐averse case under the conditional value‐at‐risk (CVaR) criterion. To model risk from both demand sampling and future demand uncertainty, we introduce a new criterion, called the total CVaR, and find the optimal OS under this new criterion. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 206–214, 2015