Emergency transshipment in decentralized dealer networks: When to send and accept transshipment requests

While there has been significant previous literature on inventory transshipment, most research has focused on the dealers' demand filling decision (when to fill transshipment requests from other dealers), ignoring the requesting decision (when to send transshipment requests to other dealers). In this paper we develop optimal inventory transshipment policies that incorporate both types of decisions. We consider a decentralized system in which the dealers are independent of the manufacturer and of each other. We first study a network consisting of a very large number of dealers. We prove that the optimal inventory and transshipment decisions for an individual dealer are controlled by threshold rationing and requesting levels. Then, in order to study the impact of transshipment among independent dealers in a smaller dealer network, we consider a decentralized two‐dealer network and use a game theoretic approach to characterize the equilibrium inventory strategies of the individual dealers. An extensive numerical study highlights the impact of the requesting decision on the dealers' equilibrium behavior in a decentralized setting. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006     

Optimal maintenance policies for serial,multi‐machine systems with non‐instantaneous repairs

We study optimal age‐replacement policies for machines in series with non‐instantaneous repair times by formulating two nonlinear programs: one that minimizes total cost‐rate subject to a steady‐state throughput requirement and another that maximizes steady‐state throughput subject to a cost‐rate budget constraint. Under reasonable assumptions, the single‐machine cost‐optimal and throughput‐optimal solutions are unique and orderable, and the multi‐machine optimal solutions have appealing structure. Furthermore, we establish equivalence between the two formulations and provide an illustrative numerical example. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006     

Transient analysis of Markov models of fault‐tolerant systems with deferred repair using split regenerative randomization

The (standard) randomization method is an attractive alternative for the transient analysis of continuous time Markov models. The main advantages of the method are numerical stability, well‐controlled computation error, and ability to specify the computation error in advance. However, the fact that the method can be computationally very expensive limits its applicability. In this paper, we develop a new method called split regenerative randomization, which, having the same good properties as standard randomization, can be significantly more efficient. The method covers reliability‐like models with a particular but quite general structure and requires the selection of a subset of states and a regenerative state satisfying some conditions. For a class of continuous time Markov models, model class C₂, including typical failure/repair reliability‐like models with exponential failure and repair time distributions and deferred repair, natural selections are available for both the subset of states and the regenerative state and, for those natural selections, theoretical results are available assessing the efficiency of the method in terms of “visible” model characteristics. Those results can be used to anticipate when the method can be expected to be competitive. We illustrate the application of the method using a large class C₂ model and show that for models in that class the method can indeed be significantly more efficient than previously available randomization‐based methods. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006     

WHO IS THE ENEMY?

We examine who benefits when there is a strong leader in place, and who benefits when a situation lacks a proper leader. There are fractious terrorist groups who seek to serve the same people in common cause against a common enemy. The groups compete for rents obtained from the public by engaging in actions against the common enemy. We determine the leadership structure under which each group is better off, as well as the circumstance that the common enemy prefers. We are able to state simple and general conditions for each group and the common enemy to benefit.     

DESIGNING A VIABLE PREDICTION MARKET TO FORECAST DEFENSE ACQUISITION COST AND SCHEDULE OUTCOMES

This paper is the first to demonstrate a viable prediction market that successfully forecasts defense acquisition cost and schedule outcomes, and to provide insights for defense executive decision‐making. Already used in private industry, prediction markets can also accurately forecast outcomes and their associated risks for government programs. Using virtual money, prediction markets allow traders to ‘bet’ on some future outcome. This market mechanism turns out to be a relatively simple and accurate way to discover, aggregate, and communicate to a defense executive the collective market’s beliefs about the likelihood of an eventual outcome of an acquisition program of interest.     

Property distribution and configurations of sovereign states: A rational economic model

A nation's wealth is both an object of conquest to covetous aggressors and a resource to its owners for self defense. To maintain autonomy every country must mount a defense which either makes its capture (1) more expensive than any aggressor can afford, or (2) more expensive than it is worth to aggressors. Whether this condition can be satisfied for all countries simultaneously depends as shown in this paper on relative efficacy of military offense versus defense, the aggregate of wealth among nations and its distribution, and the benefits a conqueror may obtain from conquest, including the duration of these benefits. The paper shows how these factors fit together to determine the sustainability and stability of the international distribution of property as embodied in the configuration of sovereign states.     

ECONOMIC GROWTH AND VIOLENT INTERNATIONAL CONFLICT: 1875–1999

This paper extends the joint product model of military alliances to apply to the new strategic doctrine adopted by NATO in the 1990s. In particular, a choice must be made between protecting one's own territory and pooling forces for an alliancewide rapid reaction force. This new model accounts for a host of externalities and their implications for burden sharing, full financing, and allocative efficiency. The Pigouvian taxes that adjust for force thinning and attack deflection are shown to finance optimal border‐protecting forces under a variety of circumstances. Second‐best considerations arise owing to the pure publicness of rapid reaction forces. The ideal toll arrangement does not currently characterize NATO financing, nor is it likely to do so.     

RETROSPECT AND PROSPECT: TRENDS IN COST AND THEIR IMPLICATIONS FOR UK AEROSPACE

This paper, intended to stimulate debate, suggests that we are at a turning point in the history of the UK military aerospace industry. It argues that there is urgent need for a fresh vision as to how the UK military aerospace industry can both prosper and make its maximum contribution to the defence of Britain. Further, the resulting plans and policies must emphasise the robustness of defence capabilities in a future in which the only thing we can be certain is that it will be very different from the present – especially whenever defence most matters.     

NEGOTIATING NONPROLIFERATION: Scholarship,Pedagogy, and Nuclear Weapons Policy

In nuclear nonproliferation negotiations, many governments pursue multiple objectives, and changes in policy can occur rapidly—and often unexpectedly. For these reasons, understanding nonproliferation requires empathy and imagination rather than just historical fact. This article considers one teaching tool to encourage such insight—simulations—and demonstrates how teaching and scholarship can interact to improve our understanding of the complex decisions and negotiations involved in nuclear nonproliferation. The article consists of five parts: first, it explains the benefits of simulations as both a policy development tool in Washington and as a teaching tool in universities; second, it describes the pedagogical strategy of the Stanford University simulation program; third, it shows how the simulations have identified and highlighted theoretical and substantive insights that are often neglected in scholarly studies of nonproliferation; and fourth, it describes how students are tested to enhance the learning experience from the simulation. Fifth and finally, the article provides concluding observations about how using simulations in the classroom can help scholars develop insights that improve their understanding of real-world nuclear negotiation dynamics and outcomes.