Capacity improvement,penalties, and the fixed charge transportation problem

Capacity improvement and conditional penalties are two computational aides for fathoming subproblems in a branch‐and‐bound procedure. In this paper, we apply these techniques to the fixed charge transportation problem (FCTP) and show how relaxations of the FCTP subproblems can be posed as concave minimization problems (rather than LP relaxations). Using the concave relaxations, we propose a new conditional penalty and three new types of capacity improvement techniques for the FCTP. Based on computational experiments using a standard set of FCTP test problems, the new capacity improvement and penalty techniques are responsible for a three‐fold reduction in the CPU time for the branch‐and‐bound algorithm and nearly a tenfold reduction in the number of subproblems that need to be evaluated in the branch‐and‐bound enumeration tree. © 1999 John Wiley & Sons, Inc. Naval Research Logistics 46: 341–355, 1999     

Coordination of pricing and inventory control across products

We consider the joint pricing and inventory‐control problem for a retailer who orders, stocks, and sells two products. Cross‐price effects exist between the two products, which means that the demand of each product depends on the prices of both products. We derive the optimal pricing and inventory‐control policy and show that this policy differs from the base‐stock list‐price policy, which is optimal for the one‐product problem. We find that the retailer can significantly improve profits by managing the two products jointly as opposed to independently, especially when the cross‐price demand elasticity is high. We also find that the retailer can considerably improve profits by using dynamic pricing as opposed to static pricing, especially when the demand is nonstationary. © 2009 Wiley Periodicals, Inc. Naval Research Logistics, 2009     

Tests for transient means in simulated time series

We present a family of tests to detect the presence of a transient mean in a simulation process. These tests compare variance estimators from different parts of a simulation run, and are based on the methods of batch means and standardized time series. Our tests can be viewed as natural generalizations of some previously published work. We also include a power analysis of the new tests, as well as some illustrative examples. © 1994 John Wiley & Sons, Inc.     

Inventory rotation policies for slow moving items

In this article we present a stochastic model for determining inventory rotation policies for a retail firm which must stock many hundreds of distinctive items having uncertain heterogeneous sales patterns. The model develops explicit decision rules for determining (1) the length of time that an item should remain in inventory before the decision is made on whether or not to rotate the item out of inventory and (2) the minimum sales level necessary for retaining the item in inventory. Two inventory rotation policies are developed, the first of which maximizes cumulative expected sales over a finite planning horizon and the second of which maximizes cumulative expected profit. We also consider the statistical behavior of items having uncertain, discrete, and heterogeneous sales patterns using a two-period prediction methodology where period 1 is used to accumulate information on individual sales rates and this knowledge is then used, in a Bayesian context, to make sales predictions for period 2. This methodology assumes that over an arbitrary time interval sales for each item are Poisson with unknown but stationary mean sales rates and the mean sales rates are distributed gamma across all items. We also report the application of the model to a retail firm which stocks many hundreds of distinctive unframed poster art titles. The application provides some useful insights into the behavior of the model as well as some interesting aspects pertaining to the implementation of the results in a “real-world” situation.     

Use of a classifier in a knowledge-based simulation optimization system

This article defines and develops a simulation optimization system based upon response surface classification and the integration of multiple search strategies. Response surfaces are classified according to characteristics that indicate which search technique will be most successful. Typical surface characteristics include statistical measures and topological features, while search techniques encompass response surface methodology, simulated annealing, random search, etc. The classify-then-search process flow and a knowledge-based architecture are developed and then demonstrated with a detailed computer example. The system is useful not only as an approach to optimizing simulations, but also as a means for integrating search techniques and thereby providing the user with the most promising path toward an optimal solution. © 1995 John Wiley & Sons, Inc.     

Note: A local-search heuristic for large set-covering problems

In this note we describe a local-search heuristic (LSH) for large non-unicost set-covering problems (SCPs). The new heuristic is based on the simulated annealing algorithm and uses an improvement routine designed to provide low-cost solutions within a reasonable amount of CPU time. The solution costs associated with the LSH compared very favorably to the best previously published solution costs for 20 large SCPs taken from the literature. In particular, the LSH yielded new benchmark solutions for 17 of the 20 test problems. We also report that, for SCPs where column cost is correlated with column coverage, the new heuristic provides solution costs competitive with previously published results for comparable problems. © 1995 John Wiley & Sons, Inc.     

A simulated annealing approach to the cyclic staff-scheduling problem

This article presents the application of a simulated annealing heuristic to an NP-complete cyclic staff-scheduling problem. The new heuristic is compared to branch-and-bound integer programming algorithms, as well as construction and linear programming-based heuristics. It is designed for use in a continuously operating scheduling environment with the objective of minimizing the number of employees necessary to satisfy forecast demand. The results indicate that the simulated annealing-based method tends to dominate the branch-and-bound algorithms and the other heuristics in terms of solution quality. Moreover, the annealing algorithm exhibited rapid convergence to a low-cost solution. The simulated annealing heuristic is executed in a single program and does not require mathematical programming software. © 1993 John Wiley & Sons, Inc.     

A theoretical justification for an increasing average failure rate strength distribution in fibrous composites

A general model for the failure of fibrous composite materials is described. It is shown to contain some of the well-known models in the literature. The composite material is viewed as a coherent system of independent identically distributed component strengths. Under the assumption that the applied load is redistributed “homotonically” to the unfailed components upon the failure of a component (an individual fiber segment) and that the distributions of component strengths are IFRA, it is shown that the system (composite) strength distribution is also IFRA. Examples are given using carbon reinforced composite data to illustrate the IFRA property.     

Damage functions and estimates of fratricide and collateral damage

There are multiple damage functions in the literature to estimate the probability that a single weapon detonation destroys a point target. This paper addresses differences in the tails of four of the more popular damage functions. These four cover the asymptotic tail behaviors of all monotonically decreasing damage functions with well‐behaved hazard functions. The differences in estimates of probability of kill are quite dramatic for large aim‐point offsets. This is particularly important when balancing the number of threats that can be engaged with the chances of fratricide and collateral damage. In general, analysts substituting one damage function for another may badly estimate kill probabilities in offset‐aiming, which could result in poor doctrine. © 2003 Wiley Periodicals, Inc. Naval Research Logistics 50: 306–321, 2003.