Optimal ordering policies for a product that perishes in two periods subject to stochastic demand

This paper considers the problem of computing optimal ordering policies for a product that has a life of exactly two periods when demand is random. Initially costs are charged against runouts (stockouts) and outdating (perishing). By charging outdating costs according to the expected amount of outdating one period into the future, a feasible one period model is constructed. The central theorem deals with the n-stage dynamic problem and demonstrates the appropriate cost functions are convex in the decision variable and also provides bounds on certain derivatives. The model is then generalized to include ordering and holding costs. The paper is concluded with a discussion of the infinite horizon problem.     

The Problem of Weak Nuclear States

Governments are increasingly recognizing the problem posed by internally weak nuclear-capable states. The problem, however, is under-theorized. This article brings together literature on sovereignty and international order, the nonproliferation regime, and weak states, and introduces new concepts to provide a more structured understanding of this problem. Insight comes from focusing attention on the function and governance of two nuclear estates (termed the production and operational estates), and on their resilience to decay and disorder occurring within the state and society. Drawing on empirical observation, the authors suggest a typology of weakness in nuclear states, involving state fragmentation typified by the former Soviet Union, the “hard weak state” typified by North Korea, and the internally conflicted state typified by Pakistan. Although these types give rise to distinctive difficulties, their alleviation depends heavily on the maintenance of internal authority within the state and estates, the presence or absence of cooperative relations, and the international regulatory framework's vitality.     

Excess capacity in weapons production: An empirical analysis∗ †

This paper analyzes a set of observations by the Congressional Budget Office (CBO) on individual weapons systems regarding whether large amounts of excess capacity exist and whether short run average cost (SRAC) appears to be severely decreasing. It is shown that the amount of excess capacity and steepness of SRAC are essentially independent of output rate. It is then argued that this suggests that production is occurring in inefficiently large plants—i.e.—off the long run cost curve.     

On the Road to the 2015 NPT Review Conference

The second session of the Preparatory Committee for the 2015 Review Conference (RevCon) of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) highlighted two issues in particular—progress toward a Middle East Weapons of Mass Destruction–Free Zone and the Joint Statement on the humanitarian impact of nuclear weapons—that may not only greatly affect the health and vitality of the NPT and the 2015 RevCon, but possibly also have implications for the international nonproliferation regime as a whole. Dr. William Potter, director of the James Martin Center for Nonproliferation Studies, interviewed Ambassador Cornel Feruta, chairman of the 2013 PrepCom, to discuss these and other issues related to the meeting and the future of the treaty and its review process.     

One size does not fit all: personalized incentives in military compensation

A critical element in implementing a compensation scheme including nonmonetary incentives (NMIs) is recognizing that preferences vary widely across Service members. There are at least three sources of variability: across different population classes, across individuals within a population class, and across NMI packages for a particular individual. Surveys across different military communities, ranks, and years of Service show the difficulty of identifying any NMI that has significant value for even 50% of the active duty force. At the same time, approximately 80% of the surveyed Service members expressed a significant positive value for at least one NMI. Therefore, one-size-fits-all incentive packages will not be nearly as effective as more personalized incentive packages. The authors discuss variability in Service member NMI preferences and outline an approach to implementing personalized NMI packages in military compensation through a sealed-bid reverse auction, where Service members select individual NMIs from a “cafeteria-style” menu of options.