Partial equilibrium in risk‐based production decisions

Characteristically, a small subset of operational problems admit risk neutrality when contingent claims methodology were used in their analysis. That is, for the majority of manufacturing and production problems, operating cash flows are not directly linked to prices of traded assets. However, to the extent that correlations can be estimated, the methodology's applicability to a broader set of operational problems is supported. Our article addresses this issue with the objective of extending the use of contingent claims techniques to a larger set of operational problems. In broad terms, this objective entails a partial equilibrium approach to the problem of valuing uncertain cash flows. To this end, we assume risk aversion and cast our approach within Merton's intertemporal capital asset pricing model. In this context, we formulate a “generic” production valuation model that is framed as an exercise in stochastic optimal control. The model is versatile in its characterization and can easily be adapted to accommodate a wide‐ranging set of risk‐based operational problems where the underlying sources of uncertainty are not traded. To obtain results, the model is recast as a stochastic dynamic program to be solved numerically. The article addresses a number of fundamental issues in the analysis risk based decision problems in operations. First, in the approach provided, decisions are analyzed under a properly defined risk structure. Second, the process of analysis leads to suitably adjusted probability distributions through which, appropriately discounted expectations are derived. Third, through consolidating existing concepts into a standard and adaptable framework, we extend the applicability of contingent claims methodology to a broader set of operational problems. The approach is advantageous as it obviates the need for exogenously specifying utility functions or discount rates.© 2011 Wiley Periodicals, Inc. Naval Research Logistics, 2011     

Civil–military relations and organisational preferences regarding the use of the military in Chinese foreign policy: insights from the debate on MOOTW

ABSTRACT

This article analyses the positions of the Chinese civilian leaders and military elites on Military Operations Other Than War in order to shed light on their preferences about the use of the armed forces in foreign policy between the late 1990s and the early 2010s. Over time, a significant divergence developed between civilians and soldiers until 2011, when the Libyan crisis happened. The study also prompts important considerations about our understanding of civil–military relations in China and future role of the People’s Liberation Army as a tool of statecraft in foreign policy.     

Becoming a disarmament champion: the Austrian crusade against nuclear weapons

ABSTRACT

The making of the Treaty on the Prohibition of Nuclear Weapons (TPNW) has put Austria and its involvement in nuclear disarmament in the spotlight. This study highlights several factors that led Austria to become a prominent voice in nuclear-disarmament debates. First, its involvement dovetails with the emphasis on humanitarian disarmament it has promoted since the 1990s. Second, a strong antinuclear identity pervades Austrian society. This “nuclear allergy” combines antimilitarism inherited from the Cold War and, more broadly, an aversion to nuclear power, including for energy purposes. These two considerations form the background to the increased activism of the Austrian Foreign Ministry on nuclear disarmament in international fora. But, equally, Austria’s crusade for the TPNW can be attributed to the engagement of a small team of diplomats implementing personal as well as national preferences in favor of disarmament.     

Organizing for the ‘gray zone’ fight: early Cold War realities and the CIA’s Directorate of Operations

ABSTRACT

Despite its portrayal as something new, the concept of the ‘gray zone’ is not novel. It was the Cold War battleground in which the USA and the Soviet Union waged rival unconventional campaigns, and it was there that the newly formed Central Intelligence Agency (CIA) was given responsibility for operating. This was not the organization’s original purpose, but Cold War exigencies forced Washington to improvise and build an organization with unique capabilities. These early years shaped the CIA’s operations directorate, creating two distinct cultures within the larger agency, one focused on intelligence collection and the other focused on covert action.     

Cyber-weapons in nuclear counter-proliferation

ABSTRACT

Under what conditions are cyber-weapons effective in nuclear counter-proliferation? With continued interest in nuclear proliferation professed by Iran, North Korea, and Saudi Arabia, a discussion of the effectiveness of counter-proliferation measures remains relevant. Cyber-attacks as military option in a state-on-state conflict still requires additional corroborating evidence to make conclusions about its long-term effectiveness. This work analyses the general applicability of cyber-weapons and their usefulness in nuclear counter-proliferation. Through a comparative case study of Operation Orchard, Stuxnet, and recent “Left-of-Launch” operations against North Korea, the essay finds that cyber-operations are not particularly effective against nuclear programmes that are in the later stages of their development. They can disrupt and delay a nuclear programme temporarily, if the attack remains clandestine, but cannot halt nuclear proliferation all together. However, effectiveness increases if they are used in combination with conventional weapons. The article addresses a topic of interest to national-level decision-makers: whether cyber-operations can and should play a role in nuclear counter-proliferation.     

United States defence contractors and the future of military operations

ABSTRACT

The United States’ global strategic outlook has shifted markedly since the end of major combat operations in Iraq and Afghanistan. As the United States’ strategic posture shifts, the nature of military operations is simultaneously changing rapidly. Many analysts predict that cyber-operations, autonomous weapons systems, artificial intelligence, and clandestine special forces operations will be central features in future conflicts. Although often overlooked by scholars and policy analysts, defence contractors are integral to the development and implementation of these emerging categories of warfare. This inquiry examines the evolving nature of the American defence industry and the roles corporations play in current theatres of conflict. Surprisingly, rather than becoming less reliant on defence contractors after their much-maligned performance in the wars in Iraq and Afghanistan, American military and intelligence agencies have become more dependent on the private sector as technology becomes increasingly central to warfare.     

Pragmatism over principle: US intervention and burden shifting in Somalia, 1992–1993

ABSTRACT

The conventional wisdom about the 1992 US intervention in Somalia is that it was a quintessentially humanitarian mission pushed by President George H. W. Bush. This article challenges that interpretation, drawing on newly declassified documents. The Somalia intervention, I argue, was largely a pragmatic response to concerns held by the US military. In late 1992, as the small UN mission in Somalia was collapsing, senior American generals worried about being drawn into the resulting vacuum. Hence they reluctantly recommended a robust US intervention, in the expectation that this would allow the UN to assemble a larger peacekeeping force that would take over within months. The intervention ultimately failed, but the military learned useful lessons from this experience on how to achieve smoother UN handoffs in the future and thus effectively shift longer-term stabilisation burdens to the international community.     

Building the Somali National Army: Anatomy of a failure, 2008–2018

ABSTRACT

Over a decade of security force assistance (SFA) initiatives to build an effective Somali National Army (SNA) failed because of the interrelated effects of political, contextual and operational challenges. The key political challenges were interest asymmetry between international actors and Somali elites, insufficient focus on institution-building and a lack of donor coordination. The principal contextual challenges in Somalia were the legacies of two decades of state collapse and the negative effects of clan dynamics. The main operational challenges were building an army while simultaneously fighting a war, the complexities of military integration, and the severe capability gaps afflicting the SNA.     

军用机场阵地对抗不可预见作战的伪装策略

相对固定的军力部署会提前暴露军事意图。为避免此种情况，美军在2018年《国防战略报告》中提出要实现作战的不可预见性。未来美军不可预见的动态军事力量部署一定程度上增加了军事斗争准备难度。为提升军队机场阵地战场生存能力，有必要针对性地调整应对策略，增强对抗“不可预见作战”的能力。本文着眼军用机场阵地，从三个方面分析对抗不可预见作战的伪装策略：首先阐述不可预见作战的特点，其次分析在“不可预见作战”条件下，现有机场阵地在伪装方面的短板，最后提出对抗“不可预见作战”的伪装策略。通过分析认为，为对抗美军新的作战构想，军事机场阵地伪装策略应从战时应用调整为平战结合，应更加侧重平时的伪装训练和伪装工程建设。