Incomplete contracting and target‐cost pricing

Procurement of advanced technology defence equipment requires appropriate contractual arrangements to achieve efficient R&D investments. This paper analyses the optimality of target‐cost and fixed price contracts and shows that target‐cost pricing can achieve a first best where both fixed‐price contracts and cost reimbursement fail to do so. The main message of this paper is that in incomplete contracting optimality may sometimes be achieved by arrangements which combine several formulae which, individually, would fail to achieve efficiency.     

新疆少数民族教育政策的发展历程研究

新中国成立以来,党和国家采取了一系列特殊政策和措施,促进民族教育事业快速发展,取得了举世瞩目的成就,为各少数民族培养了数以百万计的各级各类专业人才。本文对新中国成立以来的新疆少数民族教育政策作了分阶段的梳理,总结了民族教育政策的发展变化及特点,并结合当前民族教育政策存在的问题,提出了完善新疆少数民族教育政策的对策建议。     

Dynamic regulation on innovation and adoption of green technology with information asymmetry

This study investigates a regulator's dynamic policy to motivate firms' research on and adoption of green technology. In the proposed model, a firm makes unobservable efforts and can hide the technology's arrival from the regulator to avoid adoption costs. We find that the optimal policy follows a simple structure and induces part-time efforts, rather than the maximal effort reported in previous studies. In particular, the regulator should offer no subsidy before the arrival of a technology report, provide a one-time subsidy contingent upon that report, and always set a termination deadline. At the deadline, the firm is forced to select an external option that is associated with social costs. The optimal report-based subsidy decreases with time. Under the optimal policy, the firm works until an effort deadline, makes no effort thereafter, and reports the technology as soon as it arrives. This study also characterizes the necessary and sufficient conditions under which the optimal policy reduces to one that leads, in terms of throughout time, to effort that is maximal or minimal. Our results indicate that policymakers should implement a policy that compensates firms more in the present and less in the future.     

系统UUT诊断策略设计的工程化原则与实践

分析了型号系统研制中推广应用“被测对象(UUT,unit under test)测试点与诊断策略设计与分析技术”的必要性和重要性。重点介绍了一种对UUT测试点与诊断策略进行设计与分析的简便有效的工程化方法,以及在应用中的实践经验与体会。     

Performance evaluation of a production/inventory system with periodic review and endogenous lead times

This paper considers a discrete time, single item production/inventory system with random period demands. Inventory levels are reviewed periodically and managed using a base‐stock policy. Replenishment orders are placed with the production system which is capacitated in the sense that there is a single server that sequentially processes the items one at a time with stochastic unit processing times. In this setting the variability in demand determines the arrival pattern of production orders at the queue, influencing supply lead times. In addition, the inventory behavior is impacted by the correlation between demand and lead times: a large demand size corresponds to a long lead time, depleting the inventory longer. The contribution of this paper is threefold. First, we present an exact procedure based on matrix‐analytic techniques for computing the replenishment lead time distribution given an arbitrary discrete demand distribution. Second, we numerically characterize the distribution of inventory levels, and various other performance measures such as fill rate, base‐stock levels and optimal safety stocks, taking the correlation between demand and lead times into account. Third, we develop an algorithm to fit the first two moments of the demand and service time distribution to a discrete phase‐type distribution with a minimal number of phases. This provides a practical tool to analyze the effect of demand variability, as measured by its coefficient of variation, on system performance. We also show that our model is more appropriate than some existing models of capacitated systems in discrete time. © 2007 Wiley Periodicals, Inc. Naval Research Logistics, 2007     

Some probability functions in reliability and their applications

There has been much research on the general failure model recently. In the general failure model, when the unit fails at its age t, Type I failure (minor failure) occurs with probability 1 ? p(t) and Type II failure (catastrophic failure) occurs with probability p(t). In the previous research, some specific shapes (constant, non‐decreasing, or bathtub‐shape) on the probability function p(t) are assumed. In this article, general results on some probability functions are obtained and applied to study the shapes of p(t). The results are also applied to determining the optimal inspection and allocation policies in maintenance problems. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2007     

Bayesian strategies for dynamic pricing in e‐commerce

E‐commerce platforms afford retailers unprecedented visibility into customer purchase behavior and provide an environment in which prices can be updated quickly and cheaply in response to changing market conditions. This study investigates dynamic pricing strategies for maximizing revenue in an Internet retail channel by actively learning customers' demand response to price. A general methodology is proposed for dynamically pricing information goods, as well as other nonperishable products for which inventory levels are not an essential consideration in pricing. A Bayesian model of demand uncertainty involving the Dirichlet distribution or a mixture of such distributions as a prior captures a wide range of beliefs about customer demand. We provide both analytic formulas and efficient approximation methods for updating these prior distributions after sales data have been observed. We then investigate several strategies for sequential pricing based on index functions that consider both the potential revenue and the information value of selecting prices. These strategies require a manageable amount of computation, are robust to many types of prior misspecification, and yield high revenues compared to static pricing and passive learning approaches. © 2006 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     

Optimal pricing and scheduling control of product shipping

In this article, we seek to understand how a capacity‐constrained seller optimally prices and schedules product shipping to customers who are heterogeneous on willingness to pay (WTP) and willingness to wait (WTW). The capacity‐constrained seller does not observe each customer's WTP and WTW and knows only the aggregate distributions of WTP and WTW. The seller's problem is modeled as an M/M/N_s queueing model with multiclass customers and multidimensional information screening. We contribute to the literature by providing an optimal and efficient algorithm. Furthermore, we numerically find that customers with a larger waiting cost enjoys a higher scheduling priority, but customers with higher valuation do not necessarily get a higher scheduling priority. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 215–227, 2015     

Tests for homogeneity of distributions of component lifetimes from system lifetime data with known system signatures

In this article, we discuss the problem of testing the homogeneity of distributions of component lifetimes based on system lifetime data when the system signatures are known. Both parametric and nonparametric procedures are developed for this problem. For nonparametric testing, the Mann–Whitney‐type statistic is used, and its performance and limitations are discussed. Next, we assume the component lifetimes to follow exponential distributions and then develop different parametric tests. Exact and asymptotic methods are developed based on the method of moments estimators. A Monte Carlo simulation study is used to compare the performance of different parametric procedures with that of the nonparametric procedure. Based on the results of the simulation study, discussions and practical recommendations are made and finally some concluding remarks are provided. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 550–563, 2015