We demonstrate the need to view in a dynamic context any decision based on limited information. We focus on the use of product costs in selecting the product portfolio. We show how ex post data regarding the actual costs from implementing the decision leads to updating of product cost estimates and potentially trigger a revision of the initial decision. We model this updating process as a discrete dynamical system (DDS). We define a decision as informationally consistent if it is a fixed-point solution to the DDS. We employ numerical analysis to characterize the existence and properties of such solutions. We find that fixed points are rare, but that simple heuristics find them often and quickly. We demonstrate the usefulness and robustness of our methodology by examining the interaction of limited information with multiple decision rules (heuristics) and problem features (size of product portfolio, profitability of product markets). We discuss implications for research on cost systems.
{"title":"Obtaining Informationally Consistent Decisions When Computing Costs with Limited Information","authors":"Vic Anand, Ramji Balakrishnan, Eva Labro","doi":"10.2139/ssrn.2827089","DOIUrl":"https://doi.org/10.2139/ssrn.2827089","url":null,"abstract":"We demonstrate the need to view in a dynamic context any decision based on limited information. We focus on the use of product costs in selecting the product portfolio. We show how ex post data regarding the actual costs from implementing the decision leads to updating of product cost estimates and potentially trigger a revision of the initial decision. We model this updating process as a discrete dynamical system (DDS). We define a decision as informationally consistent if it is a fixed-point solution to the DDS. We employ numerical analysis to characterize the existence and properties of such solutions. We find that fixed points are rare, but that simple heuristics find them often and quickly. We demonstrate the usefulness and robustness of our methodology by examining the interaction of limited information with multiple decision rules (heuristics) and problem features (size of product portfolio, profitability of product markets). We discuss implications for research on cost systems.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116189887","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Prospect theory shows that human behavior in decision making can often be characterized by an S-shaped utility function. In this paper, we consider a periodic review inventory system with an exponential-type S-shaped utility function. The objective is to maximize the total expected utility over the planning horizon. We show that, for the single-period case without setup cost, a state-dependent order-up-to policy is optimal, to which it is not difficult to obtain the optimal order-up-to level. For the multi-period case without setup costs, we partially characterize the optimal policy when the demand distributions are log-concave, and present an iterative algorithm for computing the optimal policy. Numerical studies are conducted to illustrate the impact of parameters on the system performance and optimal policies. The results show that the ordering behavior of the inventory manager can be significantly different from those derived from the classical models. It is also shown that the approaches in this paper can be applied to both single-period and multi-period systems with setup costs for obtaining optimal policies.
{"title":"A Periodic Review Inventory System with S-Shaped Utility Function","authors":"Xiaobo Zhao, Wei Geng, X. Chao, Deng Gao","doi":"10.2139/ssrn.2816197","DOIUrl":"https://doi.org/10.2139/ssrn.2816197","url":null,"abstract":"Prospect theory shows that human behavior in decision making can often be characterized by an S-shaped utility function. In this paper, we consider a periodic review inventory system with an exponential-type S-shaped utility function. The objective is to maximize the total expected utility over the planning horizon. We show that, for the single-period case without setup cost, a state-dependent order-up-to policy is optimal, to which it is not difficult to obtain the optimal order-up-to level. For the multi-period case without setup costs, we partially characterize the optimal policy when the demand distributions are log-concave, and present an iterative algorithm for computing the optimal policy. Numerical studies are conducted to illustrate the impact of parameters on the system performance and optimal policies. The results show that the ordering behavior of the inventory manager can be significantly different from those derived from the classical models. It is also shown that the approaches in this paper can be applied to both single-period and multi-period systems with setup costs for obtaining optimal policies.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132102313","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper considers a general model specification test for nonlinear multivariate cointegrating regressions where the regressor consists of a univariate integrated time series and a vector of stationary time series. The regressors and the errors are generated from the same innovations, so that the model accommodates endogeniety. A new and simple test is proposed and the resulting asymptotic theory is established. The test statistic is constructed based on a natural distance function between a nonparametric estimate and a smoothed parametric counterpart. The asymptotic distribution of the test statistic under the parametric specification is proportional to that of a local-time random variable with a known distribution. In addition, the finite sample performance of the proposed test is evaluated through using both simulated and real data examples.
{"title":"Model Specification Testing for Nonlinear Multivariate Cointegrating Regressions","authors":"Chaohua Dong, Jiti Gao, D. Tjøstheim, Jiying Yin","doi":"10.2139/ssrn.2396967","DOIUrl":"https://doi.org/10.2139/ssrn.2396967","url":null,"abstract":"This paper considers a general model specification test for nonlinear multivariate cointegrating regressions where the regressor consists of a univariate integrated time series and a vector of stationary time series. The regressors and the errors are generated from the same innovations, so that the model accommodates endogeniety. A new and simple test is proposed and the resulting asymptotic theory is established. The test statistic is constructed based on a natural distance function between a nonparametric estimate and a smoothed parametric counterpart. The asymptotic distribution of the test statistic under the parametric specification is proportional to that of a local-time random variable with a known distribution. In addition, the finite sample performance of the proposed test is evaluated through using both simulated and real data examples.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117286255","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The OR/MS system has multiple actors located in diverse communities: industry (end users), consulting and academia (education research). The main flows between communities in the system are based on the exchange of problems for solutions using diverse knowledge stocks (e.g. mathematics, statistics, systems thinking) as well as the movement of graduates. However, there are disagreements on the views about the OR/MS system as well as issues that have affected the OR/MS field in recent years reducing its relative stance within the rest of disciplines, students and managers. This paper proposes a framework based on a set of activities within OR/MS communities and offer a set of multidimensional measures that can be employed to evaluate the communities over time providing additional evidence for the discussion about the development of OR/MS. Five OR communities located in five universities in the United Kingdom are employed to explore the state of the OR communities using the framework. The results confirm the existence of a broad spectrum and applicability of research in diverse fields but the broad spectrum is somehow diluted among subject areas and not captured by traditional OR perspectives. The findings show a declining position in business schools, dispersion of practitioners and OR graduates, who are not linked to OR communities. Professional societies may need to find synergies with other societies in close subject areas. OR communities attempt to be relevant to economic and social processes through their outputs but their actions are scattered.
{"title":"Analysing the Operational Research/Management Science System: Insights from Small Academic Communities in the United Kingdom","authors":"M. Kunc","doi":"10.2139/ssrn.2805103","DOIUrl":"https://doi.org/10.2139/ssrn.2805103","url":null,"abstract":"The OR/MS system has multiple actors located in diverse communities: industry (end users), consulting and academia (education research). The main flows between communities in the system are based on the exchange of problems for solutions using diverse knowledge stocks (e.g. mathematics, statistics, systems thinking) as well as the movement of graduates. However, there are disagreements on the views about the OR/MS system as well as issues that have affected the OR/MS field in recent years reducing its relative stance within the rest of disciplines, students and managers. This paper proposes a framework based on a set of activities within OR/MS communities and offer a set of multidimensional measures that can be employed to evaluate the communities over time providing additional evidence for the discussion about the development of OR/MS. Five OR communities located in five universities in the United Kingdom are employed to explore the state of the OR communities using the framework. The results confirm the existence of a broad spectrum and applicability of research in diverse fields but the broad spectrum is somehow diluted among subject areas and not captured by traditional OR perspectives. The findings show a declining position in business schools, dispersion of practitioners and OR graduates, who are not linked to OR communities. Professional societies may need to find synergies with other societies in close subject areas. OR communities attempt to be relevant to economic and social processes through their outputs but their actions are scattered.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122604354","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents a study involving 15 universities in three different countries: Chile, Colombia and Peru. The sample of universities covered the main universities in three large Latin American countries. Our findings suggest that Operational Research is mainly taught in School of Engineering which limits its impact on management and business students and practitioners. Although Operational Research is embedded in other subject areas such as agribusiness, forestry, mining and supply chain management, its application is restricted to operational issues. Moreover, the findings indicate there is a tool-orientation versus problem orientation in teaching limiting the impact of graduates as problem solvers. There seems to be a strong relationship between size of the Operational Research academic group and its level of activity. Operational Research national societies need further development to promote Operational Research beyond academic groups. In other words, the study suggests the level of activity in the areas of research, teaching and dissemination is small affecting the demand from end users.
{"title":"Operational Research in Developing Countries: A Review of Latin American Countries","authors":"M. Kunc","doi":"10.2139/ssrn.2805101","DOIUrl":"https://doi.org/10.2139/ssrn.2805101","url":null,"abstract":"This paper presents a study involving 15 universities in three different countries: Chile, Colombia and Peru. The sample of universities covered the main universities in three large Latin American countries. Our findings suggest that Operational Research is mainly taught in School of Engineering which limits its impact on management and business students and practitioners. Although Operational Research is embedded in other subject areas such as agribusiness, forestry, mining and supply chain management, its application is restricted to operational issues. Moreover, the findings indicate there is a tool-orientation versus problem orientation in teaching limiting the impact of graduates as problem solvers. There seems to be a strong relationship between size of the Operational Research academic group and its level of activity. Operational Research national societies need further development to promote Operational Research beyond academic groups. In other words, the study suggests the level of activity in the areas of research, teaching and dissemination is small affecting the demand from end users.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"83 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132969756","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper shows that the use of excessively aggregated organizational units in a benchmarking study may skew the evaluation. The most aggregated or consolidated units receive excessively harsh evaluations. The paper also proposes a method for compensating the possible consolidation bias by calculating the so-called Potential Process Efficiency PPE. Finally,the paper applies the proposed method to the benchmarking model used by the Brazilian Electricity Regulatory Agency (ANEEL). Because of the size of the Brazilian DSOs and the heterogeneity of their service areas, it is highly likely that many of the DSOs are in fact subject to biased evaluations.
{"title":"Aggregation Bias in Benchmarking: Measuring Potential Process Efficiency","authors":"P. Bogetoft, A. Lopes","doi":"10.2139/SSRN.2773285","DOIUrl":"https://doi.org/10.2139/SSRN.2773285","url":null,"abstract":"This paper shows that the use of excessively aggregated organizational units in a benchmarking study may skew the evaluation. The most aggregated or consolidated units receive excessively harsh evaluations. The paper also proposes a method for compensating the possible consolidation bias by calculating the so-called Potential Process Efficiency PPE. Finally,the paper applies the proposed method to the benchmarking model used by the Brazilian Electricity Regulatory Agency (ANEEL). Because of the size of the Brazilian DSOs and the heterogeneity of their service areas, it is highly likely that many of the DSOs are in fact subject to biased evaluations.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130218574","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We present a game-theoretic model to analyze the role of two major biofuel policies in the U.S., namely mandates and subsidies, and their implications to biofuel industry development. By characterizing the farmers' land use decision (land allocation among food, energy, and reservation) and biofuel firm's mandate compliance strategy (whether to comply with the mandate or not), we identify the complementarity roles of mandate and subsidy. We further illustrate the impact of coordination in the two policy instruments; lack of coordination may result in excessive biofuel mandate in the early stage of industry development, while it may lead to insufficient mandate during the matured stage. With a case study based on the U.S. Midwest, we address recent trends in the U.S. biofuel industry and further discuss related policy insights.
{"title":"Food-Energy-Environment Trilemma: Policy Impacts on Farmland Use and Biofuel Industry Development","authors":"Xin Wang, M. Lim, Y. Ouyang","doi":"10.2139/ssrn.2268688","DOIUrl":"https://doi.org/10.2139/ssrn.2268688","url":null,"abstract":"We present a game-theoretic model to analyze the role of two major biofuel policies in the U.S., namely mandates and subsidies, and their implications to biofuel industry development. By characterizing the farmers' land use decision (land allocation among food, energy, and reservation) and biofuel firm's mandate compliance strategy (whether to comply with the mandate or not), we identify the complementarity roles of mandate and subsidy. We further illustrate the impact of coordination in the two policy instruments; lack of coordination may result in excessive biofuel mandate in the early stage of industry development, while it may lead to insufficient mandate during the matured stage. With a case study based on the U.S. Midwest, we address recent trends in the U.S. biofuel industry and further discuss related policy insights.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115176512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In developing economies, smallholders use their private knowledge and exert costly effort to control their output of high quality (and low quality) crop so as to maximize profit. To improve farmers' productivity, NGOs and governments are advocating various knowledge sharing and learning platforms so that farmers can share with and learn from each other about various farming techniques. Putting altruism aside, we examine the economic implications for heterogeneous farmers to share their private farming knowledge voluntarily with other farmers under (implicit) competition. By analyzing a multi-person sequential game, we provide a plausible reason to explain why (and conditions under which) knowledge sharing can be beneficial even when each farmer's profit depends on the total output. We find that the voluntary knowledge shared level is always lower than or equal to the "first best" knowledge shared level that maximizes the farmer welfare under centralized control. This finding motivates us to develop a reward mechanism to entice farmers to increase their knowledge shared level in a decentralized system so as to maximize the farmer welfare and reduce income inequality. Upon examining different mechanisms, we establish a quota-based reward mechanism that can entice farmers to share their knowledge up to the first-best level voluntarily.
{"title":"Knowledge Sharing and Learning Among Smallholders in Developing Economies: Implications, Incentives, and Reward Mechanisms","authors":"Shihong Xiao, Ying‐ju Chen, Christopher S. Tang","doi":"10.2139/ssrn.2750337","DOIUrl":"https://doi.org/10.2139/ssrn.2750337","url":null,"abstract":"In developing economies, smallholders use their private knowledge and exert costly effort to control their output of high quality (and low quality) crop so as to maximize profit. To improve farmers' productivity, NGOs and governments are advocating various knowledge sharing and learning platforms so that farmers can share with and learn from each other about various farming techniques. Putting altruism aside, we examine the economic implications for heterogeneous farmers to share their private farming knowledge voluntarily with other farmers under (implicit) competition. By analyzing a multi-person sequential game, we provide a plausible reason to explain why (and conditions under which) knowledge sharing can be beneficial even when each farmer's profit depends on the total output. We find that the voluntary knowledge shared level is always lower than or equal to the \"first best\" knowledge shared level that maximizes the farmer welfare under centralized control. This finding motivates us to develop a reward mechanism to entice farmers to increase their knowledge shared level in a decentralized system so as to maximize the farmer welfare and reduce income inequality. Upon examining different mechanisms, we establish a quota-based reward mechanism that can entice farmers to share their knowledge up to the first-best level voluntarily.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127452658","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-03-01DOI: 10.4018/IJITPM.2016010105
R. Ahmed, Noor Azmi bin Mohamad
Literature reveals a number of confusions within the area of project management regarding the use of terminology and differing interpretations, concerning leadership competencies and leadership styles. In project management literature, many empirical studies have examined the influence of leadership competencies or styles, but yet any substantial review study has rarely been conducted to differentiate between leadership competencies and styles. This study aims to differentiate between leadership competencies and leadership styles in project management literature. This study found that the project manager's leadership terms including competence, competency, competencies, and styles have frequently been used in project management literature. Furthermore, literature has been synthesized to provide more familiarity and understanding on leadership competencies and styles. Findings indicate that leadership competencies and styles are two different things but a few characteristics are common between both the terms. Furthermore, leadership competencies are more suitable for task-oriented activities and leadership styles are more appropriate for relationship-oriented factors. This study has implications for the future directions to identify differences between project manger's average and superior performance through comparison of leadership competencies and styles.
{"title":"Differentiating between Leadership Competencies and Styles: A Critical Review in Project Management Perspective","authors":"R. Ahmed, Noor Azmi bin Mohamad","doi":"10.4018/IJITPM.2016010105","DOIUrl":"https://doi.org/10.4018/IJITPM.2016010105","url":null,"abstract":"Literature reveals a number of confusions within the area of project management regarding the use of terminology and differing interpretations, concerning leadership competencies and leadership styles. In project management literature, many empirical studies have examined the influence of leadership competencies or styles, but yet any substantial review study has rarely been conducted to differentiate between leadership competencies and styles. This study aims to differentiate between leadership competencies and leadership styles in project management literature. This study found that the project manager's leadership terms including competence, competency, competencies, and styles have frequently been used in project management literature. Furthermore, literature has been synthesized to provide more familiarity and understanding on leadership competencies and styles. Findings indicate that leadership competencies and styles are two different things but a few characteristics are common between both the terms. Furthermore, leadership competencies are more suitable for task-oriented activities and leadership styles are more appropriate for relationship-oriented factors. This study has implications for the future directions to identify differences between project manger's average and superior performance through comparison of leadership competencies and styles.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132693632","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the research presented in this paper, we analyse a model of Fish Wars, first introduced by Levhari and Mirman, restricted to finite time horizon. We study it both by analytic and numerical methods and compare results. Our study suggests possibility of using numerical methods for dynamic games with singularities in payoffs.
{"title":"Numerical Versus Analytic Calculation of Optima and Equilibria in Fish Wars Model with Finite Time Horizon","authors":"A. Wiszniewska-Matyszkiel, Rajani Singh","doi":"10.2139/ssrn.2778639","DOIUrl":"https://doi.org/10.2139/ssrn.2778639","url":null,"abstract":"In the research presented in this paper, we analyse a model of Fish Wars, first introduced by Levhari and Mirman, restricted to finite time horizon. We study it both by analytic and numerical methods and compare results. Our study suggests possibility of using numerical methods for dynamic games with singularities in payoffs.","PeriodicalId":275253,"journal":{"name":"Operations Research eJournal","volume":"139 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126171354","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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