Pub Date : 2025-01-13DOI: 10.1016/j.ejor.2025.01.006
Michael Ellington , Maria Kalli
This paper evaluates the role of volatility-free stock market illiquidity proxies in forecasting monthly stock market returns. We adopt a probabilistic approach to multivariate time-series modelling using Bayesian nonparametric vector autoregressions. These models flexibly capture complex joint dynamics among financial variables through data-driven regime switching. Out-of-sample forecasts maintain accuracy as the horizon increases. Adding illiquidity generates statistical improvements in out-of-sample predictive accuracy. We highlight the operational importance of market illiquidity after selecting the most appropriate forecasting model that delivers profitable strategies that outperform a range of multivariate models; as well as the historical mean.
{"title":"Predictive distributions and the market return: The role of market illiquidity","authors":"Michael Ellington , Maria Kalli","doi":"10.1016/j.ejor.2025.01.006","DOIUrl":"10.1016/j.ejor.2025.01.006","url":null,"abstract":"<div><div>This paper evaluates the role of volatility-free stock market illiquidity proxies in forecasting monthly stock market returns. We adopt a probabilistic approach to multivariate time-series modelling using Bayesian nonparametric vector autoregressions. These models flexibly capture complex joint dynamics among financial variables through data-driven regime switching. Out-of-sample forecasts maintain accuracy as the horizon increases. Adding illiquidity generates statistical improvements in out-of-sample predictive accuracy. We highlight the operational importance of market illiquidity after selecting the most appropriate forecasting model that delivers profitable strategies that outperform a range of multivariate models; as well as the historical mean.</div></div>","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"323 1","pages":"Pages 309-322"},"PeriodicalIF":6.0,"publicationDate":"2025-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142990016","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-11DOI: 10.1016/j.ejor.2025.01.004
Leah LeJeune, Navid Ghaffarzadegan, Lauren M. Childs, Omar Saucedo
The recent pandemic emphasized the need to consider the role of human behavior in shaping epidemic dynamics. In particular, it is necessary to extend beyond the classical epidemiological structures to fully capture the interplay between the spread of disease and how people respond. Here, we focus on the challenge of incorporating change in human behavior in the form of “risk response” into compartmental epidemiological models, where humans adapt their actions in response to their perceived risk of becoming infected. The review examines 37 papers containing over 40 compartmental models, categorizing them into two fundamentally distinct classes: exogenous and endogenous approaches to modeling risk response. While in exogenous approaches, human behavior is often included using different fixed parameter values for certain time periods, endogenous approaches seek for a mechanism internal to the model to explain changes in human behavior as a function of the state of disease. We further discuss two different formulations within endogenous models as implicit versus explicit representation of information diffusion. This analysis provides insights for modelers in selecting an appropriate framework for epidemic modeling.
{"title":"Formulating human risk response in epidemic models: Exogenous vs endogenous approaches","authors":"Leah LeJeune, Navid Ghaffarzadegan, Lauren M. Childs, Omar Saucedo","doi":"10.1016/j.ejor.2025.01.004","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.01.004","url":null,"abstract":"The recent pandemic emphasized the need to consider the role of human behavior in shaping epidemic dynamics. In particular, it is necessary to extend beyond the classical epidemiological structures to fully capture the interplay between the spread of disease and how people respond. Here, we focus on the challenge of incorporating change in human behavior in the form of “risk response” into compartmental epidemiological models, where humans adapt their actions in response to their perceived risk of becoming infected. The review examines 37 papers containing over 40 compartmental models, categorizing them into two fundamentally distinct classes: exogenous and endogenous approaches to modeling risk response. While in exogenous approaches, human behavior is often included using different fixed parameter values for certain time periods, endogenous approaches seek for a mechanism internal to the model to explain changes in human behavior as a function of the state of disease. We further discuss two different formulations within endogenous models as implicit versus explicit representation of information diffusion. This analysis provides insights for modelers in selecting an appropriate framework for epidemic modeling.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"71 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142990015","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-10DOI: 10.1016/j.ejor.2025.01.003
Sheng Dai, Natalia Kuosmanen, Timo Kuosmanen, Juuso Liesiö
Optimal allocation of resources across sub-units in the context of centralized decision-making systems such as bank branches or supermarket chains is a classical application of operations research and management science. In this paper, we develop quantile allocation models to examine how much the output and productivity could potentially increase if the resources were efficiently allocated between units. We increase robustness to random noise and heteroscedasticity by utilizing the local estimation of multiple production functions using convex quantile regression. The quantile allocation models then rely on the estimated shadow prices instead of detailed data of units and allow the entry and exit of units. Our empirical results on Finland’s business sector show that the marginal products of labor and capital largely depart from their respective marginal costs and also reveal that the current allocation of resources is far from optimal. A large potential for productivity gains could be achieved through better allocation, especially for the reallocation of capital, keeping the current technology and resources fixed.
{"title":"Optimal resource allocation: Convex quantile regression approach","authors":"Sheng Dai, Natalia Kuosmanen, Timo Kuosmanen, Juuso Liesiö","doi":"10.1016/j.ejor.2025.01.003","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.01.003","url":null,"abstract":"Optimal allocation of resources across sub-units in the context of centralized decision-making systems such as bank branches or supermarket chains is a classical application of operations research and management science. In this paper, we develop quantile allocation models to examine how much the output and productivity could potentially increase if the resources were efficiently allocated between units. We increase robustness to random noise and heteroscedasticity by utilizing the local estimation of multiple production functions using convex quantile regression. The quantile allocation models then rely on the estimated shadow prices instead of detailed data of units and allow the entry and exit of units. Our empirical results on Finland’s business sector show that the marginal products of labor and capital largely depart from their respective marginal costs and also reveal that the current allocation of resources is far from optimal. A large potential for productivity gains could be achieved through better allocation, especially for the reallocation of capital, keeping the current technology and resources fixed.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"52 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142990017","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-07DOI: 10.1016/j.ejor.2024.12.039
Navid Mohamadi , Sandra Transchel , Jan C. Fransoo
Reducing food waste in supply chains (SCs) with multiple decision-makers is challenging. A common approach grocery retailers use to reduce waste is requiring manufacturers to only send products with a long remaining shelf life (“minimum life on receipt”-MLOR). However, its impact on manufacturers remains unclear.
To evaluate the effectiveness of MLOR agreements on food waste, we investigate two strategies: (1) collaborating on setting the MLOR level and (2) coordinating the SC via contract. Through collaboration, we analytically show that if the MLOR agreement does not demand solely fresh products, it raises manufacturer profits, enabling potential wholesale price reduction. This might incentivize retailers to collaborate to reduce the MLOR level. We demonstrate that the coordinating strategy can reduce waste in the SC and is most beneficial when the wholesale price is high, and the issuing policy is FIFO. We introduce possible coordination contracts and show that in coordinated SCs, manufacturers always provide the highest MLOR level without requiring any restrictive MLOR agreements.
Governments mainly focus on reducing retail waste and promoting retailers to request higher MLOR. However, these efforts can backfire by creating more waste for manufacturers. Reducing the MLOR allows retailers to negotiate lower wholesale prices, increasing profitability while reducing waste. Although SC coordination is known for reducing inefficiency, it may not be the best strategy for reducing waste, especially when the issuing policy is more LIFO than FIFO. Specifically, while coordination might be a better strategy for online retailers, collaboration can be a better strategy for brick-and-mortar retailers.
{"title":"Coordinate or collaborate? Reducing food waste in perishable-product supply chains","authors":"Navid Mohamadi , Sandra Transchel , Jan C. Fransoo","doi":"10.1016/j.ejor.2024.12.039","DOIUrl":"10.1016/j.ejor.2024.12.039","url":null,"abstract":"<div><div>Reducing food waste in supply chains (SCs) with multiple decision-makers is challenging. A common approach grocery retailers use to reduce waste is requiring manufacturers to only send products with a long remaining shelf life (“minimum life on receipt”-MLOR). However, its impact on manufacturers remains unclear.</div><div>To evaluate the effectiveness of MLOR agreements on food waste, we investigate two strategies: (1) collaborating on setting the MLOR level and (2) coordinating the SC via contract. Through collaboration, we analytically show that if the MLOR agreement does not demand solely fresh products, it raises manufacturer profits, enabling potential wholesale price reduction. This might incentivize retailers to collaborate to reduce the MLOR level. We demonstrate that the coordinating strategy can reduce waste in the SC and is most beneficial when the wholesale price is high, and the issuing policy is FIFO. We introduce possible coordination contracts and show that in coordinated SCs, manufacturers always provide the highest MLOR level without requiring any restrictive MLOR agreements.</div><div>Governments mainly focus on reducing retail waste and promoting retailers to request higher MLOR. However, these efforts can backfire by creating more waste for manufacturers. Reducing the MLOR allows retailers to negotiate lower wholesale prices, increasing profitability while reducing waste. Although SC coordination is known for reducing inefficiency, it may not be the best strategy for reducing waste, especially when the issuing policy is more LIFO than FIFO. Specifically, while coordination might be a better strategy for online retailers, collaboration can be a better strategy for brick-and-mortar retailers.</div></div>","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"323 3","pages":"Pages 795-809"},"PeriodicalIF":6.0,"publicationDate":"2025-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142975191","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-07DOI: 10.1016/j.ejor.2025.01.001
Frank J. Fabozzi, Maria Cristina Recchioni, Roberto Renò
Over the last fifty years, there has been an increasing intersection of methodologies, applications, and contributions at the frontier of finance and operations research. This invited paper selectively reviews this literature, aiming to provide a building block for future research at the intersection between the two fields. Our review revolves around four main themes: option pricing, interest rate and credit risk modeling, investment strategies, and financial econometrics. The review explores possible avenues for future research, particularly related to machine learning, high-dimensional statistics and a renewed behavioral approach.
{"title":"Fifty years at the interface between financial modeling and operations research","authors":"Frank J. Fabozzi, Maria Cristina Recchioni, Roberto Renò","doi":"10.1016/j.ejor.2025.01.001","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.01.001","url":null,"abstract":"Over the last fifty years, there has been an increasing intersection of methodologies, applications, and contributions at the frontier of finance and operations research. This invited paper selectively reviews this literature, aiming to provide a building block for future research at the intersection between the two fields. Our review revolves around four main themes: option pricing, interest rate and credit risk modeling, investment strategies, and financial econometrics. The review explores possible avenues for future research, particularly related to machine learning, high-dimensional statistics and a renewed behavioral approach.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"31 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142990262","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-07DOI: 10.1016/j.ejor.2024.12.045
Qiang Huang, Joshua Ignatius, Huaming Song, Junsong Bian, Canran Gong
Firms often strive to expand their market share beyond their established customer base by launching quality upgrades in their products. They recognize that customers often gauge product quality through online reviews. We develop an analytical model to examine the quality upgrade strategies of two competing firms, revealing two potential market equilibria. In the unilateral upgrading equilibrium where only one firm upgrades, the upgrading firm sees an initial increase in loyal demand, leading to higher prices. This price adjustment, however, may deter potential new customers who turn to the more affordable non-upgrading competitor, referred to as the substitution effect. Despite attracting more loyal customers, the upgrading firm may experience a net loss in broader market share due to the substitution effect. In the bilateral upgrading equilibrium where both firms upgrade and engage in quality competition, the situation becomes akin to a prisoner’s dilemma if loyal customers show indifference to quality improvements. The gains from loyal customers are outweighed by fierce competition for new customers, ultimately disadvantaging both firms. Furthermore, our findings indicate that review-revealed quality difference between the two products leads to a higher degree of quality improvement effort by the high-quality firm, while reducing that of the low-quality firm. Intriguingly, in the unilateral equilibrium, the high-quality firm may not benefit from its review-revealed superior quality, while the low-quality firm may not be disadvantaged, depending on the substitution effect relatively.
{"title":"Impact of loyal and new customer segments on product upgrades: The role of quality differentiation through online reviews","authors":"Qiang Huang, Joshua Ignatius, Huaming Song, Junsong Bian, Canran Gong","doi":"10.1016/j.ejor.2024.12.045","DOIUrl":"https://doi.org/10.1016/j.ejor.2024.12.045","url":null,"abstract":"Firms often strive to expand their market share beyond their established customer base by launching quality upgrades in their products. They recognize that customers often gauge product quality through online reviews. We develop an analytical model to examine the quality upgrade strategies of two competing firms, revealing two potential market equilibria. In the unilateral upgrading equilibrium where only one firm upgrades, the upgrading firm sees an initial increase in loyal demand, leading to higher prices. This price adjustment, however, may deter potential new customers who turn to the more affordable non-upgrading competitor, referred to as the substitution effect. Despite attracting more loyal customers, the upgrading firm may experience a net loss in broader market share due to the substitution effect. In the bilateral upgrading equilibrium where both firms upgrade and engage in quality competition, the situation becomes akin to a prisoner’s dilemma if loyal customers show indifference to quality improvements. The gains from loyal customers are outweighed by fierce competition for new customers, ultimately disadvantaging both firms. Furthermore, our findings indicate that review-revealed quality difference between the two products leads to a higher degree of quality improvement effort by the high-quality firm, while reducing that of the low-quality firm. Intriguingly, in the unilateral equilibrium, the high-quality firm may not benefit from its review-revealed superior quality, while the low-quality firm may not be disadvantaged, depending on the substitution effect relatively.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"56 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142990018","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-06DOI: 10.1016/j.ejor.2024.12.052
Danny Hermelin , Hendrik Molter , Rolf Niedermeier , Michael Pinedo , Dvir Shabtay
Recent research found that fairness plays a key role in customer satisfaction. Therefore, many manufacturing and services industries have become aware of the need to treat customers fairly. Still, there is a huge lack of models that enable industries to make operational decisions fairly, such as a fair scheduling of the customers’ jobs. Our main aim in this research is to provide a unified framework to enable schedulers to make fair decisions in repetitive scheduling environments. For doing so, we consider a set of repetitive scheduling problems involving a set of clients. In each out of consecutive operational periods (e.g. days), each one of the customers submits a job for processing by an operational system. The scheduler’s aim is to provide a schedule for each of the periods such that the quality of service (QoS) received by each of the clients will meet a certain predefined threshold. The QoS of a client may take several different forms, e.g., the number of days that the customer receives its job later than a given due date, the number of times the customer receives his preferred time slot for service, or the sum of waiting times for service. We analyze the single machine variant of the problem for several different definitions of QoS, and classify the complexity of the corresponding problems using the theories of classical and parameterized complexity. We also study the price of fairness, i.e., the loss in the system’s efficiency that results from the need to provide fair solutions.
{"title":"Fairness in repetitive scheduling","authors":"Danny Hermelin , Hendrik Molter , Rolf Niedermeier , Michael Pinedo , Dvir Shabtay","doi":"10.1016/j.ejor.2024.12.052","DOIUrl":"10.1016/j.ejor.2024.12.052","url":null,"abstract":"<div><div>Recent research found that fairness plays a key role in customer satisfaction. Therefore, many manufacturing and services industries have become aware of the need to treat customers fairly. Still, there is a huge lack of models that enable industries to make operational decisions fairly, such as a fair scheduling of the customers’ jobs. Our main aim in this research is to provide a unified framework to enable schedulers to make fair decisions in repetitive scheduling environments. For doing so, we consider a set of repetitive scheduling problems involving a set of <span><math><mi>n</mi></math></span> clients. In each out of <span><math><mi>q</mi></math></span> consecutive operational periods (<em>e.g.</em> days), each one of the customers submits a job for processing by an operational system. The scheduler’s aim is to provide a schedule for each of the <span><math><mi>q</mi></math></span> periods such that the quality of service (QoS) received by each of the clients will meet a certain predefined threshold. The QoS of a client may take several different forms, <em>e.g.</em>, the number of days that the customer receives its job later than a given due date, the number of times the customer receives his preferred time slot for service, or the sum of waiting times for service. We analyze the single machine variant of the problem for several different definitions of QoS, and classify the complexity of the corresponding problems using the theories of classical and parameterized complexity. We also study the price of fairness, i.e., the loss in the system’s efficiency that results from the need to provide fair solutions.</div></div>","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"323 3","pages":"Pages 724-738"},"PeriodicalIF":6.0,"publicationDate":"2025-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142990019","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Although it is generally accepted that more accurate forecasts contribute towards better inventory performance, this relationship may often be weak, also depending on the structural characteristics of the products being forecast, the inventory policy considered, and the underlying expenses, among others. To empirically explore the connection between forecast accuracy and key costs associated with inventory control, namely holding, ordering, and lost sales costs, we consider the data set of the M5 competition and conduct detailed simulations using popular methods to generate quantile forecasts. Our results are analyzed for various setups of the order-up-to policy and for series of different demand patterns. We find that forecast accuracy is more relevant when holding cost is similar or larger than that associated with lost sales. Therefore, in applications where the latter cost exceeds the former, the preferable forecasting method may not be the most accurate one, especially for relatively short review periods and lead times, as well as products characterized by intermittency. Based on our results we discuss some practical concerns for decision making.
{"title":"Forecast accuracy and inventory performance: Insights on their relationship from the M5 competition data","authors":"Evangelos Theodorou, Evangelos Spiliotis, Vassilios Assimakopoulos","doi":"10.1016/j.ejor.2024.12.033","DOIUrl":"10.1016/j.ejor.2024.12.033","url":null,"abstract":"<div><div>Although it is generally accepted that more accurate forecasts contribute towards better inventory performance, this relationship may often be weak, also depending on the structural characteristics of the products being forecast, the inventory policy considered, and the underlying expenses, among others. To empirically explore the connection between forecast accuracy and key costs associated with inventory control, namely holding, ordering, and lost sales costs, we consider the data set of the M5 competition and conduct detailed simulations using popular methods to generate quantile forecasts. Our results are analyzed for various setups of the order-up-to policy and for series of different demand patterns. We find that forecast accuracy is more relevant when holding cost is similar or larger than that associated with lost sales. Therefore, in applications where the latter cost exceeds the former, the preferable forecasting method may not be the most accurate one, especially for relatively short review periods and lead times, as well as products characterized by intermittency. Based on our results we discuss some practical concerns for decision making.</div></div>","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"322 2","pages":"Pages 414-426"},"PeriodicalIF":6.0,"publicationDate":"2025-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142975145","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-04DOI: 10.1016/j.ejor.2024.12.051
Esra Koca , A. Burak Paç
In this paper, we investigate the edge improvement problem where the fixed edge traversal time assumption of the traditional network flow problems is relaxed. We consider two variants of the problem: one where improvement decisions are restricted to a discrete set (discrete edge improvement problem), and the other where they can take any value within a specified range (continuous edge improvement problem). We first analyze both problem variants on a tree-shaped network and discuss their computational complexities. For the general case, where the underlying network has no special structure, we provide mixed-integer programming (MIP) formulations for both versions of the problem. To the best of our knowledge, this study is the first to propose and compare different formulations for the discrete edge improvement problem and to present a formulation for the continuous edge improvement problem. Since the developed models do not perform well for medium and large problem instances, we introduce a Benders decomposition algorithm to solve the discrete edge improvement problem. Additionally, we employ it heuristically to find high-quality solution for the continuous edge improvement problem within reasonable times. We also devise an MIP formulation to find lower bounds for the continuous edge improvement problem, leveraging the McCormick envelopes and optimal solution properties. Our experiments demonstrate that the Benders decomposition algorithm outperforms the other formulations for the discrete edge improvement problem, while the heuristic method proposed for the continuous edge improvement problem provides quite well results even for large problem instances.
{"title":"Exploring the discrete and continuous edge improvement problems: Models and algorithms","authors":"Esra Koca , A. Burak Paç","doi":"10.1016/j.ejor.2024.12.051","DOIUrl":"10.1016/j.ejor.2024.12.051","url":null,"abstract":"<div><div>In this paper, we investigate the edge improvement problem where the fixed edge traversal time assumption of the traditional network flow problems is relaxed. We consider two variants of the problem: one where improvement decisions are restricted to a discrete set (discrete edge improvement problem), and the other where they can take any value within a specified range (continuous edge improvement problem). We first analyze both problem variants on a tree-shaped network and discuss their computational complexities. For the general case, where the underlying network has no special structure, we provide mixed-integer programming (MIP) formulations for both versions of the problem. To the best of our knowledge, this study is the first to propose and compare different formulations for the discrete edge improvement problem and to present a formulation for the continuous edge improvement problem. Since the developed models do not perform well for medium and large problem instances, we introduce a Benders decomposition algorithm to solve the discrete edge improvement problem. Additionally, we employ it heuristically to find high-quality solution for the continuous edge improvement problem within reasonable times. We also devise an MIP formulation to find lower bounds for the continuous edge improvement problem, leveraging the McCormick envelopes and optimal solution properties. Our experiments demonstrate that the Benders decomposition algorithm outperforms the other formulations for the discrete edge improvement problem, while the heuristic method proposed for the continuous edge improvement problem provides quite well results even for large problem instances.</div></div>","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"323 2","pages":"Pages 441-454"},"PeriodicalIF":6.0,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142974905","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-04DOI: 10.1016/j.ejor.2025.01.002
Hui-hui Liu , Guo-liang Yang , Jian-wei Gao , Ya-ping Wang , Guo-hua Ni
With growing investments inindustry research and development (R&D) innovation in China, evaluating whether R&D resources assigned to industries areeffectively used is essential. However, limited research has been conducted on the assessment of R&D effectiveness in Chinese industries that encompasses both the internal process of R&D production and the psychological risks encountered by decision-makers (DMs).Hence, this study puts forward a two-stage prospect data envelopment analysis approach that can characterise the risk attitude of DM in evaluation. By employing this approach, we assess the R&D activities of 28 industries in China from an overall perspective and explore the actual influence of DMs’ risk psychology on the evaluation results through sensitivity and comparative analyses. Furthermore, we categorise the R&D performance of 28 Chinese industries into four quadrants for analysis and focus on the R&D performance of key industries such as extraction of petroleum and natural gas, mining of ferrous metal ores and manufacture of tobacco. Based on the findings, we provide a range of policy recommendations regarding the R&D activities of Chinese industries.
{"title":"Investigating the research and development performance of Chinese industry: A two-stage prospect data envelopment analysis approach","authors":"Hui-hui Liu , Guo-liang Yang , Jian-wei Gao , Ya-ping Wang , Guo-hua Ni","doi":"10.1016/j.ejor.2025.01.002","DOIUrl":"10.1016/j.ejor.2025.01.002","url":null,"abstract":"<div><div>With growing investments inindustry research and development (R&D) innovation in China, evaluating whether R&D resources assigned to industries areeffectively used is essential. However, limited research has been conducted on the assessment of R&D effectiveness in Chinese industries that encompasses both the internal process of R&D production and the psychological risks encountered by decision-makers (DMs).Hence, this study puts forward a two-stage prospect data envelopment analysis approach that can characterise the risk attitude of DM in evaluation. By employing this approach, we assess the R&D activities of 28 industries in China from an overall perspective and explore the actual influence of DMs’ risk psychology on the evaluation results through sensitivity and comparative analyses. Furthermore, we categorise the R&D performance of 28 Chinese industries into four quadrants for analysis and focus on the R&D performance of key industries such as extraction of petroleum and natural gas, mining of ferrous metal ores and manufacture of tobacco. Based on the findings, we provide a range of policy recommendations regarding the R&D activities of Chinese industries.</div></div>","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"323 3","pages":"Pages 1040-1059"},"PeriodicalIF":6.0,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142974904","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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