Capturing Relatedness: Comprehensive Measures based on Secondary Data

This paper presents new measures of technological and customer‐side relatedness constructed from widely available secondary data. Relatedness is a concept central to predicting the existence and nature of a relationship between corporate diversification and firm performance. Yet, finding appropriate measures has been an ongoing struggle. The widely used SIC‐based entropy measure has low construct validity, and survey‐based measures are hard to replicate across firms and industries and over time. The measures we develop significantly outperform established measures in explaining variation in firm performance across firms and over time, and both sources of relatedness are found to be independent and significant explanations of firm performance.     

The Independent Localisations of Interaction and Learning in the Repeated Prisoner's Dilemma

The results of a series of computer simulations demonstrate how the introduction of separate spatial dimensions for agent interaction and learning respectively affects the possibility of cooperation evolving in the repeated prisoner's dilemma played by populations of boundedly-rational agents. In particular, the localisation of learning promotes the emergence of cooperative behaviour, while the localisation of interaction has an ambiguous effect on it.     

Research and development project selection and resource allocation: a review of quantitative modelling approaches

This paper reviews the literature on quantitative modelling for research and development (R&;D) project selection and resource allocation. The topic has been a subject of operations research for about four decades. Its importance stems from the fact that R&D projects are a core element of corporate renewal, heavily influence a firm's market success and, if not properly chosen and trimmed, may waste large amounts of resources or even ruin the enterprise. Our survey classifies and characterizes the various modelling approaches.     

RFID as an Enabler of Improved Manufacturing Performance*

The use of radio frequency identification (RFID) versus bar coding has been debated with little quantitative research about how to best use RFID's capabilities and when RFID is more advantageous. This article responds to that need by qualitatively and quantitatively analyzing how RFID facilitates increased traceability and control in manufacturing, which in turn enables the use of more lot splitting and smaller lot sizes. We develop insights about operating policies (RFID vs. bar‐code tracking mechanisms, extent of lot splitting, and dispatching rules) and an operating condition (setup to processing time ratio) that affect the mean flow time and proportion of jobs tardy in a job shop. A simulation model is used to control factors in the experimental design and the output is evaluated using analysis of variance. The results show the following: (i) performance worsens when bar coding is used with extensive lot splitting, (ii) process changes such as extensive lot splitting may be required to justify RFID use instead of bar coding, (iii) the earliest operation due date dispatching rule offers an attractive alternative to other rules studied in previous lot splitting research, and (iv) the performance improvements with RFID and increased lot splitting are larger when the setup to processing time ratio is smaller. In a broader context, we fill a research void by quantitatively showing how RFID can be used as an advanced manufacturing technology that enables more factory automation and better performance along several dimensions. The article concludes by summarizing the results and identifying ideas for future research.     

Book reviews

New scholarship on rape in American history

Sex Without Consent: Rape and Sexual Coercion in America. Edited by Merril D. Smith. New York: New York University Press, 2001, 308 pages. Cloth, $60.00; paper, $19.50.

The enigma of sexual desire

Sexual Appetite, Desire and Motivation: Energetics of the Sexual System. Edited by Walter Everaerd, Ellen Laan, and Stephanie Both. Amsterdam, Netherlands: Knaw Edita, 2001, 156 pages. Paper, NLG 80.00, Euro 36.30.

American sex in the private and public sectors

Sex, Love, and Health in America: Private Choices and Public Policies. Edited by Edward O. Laumann and Robert T. Michael. Chicago, IL: The University of Chicago Press, 2000, 535 pages. Hardcover, $48.

Enlarging the landscape of sexual pleasure

Good Sex: Feminist Perspectives from the World's Religions. Edited by Patricia Beattie Jung, Mary E. Hunt, and Radhika Balakrishnan. New Brunswick, NJ: Rutgers University Press, 2001, 220 pages. Cloth, $50.00; paper, $20.00.

Another stab at sexual theory

The Role of Theory in Sex Research. Edited by John Bancroft. Bloomington, IN: Indiana University Press, 2000, 366 pages. Cloth, $49.95.     

Transfer of risk in the newsvendor model with discrete demand

In this paper we consider the transfer of risk in a newsvendor model with discrete demand. We view the newsvendor model as a leader/follower problem where the manufacturer (leader) decides the wholesale price and the retailer (follower) decides the quantity ordered. Taking a Pareto-optimal contract as a starting point, the manufacturer wishes to design a real option contract to enhance profits. A new real option contract is said to be feasible if both parties' expected profit is at least as great as in the original contract. When demand is discrete, there are usually infinite feasible contracts that yield maximum expected profits to the manufacturer. In the paper we show that either all, some or none of these real option contracts offer an improved position for the retailer.     

Mixed contracts for the newsvendor problem with real options and discrete demand

In this paper we consider the newsvendor model with real options under discrete demand. We consider a mixed contract where the retailer can order a combination of q units subject to the conditions in a classical newsvendor contract and Q real options on the same items. We provide a closed form solution to this mixed contract when the demand is discrete and study some of its properties. In particular we demonstrate that a mixed contract may be superior to a real option contract when a manufacturer has a bound on how much variance she is willing to accept.