ON PERSONNEL BUDGETING FOR CONTINUOUS OPERATIONS (WITH EMPHASIS ON HOSPITALS)

This paper develops an approach for determining staff size when N_j personnel are needed on weekday j, j= 1, 2,…,7. The method explicitly incorporates the fact that staff size will vary with both regular rest policy and fringe-benefit days. The typical hospital case where N employees are needed weekdays and n on weekends is developed in detail.     

ON TWO-SOURCE FACTOR PURCHASING

Two-source purchasing at differing factor-unit costs is a common real-world phenomenon. So too are uncertainty and risk aversion which, as this paper demonstrates, provides one explanation for why firms on occasion purchase from high-cost sellers.     

A NOTE ON RENEGING DECISIONS

This note is an extension of the approach to the problem of reneging introduced in Parkan and Warren [1]. It is assumed customers consider joining an M/M/1 queuing system with a prior gamma distribution over the values of the mean service time. Thus, each customer has an initial estimate of his total waiting time in the system. The customers associate the same sunk value with the waiting time and obtain the same reward at service completion. Having joined a system each customer may consider reneging in view of his revision of his initial service time estimate based on service observations. The bounds on the stationary state probabilities for such a system are obtained and examples are provided to compare the cases with and without reneging.     

ON LEAD TIME DEMAND DISTRIBUTIONS

A key factor in establishing inventory policy for an item is the procurement lead time demand distribution (LTDD). Demand during lead time is a random variable if at least one of the components-length of lead time, order intensity, and order size-is a random variable. This paper discusses the problem of estimating the functional form of the LTDD for various combinations of the component random variables, using the method of generating functions. Since a normal approximation will often be used in practice, expressions are also given for the mean and variance of the LTDD for the various cases.     

A NOTE ON RIDGE REGRESSION

The purpose of this paper is to show that ridge regression is a special case of the class of mixed estimators. This derivation permits a convenient interpretation of the ridge constant. It also allows for a better understanding of the divergence between the theoretical results for the ridge estimator and recent sampling evidence, and suggests a new means of selecting of ridge constant.     

ON MODELING ADVERTISING PULSING DECISIONS

Based on empirical findings in the literature, sales response to advertising pulsing policy (APP) is modeled mathematically. The implications for APP are discussed. This policy is compared with an alternative policy of uniform expenditures (UAP), a commonly used strategy. The results of the research indicate that substantial savings in advertising budget or an increase in sales revenues may be achieved for a firm using APP.     

ON FUZZY GOAL PROGRAMMING*

This paper illustrates how the goal programming problem with fuzzy goals having linear membership functions may be formulated as a single goal programming problem. Also, a previously defined method for dealing with fuzzy weights for each of the goals is re-examined.     

IMPLEMENTING INITIATIVES ON QUALITY: AN INTRODUCTION TO THE SPECIAL ISSUE ON TOTAL QUALITY MANAGEMENT

In the early 1980s, companies around the world, learning from the Japanese experience, saw that they could address their severe competitive problems related to productivity and quality only by looking at the entire set of processes and organizational relationships in the context of the customer's needs. This approach was termed total quality management (TQM). As companies pursue quality-related initiatives, they must deal with a number of issues; some of these issues are addressed here: measurement of benefits, feedback and recognition, work-teams, teaching continuous improvement, and enhancing the effectiveness of statistical process control charts.     

ON THE THEORY OF ETHNIC CONFLICT

When considering engaging in conflict to secure control of a resource, a group needs to predict the amount of post‐conflict leakage due to infiltration by members of losing groups. We use this insight to explain why conflict often takes place along ethnic lines, why some ethnic groups are more often in conflict than others (and some never are), and why the same groups are sometimes in conflict and sometimes at peace. In our theory ethnic markers help enforce group membership: in homogeneous societies members of the losing group can more easily pass themselves as members of the winning group, and this reduces the chances of conflict as an equilibrium outcome. We derive a number of implications of the model relating social, political, and economic indicators such as the incidence of conflict, the distance between ethnic groups, group sizes, income inequality, and expropriable resources. One of the insights is that the incidence of ethnic conflict is nonmonotonic in expropriable resources as a fraction of total resources, with a low incidence for either low or high values. We use the model’s predictions to interpret historical examples of conflict associated with skin pigmentation, body size, language, and religion.     

A NOTE ON LEARNING CURVE PARAMETERS

This note describes differences in the feasible range of values that the learning curve parameter may take when a unit learning approach is used as opposed to a cumulative-average learning curve. Clarification of this point is important because learning curve theory now is used in a variety of areas.     

ON EXTENSIONS OF PROBABILISTIC PROFIT BUDGETS

Previous work on probabilistic profit budgets has dealt with the construction of probability intervals for the items in the planning and control statements (e.g., direct costs, marginal contributions, profits, etc.). This paper expands that work by demonstrating the potential benefits for managerial accounting in constructing confidence limits for the mean, the standard deviation, and the coefficient of variation. The adequacy of the confidence interval for any account balance depends on the credibility of the sample standard deviation, s, as an estimate of the population standard deviation, σ. The confidence interval of the standard deviation assesses, in a sense, the precision of the point estimate, s. Furthermore, it takes on a meaning similar to risk measures discussed in the finance literature. Given confidence intervals for the mean and standard deviation, one can construct corresponding bands for the coefficient of variation. These bands give insight into the goodness of the accounting system and the stability of the budgetary model.     

ON THE ROBUSTNESS OF MAJORITY RULE

We show that simple majority rule satisfies five standard and attractive axioms—the Pareto property, anonymity, neutrality, independence of irrelevant alternatives, and (generic) decisiveness—over a larger class of preference domains than (essentially) any other voting rule. Hence, in this sense, it is the most robust voting rule. This characterization of majority rule provides an alternative to that of May (1952). (JEL: D71)     

ON ESTIMATING PARAMETERS FOR BETA DISTRIBUTIONS

The purpose of this paper is to comment on and give historical perspective to two methdologies for estimating parameters of beta distributions. Fielitz and Myers [3] [4] developed and advocated a methodology using the method of moments, while Romesburg [20] advocated a methodology usingthe method of maximum likelihood. However, what Fielitz and Myers presented as new research and suggested as an area needing further study is ground already trampled. The authors have prepared a graph to underline the superiority of the maximum likelihood method in fitting beta distributions.     

ON THE TABLETOP IMPROVEMENT EXPERIMENTS OF JAPAN

Originally conceived by Frank and Lillian Gilbreth, the “tabletop improvement experiments” have been used in Japan since 1925 to teach important principles of continuous improvement. The experiments, designed for classroom use, communicate their lessons in a striking and memorable way. The work-related experiments categorize the sources of resistance to change and show how to neutralize them. The process-related experiments sharpen understanding of where the biggest opportunities for process improvement usually lie. Surprisingly, the experiments are hardly known in the West. We describe all of them and document their history for the first time.     

ON THE POSSIBILITY OF INFORMATIONALLY EFFICIENT MARKETS

This paper presents conditions for a resolution of the Grossman–Stiglitz paradox of informationally efficient markets. We display a market with asymmetric information where a privately revealing equilibrium obtains in a competitive framework and where incentives to acquire information are preserved as long as the correlation in traders’ valuations is not too large. The equilibrium is efficient, and the problems associated with fully revealing rational expectations equilibria are precluded without resorting necessarily to noise traders. The robustness of the results to general information structures is established and the effect of market power is examined in a large market approximation to the competitive economy. The model is applied to explain changes in bidding behavior in central bank liquidity auctions in the crisis period. (JEL: D82, D84, G14, E59)     

THE EFFECTS OF ENDORSEMENTS ON PRODUCT EVALUATION

This paper examines the effect of product endorsement claims on a consumer's decision making processes. A simulated endorsement claim was made for a product after which a consumer was presented with the product. Endorsements tested were the three most common types in use: celebrity, expert, and typical consumer, with two control groups for experimental design. Three scales of measurement were used to assess the effect of the endorsement: a consumer's intent to purchase, his overall attitude towards the product, and his expected price of the product. The results show the strength of celebrity and typical consumer endorsers. They also show that the endorser effect is dramatically weaker than hypothesized. The Lavidge-Steiner hierarchy of advertising effects model is introduced in an attempt to explain this phenomenon. Guidelines for further research are provided.     

ON THE INEFFECTIVE EDUCATION OF DECISION SCIENTISTS

There is general agreement that the training of decision scientists during the past ten years has left much to be desired. This note presents nine rules relating to the fundamental reasons for the failure of training programs, along with suggestions for improving the present state of affairs.