Tests of specification in econometrics

This survey of recent developments in testing for misspecification of econometric models reviews procedures based on a method due to Hausman. Particular attention is given to alternative forms of the test, its relationship to classical test procedures, and its role in pre-test estimation.     

ABC Classification: Service Levels and Inventory Costs

ABC inventory classifications are widely used in practice, with demand value and demand volume as the most common ranking criteria. The standard approach in ABC applications is to set the same service level for all stock keeping units (SKUs) in a class. In this paper, we show (for three large real life datasets) that the application of both demand value and demand volume as ABC ranking criteria, with fixed service levels per class, leads to solutions that are far from cost optimal. An alternative criterion proposed by Zhang et al. performs much better, but is still considerably outperformed by a new criterion proposed in this paper. The new criterion is also more general in that it can take criticality of SKUs into account. Managerial insights are obtained into what class should have the highest/lowest service level, a topic that has been disputed in the literature.     

Index of Authors Volume 65, 2004

Authors Index

Index of Authors Volume 65, 2004     

Value of Information in Closed Loop Supply Chains

We explore the value of information (VOI) in the context of a firm that faces uncertainty with respect to demand, product return, and product recovery (yield). The operational decision of interest in matching supply with demand is the quantity of new product to order. Our objective is to evaluate the VOI from reducing one or more types of uncertainties, where value is measured by the reduction in total expected holding and shortage costs. We start with a single period model with normally distributed demands and returns, and restrict the analysis to the value of full information (VOFI) on one or more types of uncertainty. We develop estimators that are predictive of the value and sensitivity of (combinations of) different information types. We find that there is no dominance in value amongst the different types of information, and that there is an additional pay‐off from investing in more than one type. We then extend our analysis to the multi‐period case, where returns in a period are correlated with demands in the previous period, and study the value of partial information (VOPI) as well as full information. We demonstrate that our results from the single period model (adapted for VOPI) carry‐over exactly. Furthermore, a comparison with uniformly distributed demand and return show that these results are robust with respect to distributional assumptions.     

Change is an Ongoing Ethical Event: Levinas,Bakhtin and the Dialogical Dynamics of Becoming

In this article, we use the intersubjective ethics of Bakhtin and Levinas and a case illustration to explore change in therapy as an ethical phenomenon. We follow Lakoff and Johnson in their emphasis on the way our conceptions of change seem permeated by metaphors. Bakhtin and Levinas both suggest through a language in which metaphors play a crucial role, that human existence—the consciousness and the subject—emerge within the dialogue of the encounter. They both describe the dynamics of human existence as ethical in their origin. Following this, we argue that change may be seen as an ongoing ethical event and that the dynamics of change are found in the ways we constantly become in this event. We investigate the ethical dynamics of this ongoing event through three themes illuminating the contributions of both Bakhtin and Levinas: (1) we become as responsible, (2) we become in speaking, (3) we become in answering the unknown. We explore these themes through a case illustration. Finally, we briefly point out some possible implications for mental health practice.     

The VL control measure for symmetric networks

In this paper we measure “control” of nodes in a network by solving an associated optimisation problem. We motivate this so-called VL control measure by giving an interpretation in terms of allocating resources optimally to the nodes in order to maximise some search probability. We determine the VL control measure for various classes of networks. Furthermore, we provide two game theoretic interpretations of this measure. First it turns out that the VL control measure is a particular proper Shapley value of the associated cooperative network game. Secondly, we relate the measure to optimal strategies in an associated matrix search game.     

Endurance training for cancer patients during and shortly after completion of the anti-cancer treatment

Cardiorespiratory fitness is one of the most important indicators of health and improves length of life. The attention and acceptance for endurance training in patients with several cancer diagnoses increased during the last decade. This review highlight’s the effect of endurance training in cancer patients by summarizing exemplary randomized clinical trials and systematic reviews both within the acute hospital treatment context, as in a rehabilitation setting. To date, most studies focus on endurance training in patient groups with moderate to good prognosis. The studies within these patient groups evaluate the endurance training in cancer patients using a moderate training intensity between 50 and 75 % of the VO₂ peak with an exercise time varying from 20 min (five times per week) in hospital up to 45 min (two to three times per week) in an ambulatory setting. Recently, the American College of Sports Medicine indicated that cancer survivors should follow the Physical Activity Guidelines for Americans, which represents ≥150 min per week of moderate intensity, ≥75 min per week of vigorous intensity aerobic exercise, or an equivalent combination of moderate and vigorous intensity aerobic exercises. To date, fewer studies evaluate the effects of endurance training in a palliative setting to maintain physical function of the patient. Future studies should investigate the effect of endurance training by evaluating different types of intensity training (moderate vs. high intensity training), the use of high-tech devices to improve physical activity, and to evaluate the effect of endurance training in patients with a palliative intention.     

The Value of Supplier Information to Improve Management of a Retailer's Inventory

The distribution of lead time demand is essential for determining reorder points in inventory systems. Usually, the distribution of lead time demand is approximated directly. However, in some cases it may be worthwhile to take the demand per unit time and lead time into account, particularly when specific information is available. This paper deals with the situation where a supplier, who produces on order in fixed production cycles, provides information on the status of the coming production run. The retailer can use this information to gain insight into the lead-time process. A fixed order (s_vQ) strategy is presented, with a set of reorder points s_v depending on the time t until the first possible delivery, which is determined by the information of the supplier. A Markov model that analyzes a given (s_vQ) strategy is used to quantify the value of the information provided by the supplier. Some numerical examples show that the approach may lead to considerable cost savings compared to the traditional approach that uses only one single reorder point, based on a two-moments approximation. Using this numerical insight, the pros and cons of a more frequent exchange of information between retailers and suppliers can be balanced.