For the infinite horizon, single item inventory problem, assume an ordering cost M(i) + K(j) for changing the stock level from i to j (for example, M(i) + K(j) = c · (j − i) + K), a holding plus shortage cost l(j), and a probability φ (j, k) of demand j − k when the stock level is j. New conditions for optimality of (s, S) policies are given, and a computational method is given. Both the total discounted cost and the average cost criteria are treated. The method is simplified when the demand distribution is Bernoulli or geometric. When, in addition, the costs K(j) = K, and l(x) is −Lx for x > 0, zero for 0 ≦ x ≦ I, for some I ≧ 0, and H(x − I) for x > I, then conditions are given for an optimal policy (s*, S*) to have s* = −1 or S* = I. Further, for the same assumptions but without the integrality restriction on s and S, specific formulas are given for s* and S* when the criterion is average cost; and equations, which can be solved for s* and S*, are given when the criterion is total discounted cost.

A multi-item inventory system with periodic review, single set-up cost K plus linear ordering cost c for changing stock levels, and holding and shortage cost l(x) for being in stock position x at the beginning of a period is considered. Demand in any period is assumed to be ξ with probability ϕ(x,ξ), where x is the stock level at the beginning of the period. The infinite horizon optimum policies found consist of ordering up to S for any point x in σ, the reorder region, and not ordering at x not in σ. A computational procedure is given, bounds are derived, and, for further assumptions on l, σ is further characterized.

Redistricting, the redrawing of congressional district boundaries within the states, may occur every 10 years on the basis of the population census. Many redistricting plans are designed with partisan politics in mind, resulting in disputes and forcing judges to intervene. We address this problem from a nonpolitical viewpoint and present an optimization based heuristic incorporating universally agreed upon characteristics. We model the problem as a constrained graph partitioning problem and develop a specialized branch-and-price based solution methodology. We demonstrate the feasibility of our methodology by showing how to satisfy the one-person, one-vote principle with compact and contiguous districts for the state of South Carolina.

We describe a production allocation problem which was worked on at Frito-Lay and an integer programming model formulated for its solution. In connection with model formulation, we discuss estimation and collection of the required cost coefficients. Finally, we report on the use of two different linear programs, representing the same integer problem, which gave dramatically different running times to solve the integer programs. Some reasons for the improved running times are given.

Airlines are continually faced with the challenge of efficient utilization of their cockpit crew resources. In addition to regular flying crews, airlines maintain significant reserve staffing levels to meet contractual obligations and provide smooth daily operations. Most airlines also depend on voluntary and involuntary flying by regular crews to cover trips that fall out of work schedules due to conflicts and disruptions (open time trips). These open time trips, combined with expected levels of voluntary and involuntary flying, affect reserve staffing levels; airlines must plan crew staffing in advance to meet resulting training and new-hire requirements. Inefficient operational reserve utilization can further affect long-range crew staffing, resulting in higher training and new-hire costs. The proposed optimization strategy to estimate long-range crew staffing combines operational reserve utilization and premium operational costs due to voluntary and involuntary flying with long-range business needs.

We examine the role of political ideology in portfolio formation by studying a unique set of investors whose ideology can be precisely captured by a well-defined, continuous measure and whose personal asset allocation decisions are mandatorily disclosed, namely, the members of the U.S. Congress. As such, we overcome important methodological issues facing previous work in this area. We find that politicians with similar beliefs hold similar portfolios and that more liberal members engage in more socially responsible investing (SRI), even within political parties. Politicians disproportionately favor the SRI categories that reflect their favorite issues, while salience plays an important role in activating their ideologically based preferences for SRI. In addition, more ideological investors are less likely to engage in quid pro quo behavior. We conclude that ideology is a pervasive psychological factor that governs decisions across the domains of politics, investing, and, even, ethics. This paper was accepted by Lauren Cohen, finance.

We examine the portfolio holdings of funds of hedge funds (FoFs) to identify the channels through which FoFs add value for their clients. FoFs offer access to a diversified portfolio of funds that would be costly for constrained investors to manage on their own. Although we find only limited evidence that FoFs exhibit skill when selecting hedge funds, we find strong evidence that FoFs make skillful termination decisions. After FoFs divest from a hedge fund, those hedge funds subsequently underperform and fail more often. Our evidence indicates that FoFs learn and skillfully process information about their portfolio funds after they become investors, enabling them to forecast poor future performance. Our study suggests that FoFs serve an important role as intermediaries in a market characterized by significant frictions and transactions costs. This paper was accepted by Wei Jiang, finance.