Knowledge that Transforms

In this paper, we characterize the relationship between the expected optimal value of a stochastic linear program and a stochastic program with recourse and the degree of uncertainty in the objective function coefficients c and the stipulation vector b. It is shown that under certain conditions the expected objective value is nondecreasing as the degree of uncertainty in c increases and the opposite is true for the case of b. The degree of uncertainty of a random vector is defined in terms of a covariance matrix. Some managerial interpretations are also given.

Planning horizons are developed for the dynamic economic lot site model with backlogging when the marginal production cost is either constant or variable. The inventory holding and backlogging cost functions are assumed to be concave. An efficient forward algorithm generalizes the Eppen-Gould-Pashigian procedure and enables us to place bounds on the optimal production plan should a horizon not be found.

The equivalence of Bayesian equilibria of two-person games with incomplete information and Nash equilibria of certain n-person polymatrix games is demonstrated by means of a specific “Selten model.” As a byproduct, constructions recently developed for polymatrix games are available for Bayesian equilibria.

In this paper a simulation study of the effects of labor flexibility on the performance of a multiechelon dual-constraint job shop is described. Machines and workers are constraining resources in the hypothetical shop. The organizational structure of the shop consists of divisions comprised of work centers that contain machines and workers. There are fewer workers than machines. Independent variables are interdivisional and intradivisional labor flexibility. Mean flow-time, flow-time variance and worker transfers between divisions and work centers are used as measures of shop performance. Labor flexibility is shown to have a major effect on shop performance. The effectiveness of interdivisional labor flexibility as a management variable is found to be concentrated in the region of high flexibility while intradivisional labor flexibility is most effective in the region of low flexibility.

In this paper a periodic review stock system using the so-called (S, s) ordering policy is considered. New and more accurate approximations are found for calculating the optimal values of the reorder point s and the minimum order quantity Δ = S − s. When demands are normally distributed it is shown that the six cost and distribution parameters associated with these approximations can be combined into two effective parameters. This facilitates the derivation of two graphs which can be used with some relatively simple computational procedures to determine approximate optimal values for the reorder point s and minimum order quantity Δ.

This paper considers fluid analogues for the standard linear programming problem and for a separable nonlinear programming problem. In the former case the usual duality results are demonstrated using the principle of minimum potential energy. In addition by examining the dynamics of the system a new method, referred to as the R-method, is derived for solving linear programmes, although it is not demonstrated that this has any computational advantages over the standard simplex method, except that degeneracy causes no problems. In the nonlinear case the weak Lagrangian principle is derived. The purpose of the paper is to demonstrate that analogue methods, while being impracticable as a physical method of solving optimisation problems, may give some insight into computational algorithms via dual energy concepts and/or dynamic behaviour.

A mathematical expression for the cost of maintaining a client-centered service organisation is derived. It shows the dependency of the total cost on the service-request load, the number of hierarchical levels of the organization, and the administrative costs. The mathematical formulation is based on a model in which the main variables are the times spent on communication between different levels of the organisation and on communication between agents at the same level. The optimum number of levels for minimising cost is derived, and its sentivity to request load is investigated.

In a recent paper Aumann and Maschler [Aumann, R. J., M. Maschler. 1972. Some thoughts on the minimax principle. Management Sci. 18 (5, Part 2, January) P-54.] (we will subsequently refer to them as A-M) raised some questions about certain matters that had long been considered settled. In their words, “It is generally agreed that the minimax solution to a two-person zero-sum matrix game is intuitively satisfactory. Now in many applications of game theory a game is not described in matrix (or ‘normal’ or ‘strategic’) form, but rather in extensive form, i.e., by its rules. A game described in such a way may be reduced to a matrix game by means of the concept of ‘strategy.’ If, moreover, it is of perfect recall, then all mixed strategies, and in particular the optimal strategies of each player, are equivalent to behavior strategies The usual conclusion from these considerations is that for 2-person 0-sum games in extensive form, the minimax solution is intuitively satisfactory, and that in games of perfect recall, in particular, the players would do well to play in accordance with optimal (minimax) behavior strategies. In this paper we shall discuss some examples that, we believe, cast doubt on these conclusions.”

This paper first examines and illustrates the way in which value judgements can be incorporated in a system, and how they can be externalized by changing the system's boundaries. Then some general statements about value judgements and their locations in systems are advanced. The acceptance of these statements enables an extension of the notion of “value judgement” from sentences to systems. Thus criteria are spelled out for attributing the terms “normative” and “positive” to systems. Then the changes are examined which occur when a system undergoes the transfer of a value judgement from its structure to its (external) environment. Furthermore an attempt is made to clarify (by means of this Method of Neutralizing Systems) the longstanding controversy of value neutrality of science and of our own discipline. Finally an analysis is sketched which reveals that the assertion “ought-to-sentences cannot be reduced to is-sentences” need not be tautological if it is meant to hold within a system only. If the pertinent normative remnant lies beyond the system boundaries, a value judgement can indeed be reduced to a factual statement, but merely within this system.

Thirty-two research and development scientists working under high and low autonomy conditions were studied for differences in attitudes and behavior, and their (thirty-two) one-man projects were studied for differences in output levels. High autonomy development scientists were found to have higher levels of work gratification and interpersonal compatibility than their low autonomy counterparts. For research scientists, no such attitudinal and behavioral differences were found between high and low autonomy conditions. Development projects were found to have generally higher levels of outputs than research projects, where outputs were measured in terms of the percent technical problems solved and the project degree of achievement. However, for both research and development projects, the output levels did not vary with the degree of autonomy. Taken together, the detailed results indicate that the work orientation of a project, research or development, can have a significant influence on project outputs. By contrast, the degree of autonomy may only influence certain attitudinal and behavioral dimensions, which may be unrelated to output levels. These results are consistent with the conventional wisdoms, and their implications for management are largely in accord with modern management practices.