Management Science

Jagannathan, Raj; Sen, Tarun

doi: 10.1287/mnsc.37.3.251pmid: N/A

The process of testing a sample of a patient's blood against units of blood from inventory to ensure compatibility is called crossmatching. When a physician orders blood, it is crossmatched and then held for a patient. As a precautionary measure, physicians tend to order blood in excess of the amount that is transfused (used by the patient). Consequently, a large proportion of blood held for a patient (often higher than 50 percent) is eventually not transfused. This leads to increased outdates. The effects of crossmatching on outdates are widely acknowledged, but have seldom been included in blood inventory control models. In this paper, we develop a model for determining outdates and shortages for crossmatched blood using generally accepted parameters, such as proportion of crossmatched blood that is actually transfused, and the number of days after which crossmatched blood is released if not transfused. This model can be used as a decision support system that allows the blood bank administrator to do sensitivity analyses related to controllable blood inventory parameters.

Adler, Paul S.; Clark, Kim B.

doi: 10.1287/mnsc.37.3.267pmid: N/A

This exploratory paper sketches some of the behavioral processes that give rise to the learning curve. Using data from two manufacturing departments in an electronic equipment company, we construct a model of productivity improvement as a function of cumulative output and two managerial variables—engineering changes and workforce training. Exploration of this model highlights the complex relationship between first-order and second-order learning.

Bitran, Gabriel R.; Tirupati, Devanath

doi: 10.1287/mnsc.37.3.282pmid: N/A

This paper presents simple approximations for networks of queues with overtime operation at some stations. This type of network is commonly encountered in several manufacturing applications. We provide bounds on the performance of the approximations for single and multiple machine stations. Our results suggest that the methods perform satisfactorily. These approximations can be used in conjunction with parametric decomposition methods to analyze queueing networks. The computational results indicate that the performance of the decomposition approach does not deteriorate when combined with the methods proposed in this paper.

Deb, Raj; Hadar, Josef; Seo, Tae Kun

doi: 10.1287/mnsc.37.3.301pmid: N/A

In his 1984 paper in Management Science, McEntire conjectured that all concave utility functions satisfy his independence-from-irrelevant-assets (IIA) property. This paper shows that this conjecture is false. The paper provides several families of utility functions, all of whose members violate the IIA property; moreover, it is shown that the set of utility functions violating the IIA property is quite large, and that it is widespread throughout the entire space of utility functions.

Whitt, Ward

doi: 10.1287/mnsc.37.3.307pmid: N/A

Green, Kolesar and Svoronos (in press) and Green and Kolesar (in press) use numerical methods to investigate the behavior of multiserver Markov queues with a Poisson arrival process having a sinusoidal arrival rate. For this model they propose an approximation for long-run average performance measures called the pointwise stationary approximation (PSA), which consists of an appropriate weighted average of the performance measure that would result at each point in time if the system were stationary with the arrival rate that applies at that point in time. In this paper we verify their conjecture that PSA is asymptotically correct as the service and arrival rates increase with the instantaneous traffic intensity held fixed (corresponding to long arrival rate cycles). We actually establish both pointwise and average versions of this result for general time-dependent birth-and-death processes.

Kantor, Paul B.; Zangwill, Willard I.

doi: 10.1287/mnsc.37.3.315pmid: N/A

A conceptualization of production learning is proposed, which resolves costs into groups characterized by the rate at which the costs can be reduced. These groups may correspond to learning in process, materials or technology. This approach suggests a new budget methodology, the Learning Rate Budget (LRB), which combines activities with similar learning rates to facilitate planning, forecasting, bidding, accountability, and management control. This new conceptualization of cost progress rests on three postulates concerning the budget, the technology and a finite basis for the learning curve. This paper explores these postulates, presents the LRB, and summarizes the empirical study that led to this concept.

Rao, Vithala R.; Mahajan, Vijay; Varaiya, Nikhil P.

doi: 10.1287/mnsc.37.3.331pmid: N/A

In recent years, the U.S. corporate world has been dominated by a spectacular spate of mergers and acquisitions. Firms are seeking out partners that will provide them the necessary leverage to achieve their various growth and diversification goals. Based on the balance model developed by Farquhar and Rao, this paper suggests a multi-attribute approach for evaluating acquisition partners. The appropriateness of this approach in the decision of one firm to acquire another firm is investigated using experimental methods. The context of the cosmetic industry is used in this empirical application. Results indicate that the balance model is quite suitable in describing the acquisition decision.

Lovell, C. A. Knox; Morey, Richard C.

doi: 10.1287/mnsc.37.3.350pmid: N/A

Consumer incentives often have a dual role: to expand the market and to redistribute the market so as to meet sales targets for a range of products. The proper allocation of incentives must recognize and deal with the competitive and “cannibalizing” effects operating among product classes. The presence of environmental factors, scale economies, and cost per unit for each of the candidate incentive types also must be accounted for. This paper develops and illustrates an analytical approach designed to improve the allocation of consumer incentives where sales targets are exogenously set. The model generates a system of simultaneous behavioral equations, a portion of which is included to reflect attempted cost minimizing behavior. The model is applied to FY81-FY86 data from the U.S. Army Recruiting Command, which allocated over $1 billion for special incentives to selected recruits. The incentives consist of enlistment bonuses and educational benefits offered to quality recruits who select critical occupational specialties. The sales targets are enlistment quotas for each of the occupational specialties that must be simultaneously satisfied. The Army's goal is to meet these quotas, in a postulated recruiting environment, at minimum total incentive expenditure. Results suggest that the Army could improve the cost-effectiveness of its recruiting effort through a reallocation of the incentives it offers to recruits. Misallocation during the FY81-FY86 period is estimated to have cost the Army approximately 3.5% of its total incentives expended in infantry recruiting recruiting.

Muralidhar, Krishnamurty; Tretter, Marietta J.

doi: 10.1287/mnsc.37.3.368pmid: N/A

Estimating electrical demand in 15—30-minute intervals plays a crucial role in the determination of electric utility rates and the planning functions of utility companies. In order to achieve accurate estimation results, the Public Utilities Regulatory Policies Act of 1978 specifies requirements that are unique to this estimation problem. This study investigates the impact of these requirements on estimation effectiveness. The results indicate that these requirements fail to achieve their purpose. The study also notes the importance of addressing the form of the underlying population of electrical demand.

doi: 10.1287/mnsc.37.3.374pmid: N/A