Improving supply chain performance: Real-time demand information and flexible deliveries

In some supply chains, materials are ordered periodically according to local information. This paper investigates how to improve the performance of such a supply chain. Specifically, we consider a serial inventory system in which each stage implements a local reorder interval policy; i.e., each stage orders up to a local basestock level according to a fixed-interval schedule. A fixed cost is incurred for placing an order. Two improvement strategies are considered: (1) expanding the information flow by acquiring real-time demand information and (2) accelerating the material flow via flexible deliveries. The first strategy leads to a reorder interval policy with full information; the second strategy leads to a reorder point policy with local information. Both policies have been studied in the literature. Thus, to assess the benefit of these strategies, we analyze the local reorder interval policy. We develop a bottom-up recursion to evaluate the system cost and provide a method to obtain the optimal policy. A numerical study shows the following: Increasing the flexibility of deliveries lowers costs more than does expanding information flow; the fixed order costs and the system lead times are key drivers that determine the effectiveness of these improvement strategies. In addition, we find that using optimal batch sizes in the reorder point policy and demand rate to infer reorder intervals may lead to significant cost inefficiency. © 2010 INFORMS.

Information relaxations and duality in stochastic dynamic programs

We describe a general technique for determining upper bounds on maximal values (or lower bounds on minimal costs) in stochastic dynamic programs. In this approach, we relax the nonanticipativity constraints that require decisions to depend only on the information available at the time a decision is made and impose a "penalty" that punishes violations of nonanticipativity. In applications, the hope is that this relaxed version of the problem will be simpler to solve than the original dynamic program. The upper bounds provided by this dual approach complement lower bounds on values that may be found by simulating with heuristic policies. We describe the theory underlying this dual approach and establish weak duality, strong duality, and complementary slackness results that are analogous to the duality results of linear programming. We also study properties of good penalties. Finally, we demonstrate the use of this dual approach in an adaptive inventory control problem with an unknown and changing demand distribution and in valuing options with stochastic volatilities and interest rates. These are complex problems of significant practical interest that are quite difficult to solve to optimality. In these examples, our dual approach requires relatively little additional computation and leads to tight bounds on the optimal values. © 2010 INFORMS.

Information programs for technology adoption: The case of energy-efficiency audits

We analyze technology adoption decisions of manufacturing plants in response to government-sponsored energy audits. Overall, plants adopt about half of the recommended energy-efficiency projects. Using fixed effects logit estimation, we find that adoption rates are higher for projects with shorter paybacks, lower costs, greater annual savings, higher energy prices, and greater energy conservation. Plants are 40% more responsive to initial costs than annual savings, suggesting that subsidies may be more effective at promoting energy-efficient technologies than energy price increases. Adoption decisions imply hurdle rates of 50-100%, which is consistent with the investment criteria small and medium-size firms state they use. © 2003 Elsevier B.V. All rights reserved.

Costs and benefits to European shipping of ballast-water and hull-fouling treatment: Impacts of native and non-indigenous species

Maritime transport and shipping are impacted negatively by biofouling, which can result in increased fuel consumption. Thus, costs for fouling reduction can be considered an investment to reduce fuel consumption. Anti-fouling measures also reduce the rate of introduction of non-indigenous species (NIS). Further mitigation measures to reduce the transport of NIS within ballast water and sediments impose additional costs. The estimated operational cost of NIS mitigation measures may represent between 1.6% and 4% of the annual operational cost for a ship operating on European seas, with the higher proportional costs in small ships. However, fouling by NIS may affect fuel consumption more than fouling by native species due to differences in species’ life-history traits and their resistance to antifouling coatings and pollution. Therefore, it is possible that the cost of NIS mitigation measures could be smaller than the cost from higher fuel consumption arising from fouling by NIS.

Description and search labor for information retrieval

Selection power is taken as the fundamental value for information retrieval systems. Selection power is regarded as produced by selection labor, which itself separates historically into description and search labor. As forms of mental labor, description and search labor participate in the conditions for labor and for mental labor. Concepts and distinctions applicable to physical and mental labor are indicated, introducing the necessity of labor for survival, the idea of technology as a human construction, and the possibility of the transfer of human labor to technology. Distinctions specific to mental labor, particular between semantic and syntactic labor, are introduced. Description labor is exemplified by cataloging, classification, and database description, can be more formally understood as the labor involved in the transformation of objects for description into searchable descriptions, and is also understood to include interpretation. The costs of description labor are discussed. Search labor is conceived as the labor expended in searching systems. For both description and search labor, there has been a progressive reduction in direct human labor, with its syntactic aspects transferred to technology, effectively compelled by the high relative costs of direct human labor compared to machine processes.

A labor theoretic approach to information retrieval

This article synthesizes the labor theoretic approach to information retrieval. Selection power is taken as the fundamental value for information retrieval and is regarded as produced by selection labor. Selection power remains relatively constant while selection labor modulates across oral, written, and computational modes. A dynamic, stemming principally from the costs of direct human mental labor and effectively compelling the transfer of aspects of human labor to computational technology, is identified. The decision practices of major information system producers are shown to conform with the motivating forces identified in the dynamic. An enhancement of human capacities, from the increased scope of description processes, is revealed. Decision variation and decision considerations are identified. The value of the labor theoretic approach is considered in relation to pre-existing theories, real world practice, and future possibilities. Finally, the continuing intractability of information retrieval is suggested.

Fighting for shells: how private information about resource value changes hermit crab pre-fight displays and escalated fight behaviour

Pre-fight displays typically provide honest, but sometimes dishonest, information about resource holding potential and may be influenced by assessment of resource value and hence motivation to acquire the resource. These assessments of potential costs and benefits are also predicted to influence escalated fight behaviour. This is examined in shell exchange contests of hermit crabs in which we establish an information asymmetry about a particularly poor quality shell. The poor shell was created by gluing sand to the interior whereas control shells lacked sand and the low value of the poor shell could not be accurately assessed by the opponent. Crabs in the poor shell showed changes in the use of pre-fight displays, apparently to increase the chances of swapping shells. When the fights escalated, crabs in poor shells fought harder if they took the role of attacker but gave up quickly if in the defender role. These tactics appear to be adaptive but do not result in a major shift in the roles taken or outcome. We thus link resource assessment with pre-fight displays, the roles taken, tactics used during escalation and the outcome of these contests.

The pitfall with PIT tags: Marking freshwater bivalves for translocation induces short-term behavioural costs

Tagging animals is frequently employed in ecological studies to monitor individual behaviour, for example postrelease survival and dispersal of captive-bred animals used in conservation programmes. While the majority of studies focus on the efficacy of tags in facilitating the relocation and identification of individuals, few assess the direct effects of tagging in biasing animal behaviour. We used an experimental approach with a control to differentiate the effects of handling and tagging captive-bred juvenile freshwater pearl mussels, Margaritifera margaritifera, prior to release into the wild. Marking individuals with passive integrated transponder (PIT) tags significantly decreased their burrowing rate and, therefore, increased the time taken to burrow into the substrate. This effect was contributed to, in part, by the detrimental impacts of handling, which also significantly affected activity, burrowing ability and the time taken for each individual to emerge and start probing the substrate. Disturbance during handling and tagging may lead to indirect mortality after release by increasing the risk of predation or dislodgement during flooding, thereby potentially compromising any conservation strategy contingent on population supplementation or reintroduction. This is the first study to demonstrate that handling and PIT tagging has a detrimental impact on invertebrate behaviour. Moreover, our results provide useful information that will inform freshwater bivalve conservation strategies.

Customs-Related Transaction Costs, Firm Size and International Trade Intensity

Customs are generally perceived as a time-consuming impediment to international trade. However, few studies have empirically examined the determinants and the impact of this type of government-imposed transaction costs. This paper analyses the role of firm size as a determinant of customs-related transaction costs, as well as the effect of firm size on the relationship between these costs and the international trade intensity of firms. The results of this study indicate that customs-related transaction costs repress international trade activities of firms, even at low levels of these costs. The paper identifies transaction-related economies of scale, simplified customs procedures and advanced information and communication technology as main determinants of customs-related transaction costs. It is shown that when these factors are taken into account, firm size has no effect on customs-related transaction costs. Policy implications are considered for firm strategy and public policy.

Task prioritization in aging: effects of sensory information on concurrent posture and memory performance

In older adults, cognitive resources play a key role in maintaining postural stability. In the present study, we evaluated whether increasing postural instability using sway referencing induces changes in resource allocation in dual-task performance leading older adults to prioritize the more age-salient posture task over a cognitive task. Young and older adults participated in the study which comprised two sessions. In the first session, three posture tasks (stable, sway reference visual, sway reference somatosensory) and a working memory task (n-back) were examined. In the second session, single- and dual-task performance of posture and memory were assessed. Postural stability improved with session. Participants were more unstable in the sway reference conditions, and pronounced age differences were observed in the somatosensory sway reference condition. In dual-task performance on the stable surface, older adults showed an almost 40% increase in instability compared to single-task. However, in the sway reference somatosensory condition, stability was the same in single- and dual-task performance, whereas pronounced (15%) costs emerged for cognition. These results show that during dual-tasking while standing on a stable surface, older adults have the flexibility to allow an increase in instability to accommodate cognitive task performance. However, when instability increases by means of compromising somatosensory information, levels of postural control are kept similar in single- and dual-task, by utilizing resources otherwise allocated to the cognitive task. This evidence emphasizes the flexible nature of resource allocation, developed over the life-span to compensate for age-related decline in sensorimotor and cognitive processing.

The impact of nonadherence to inhaled long-acting β - adrenoceptor agonist/corticosteroid combination therapy on healthcare costs in difficult-to-control asthma

Background: Asthma is a leading, preventable cause of morbidity, mortality and cost. A disproportionate amount of the cost is generated by the 5-10%of patients with difficult-to-control asthma, who are prescribed treatment at step 4/5 of the Global Initiative for Asthma (GINA) guidelines. We have previously demonstrated a high prevalence of nonadherence to inhaled combination therapy (i.e. long-acting ß -adrenoceptor agonist [ß - agonist] and corticosteroid) in this population. The aim of this study was to examine the costs of healthcare utilization in a nonadherent group of patients with difficult-to-control asthma compared with adherent subjects. We also wished to examine potential savings if nonadherence to inhaled combination therapy could be addressed. All costs were measured from the perspective of a publicly funded health service Methods: Adherence was determined through examination of patient prescription refill behaviour and validated with a medical concordance interview. Data on healthcare use were collected from a patient survey and hospital records that included prescribed medicines, hospital admissions, intensive care unit (ICU) admissions and other unscheduled healthcare visits associated with asthma care. Activity was monetized using standard UK references and between-group comparisons based on a series of univariate and multivariate regression analyses. Results: Cost differences were identified for inhaled combination therapy, nebulizer, short acting b2-agonists and hospital costs excluding and including ICU admissions between adherent and nonadherent subjects. Compared with a group who have refractory asthma and who are adherent with medication, additional healthcare costs in nonadherent subjects are offset by the reduction in costs associated with reduced medication utilization. However, if nonadherence can be successfully targeted and hospital admissions avoided in this population, there is a potential $475 ($843-$368) saving per patient, per annum. Conclusion: Nonadherence is an important cause of difficult-to-control asthma. A uniform cost for subjects with difficult-to-control disease can be applied to economic analyses, independent of adherence, as increased healthcare utilization costs are offset by the reduced medication cost due to poor adherence. However, there are substantial potential savings in subjects with difficult-to-control asthma, who are nonadherent to inhaled combination therapy, if cost effective strategies for nonadherence are developed. © 2011 Adis Data Information BV. All rights reserved.

Asymmetric information without common priors: an indirect evolutionary analysis of quantity competition

The common prior assumption justifies private beliefs as posterior probabilities when updating a common prior based on individual information. We dispose of the common prior assumption for a homogeneous oligopoly market with uncertain costs and firms entertaining arbitrary priors about other firms' cost-type. We show that true prior beliefs can not be evolutionarily stable when truly expected profit measures (reproductive) success.

Road traffic congestion and public information - An experimental investigation

This paper reports laboratory experiments designed to study the impact of public information about past departure rates on congestion levels and travel costs. Our design is based on a discrete version of Arnott et al.'s (1990) bottleneck model. In all treatments, congestion occurs and the observed travel costs are quite similar to the predicted ones. Subjects' capacity to coordinate is not affected by the availability of public information on past departure rates, by the number of drivers or by the relative cost of delay. This seemingly absence of treatment effects is confirmed by our finding that a parameter-free reinforcement learning model best characterises individual behaviour.

Game-­theoretic Resource Allocation with Real-­time Probabilistic Surveillance Information

Game-theoretic security resource allocation problems have generated significant interest in the area of designing and developing security systems. These approaches traditionally utilize the Stackelberg game model for security resource scheduling in order to improve the protection of critical assets. The basic assumption in Stackelberg games is that a defender will act first, then an attacker will choose their best response after observing the defender’s strategy commitment (e.g., protecting a specific asset). Thus, it requires an attacker’s full or partial observation of a defender’s strategy. This assumption is unrealistic in real-time threat recognition and prevention. In this paper, we propose a new solution concept (i.e., a method to predict how a game will be played) for deriving the defender’s optimal strategy based on the principle of acceptable costs of minimax regret. Moreover, we demonstrate the advantages of this solution concept by analyzing its properties.