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Optimal Decisions (optimal + decision)
Selected AbstractsOffshore Remanufacturing with Variable Used Product ConditionDECISION SCIENCES, Issue 1 2010Michael R. Galbreth ABSTRACT We consider the acquisition and production decisions of a remanufacturer who acquires used products of variable condition and allocates remanufacturing activity to domestic and offshore facilities. The problem is formulated as a multicommodity network flow model with economies of scale and product obsolescence. We show that the remanufacturer's optimal strategy can be chosen from a finite set of simple policies in which each product is routed to a facility based on its condition. We then numerically investigate the impact of key parameters on optimal decisions regarding offshore remanufacturing. [source] Parental investment, sexual selection and sex ratiosJOURNAL OF EVOLUTIONARY BIOLOGY, Issue 4 2008HANNA KOKKO Abstract Conventional sex roles imply caring females and competitive males. The evolution of sex role divergence is widely attributed to anisogamy initiating a self-reinforcing process. The initial asymmetry in pre-mating parental investment (eggs vs. sperm) is assumed to promote even greater divergence in post-mating parental investment (parental care). But do we really understand the process? Trivers [Sexual Selection and the Descent of Man 1871,1971 (1972), Aldine Press, Chicago] introduced two arguments with a female and male perspective on whether to care for offspring that try to link pre-mating and post-mating investment. Here we review their merits and subsequent theoretical developments. The first argument is that females are more committed than males to providing care because they stand to lose a greater initial investment. This, however, commits the ,Concorde Fallacy' as optimal decisions should depend on future pay-offs not past costs. Although the argument can be rephrased in terms of residual reproductive value when past investment affects future pay-offs, it remains weak. The factors likely to change future pay-offs seem to work against females providing more care than males. The second argument takes the reasonable premise that anisogamy produces a male-biased operational sex ratio (OSR) leading to males competing for mates. Male care is then predicted to be less likely to evolve as it consumes resources that could otherwise be used to increase competitiveness. However, given each offspring has precisely two genetic parents (the Fisher condition), a biased OSR generates frequency-dependent selection, analogous to Fisherian sex ratio selection, that favours increased parental investment by whichever sex faces more intense competition. Sex role divergence is therefore still an evolutionary conundrum. Here we review some possible solutions. Factors that promote conventional sex roles are sexual selection on males (but non-random variance in male mating success must be high to override the Fisher condition), loss of paternity because of female multiple mating or group spawning and patterns of mortality that generate female-biased adult sex ratios (ASR). We present an integrative model that shows how these factors interact to generate sex roles. We emphasize the need to distinguish between the ASR and the operational sex ratio (OSR). If mortality is higher when caring than competing this diminishes the likelihood of sex role divergence because this strongly limits the mating success of the earlier deserting sex. We illustrate this in a model where a change in relative mortality rates while caring and competing generates a shift from a mammalian type breeding system (female-only care, male-biased OSR and female-biased ASR) to an avian type system (biparental care and a male-biased OSR and ASR). [source] The Impact of Insurance Prices on Decision Making Biases: An Experimental AnalysisJOURNAL OF RISK AND INSURANCE, Issue 2 2003Susan K. Laury This article tests whether the use of endogenous risk categorization by insurers enables consumers to make better-informed decisions even if they do not choose to purchase insurance. We do so by adding a simple insurance market to an experimental test of optimal (Bayesian) updating. In some sessions, no insurance is offered. In others, actuarially fair insurance prices are posted, and a subset of subjects is allowed to purchase this insurance. We find significant differences in the decision rules used depending on whether one observes insurance prices. Although the majority of choices correspond to Bayesian updating, the incidence of optimal decisions is higher in sessions with an insurance option. Most subjects given the option to purchase actuarially fair insurance choose to do so. However, fewer subjects purchase insurance when the probability of a loss is higher. [source] Joint venture evolution: extending the real options approachMANAGERIAL AND DECISION ECONOMICS, Issue 4 2008Jing Li Real options theory has emerged as a promising avenue to study joint venture (JV) evolution as a strategic response to managing uncertainty. We extend the real options approach by integrating it with game theory. Such a combined method enriches the valuation functions of each partnering firm and helps to identify the optimal decisions for exercising options in a JV. In our model, each firm's synergy from the joint operation and its knowledge acquisition capability (KAC) can significantly influence the competitive dynamics between partners, potentially affecting how each firm decides to acquire, divest, or dissolve. We employ a new solution technique in real options theory to capture the stochastic process of three factors, and use computer simulation to test the model under varying conditions. The results are stated in five testable propositions, providing a better understanding of the dynamics of a JV. We find that symmetries between partners in synergy or KAC contribute to stability or dissolution of the JV, whereas asymmetries in synergy or KAC make acquisition of the JV assets by one partner desirable. Copyright © 2008 John Wiley & Sons, Ltd. [source] A MODEL OF MONOPOLISTIC COMPETITION WITH PERSONAL INCOME DISPERSIONMETROECONOMICA, Issue 3 2005Corrado Benassi ABSTRACT We introduce non-homothetic preferences in the Dixit,Stiglitz model of monopolistic competition, and enquire about the effects of a change in income dispersion on the firms' optimal decisions and market equilibrium. Income dispersion, modeled as a mean preserving spread, is shown to affect only the degree of product differentiation under the standard negligibility hypothesis on the firms' decision making process, while it generates a positive co-movement of demand and demand elasticity, when this assumption is removed and the price index effect is taken into account. [source] Reproduction now or later: optimal host-handling strategies in the whitefly parasitoid Encarsia formosaOIKOS, Issue 1 2004Joep M. S. Burger We developed a dynamic state variable model for studying optimal host-handling strategies in the whitefly parasitoid Encarsia formosa Gahan (Hymenoptera: Aphelinidae). We assumed that (a) the function of host feeding is to gain nutrients that can be matured into eggs, (b) oögenesis is continuous and egg load dependent, (c) parasitoid survival is exponentially distributed and (d) parasitoids encounter hosts randomly, are autogenous and have unlimited access to non-host food sources to obtain energy for maintenance and activity. The most important prediction of the model is that host feeding is maladaptive under field conditions of low host density (0.015 cm,2) and short parasitoid life expectancy (maximum reproductive period of 7 d). Nutrients from the immature stage that can be matured into eggs are sufficient to prevent egg limitation. Both host density and parasitoid life expectancy have a positive effect on the optimal host-feeding ratio. Parasitoids that make random decisions gain on average only 35% (0.015 hosts cm,2) to 60% (1.5 hosts cm,2) of the lifetime reproductive success of parasitoids that make optimal decisions, independent of their life expectancy. Parameters that have a large impact on lifetime reproductive success and therefore drive natural selection are parasitoid life expectancy and the survival probability of deposited eggs (independent of host density), the number of host encounters per day (when host density is low) and the egg maturation rate and number of host types (when host density is high). Explaining the evolution of host-feeding behaviour under field conditions requires field data showing that life expectancy in the field is not as short as we assumed, or may require incorporation of variation in host density. Incorporating variation in walking speed, parasitised host types or egg resorption is not expected to provide an explanation for the evolution of host-feeding behaviour under field conditions. [source] Inventory Record Inaccuracy, Double Marginalization, and RFID AdoptionPRODUCTION AND OPERATIONS MANAGEMENT, Issue 5 2007H. Sebastian Heese Most retailers suffer from substantial discrepancies between inventory quantities recorded in the system and stocks truly available to customers. Promising full inventory transparency, radio frequency identification (RFID) technology has often been suggested as a remedy to the problem. We consider inventory record inaccuracy in a supply chain model, where a Stackelberg manufacturer sets the wholesale price and a retailer determines how much to stock for sale to customers. We first analyze the impact of inventory record inaccuracy on optimal stocking decisions and profits. By contrasting optimal decisions in a decentralized supply chain with those in an integrated supply chain, we find that inventory record inaccuracy exacerbates the inefficiencies resulting from double marginalization in decentralized supply chains. Assuming RFID technology can eliminate the problem of inventory record inaccuracy, we determine the cost thresholds at which RFID adoption becomes profitable. We show that a decentralized supply chain benefits more from RFID technology, such that RFID adoption improves supply chain coordination. [source] On the Risk,Downside Risk TradeoffTHE MANCHESTER SCHOOL, Issue 2 2004Carmen F. Menezes In the last decade the literature has established the empirical importance of the tradeoff between risk and downside risk in a variety of economic settings. While the notions of risk and downside risk have been generalized in the theoretical literature, the literature has yet to provide a choice-theoretic characterization of their tradeoff. This paper provides an analytical characterization of the risk,downside risk tradeoff and shows its relevance in the analysis of optimal decisions under uncertainty, such as the precautionary savings decision. [source] China's Outward Direct and Portfolio InvestmentsCHINA AND WORLD ECONOMY, Issue 6 2007Hung-Gay Fung G11; G15; G18 Abstract This paper analyzes developments and trends related to China's outward direct and financial investments by examining Chinese firms'overseas acquisitions, China's holdings of US Treasury securities, and the recently formally launched Qualified Domestic Institutional Investor programs. Strategies should be developed to reach optimal decisions for both direct and portfolio investments. We argue that China should have a longer-term view for both direct and portfolio investments, enabling China to become the leader in Asia while maintaining its sustainable growth objective. China should invest heavily in the development of the Asian bond market and the Asian Currency Fund when making both portfolio and direct investment decisions. [source] Modeling memory and perceptionCOGNITIVE SCIENCE - A MULTIDISCIPLINARY JOURNAL, Issue 3 2003Richard M. Shiffrin Abstract I present a framework for modeling memory, retrieval, perception, and their interactions. Recent versions of the models were inspired by Bayesian induction: We chose models that make optimal decisions conditioned on a memory/perceptual system with inherently noisy storage and retrieval. The resultant models are, fortunately, largely consistent with my models dating back to the 1960s, and are therefore natural successors. My recent articles have presented simplified models in order to focus on particular applications. This article takes a larger perspective and places the individual models in a more global framework. I will discuss (1) the storage of episodic traces, the accumulation of these into knowledge (e.g., lexical/semantic traces in the case of words), and the changes in knowledge caused by learning; (2) the retrieval of information from episodic memory and from general knowledge; (3) decisions concerning storage, retrieval, and responding. Examples of applications include episodic recognition and cued and free recall, perceptual identification (naming, yes,no and forced-choice), lexical decision, and long-term and short-term priming. [source] A multidimensional framework for financial,economic decisionsJOURNAL OF MULTI CRITERIA DECISION ANALYSIS, Issue 3 2002Winfried Hallerbach Abstract Most financial,economic decisions are made consciously, with a clear and constant drive to ,good', ,better' or even ,optimal' decisions. Nevertheless, many decisions in practice do not earn these qualifications, despite the availability of financial economic theory, decision sciences and ample resources. We plea for the development of a multidimensional framework to support financial economic decision processes. Our aim is to achieve a better integration of available theory and decision technologies. We sketch (a) what the framework should look like, (b) what elements of the framework already exist and which not, and (c) how the MCDA community can co-operate in its development. Copyright © 2003 John Wiley & Sons, Ltd. [source] | |||||||||||||||||||||||||