Operations Research Applications Research Articles

Book Reviews

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. The editor will be pleased to receive an email from those willing to review a book, with an indication of specific areas of interest. If you are aware of a specific book that you would like to review, or that you think should be reviewed, please contact the editor. The following books are reviewed in this issue of Interfaces, 44(5), September–October 2014: Analytics for Managers With Excel, Peter C. Bell and Gregory S. Zaric; Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances, Demet Çetiner; Applied Stochastic Processes, Ming Liao; and Hybrid Metaheuristics, El-Ghazali Talbi.

Operations research in BASF's supply chain operations

AbstractIn this paper, we highlight the application of operations research (OR) at BASF in the area of supply chain management (SCM) by using selected examples with annual cost savings ranging between several hundred thousand and several million euros. We address special characteristics of the process industry that should be dealt with and identify future research needs. The examples cover strategic, tactical, and operational topics encountered at BASF. We share our lessons learned, based on our experience from past OR projects in SCM, about challenges as well as benefits of standard and tailor‐made OR solutions. In general, we find that the special characteristics often call for a modification or enhancement of standard OR models. Providing appropriate solutions therefore requires a joint effort of SCM, IT, and OR experts.

An efficient algorithm for the subset sum problem based on finite-time convergent recurrent neural network

For a given set S of n real numbers, there are totally 2n−1 different subsets excluding the empty set. The subset sum problem is defined as finding L subsets whose summation of subset elements are the L smallest among all possible subsets. This problem has many applications in operations research and real world. However, the problem is very computationally challenging. In this paper, a novel algorithm is proposed to solve this problem. Firstly, the L smallest k-subsets sum problem, a special case and sub-problem of the subset sum problem, is investigated. Given a positive integer k (k≤n), k-subset means the subset of k distinct elements of S. Obviously, there are totally (nk) k-subsets. By expressing all these k-subsets with a network, the L smallest k-subsets sum problem is converted to finding L shortest loopless paths in this network. By combining the L shortest paths algorithm and the finite-time convergent recurrent neural network, a new algorithm for the L smallest k-subsets sum problem is developed. Finally, the solution to the subset sum problem is obtained by combining the solutions to these sub-problems. And experimental results show that the proposed algorithm is very effective and efficient.

Book Reviews

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. The editor will be pleased to receive an email from those willing to review a book, with an indication of specific areas of interest. If you are aware of a specific book that you would like to review, or that you think should be reviewed, please contact the editor. The following books are reviewed in this issue of Interfaces, 44(4), July–August 2014: Keeping Up With the Quants: Your Guide to Understanding + Using Analytics, Thomas H. Davenport and Jinho Kim; Analyzing Evolutionary Algorithms, Thomas Jansen; Systems Analysis Tools for Better Health Care Delivery, Panos M. Pardalos, Pando G. Georgiev, Petraq Papajorgji, and Britta Neugaard, eds.; Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die, Eric Siegel; and Unrelenting Innovation: How to Build a Culture for Market Dominance, Gerald J. Tellis.

Methods and applications in natural resources management

This special volume focuses on operations research (OR) methods and applications concerning the topic of natural resources management. It is related to and follows a former one (the volume number 190) devoted to OR in agriculture and forest management.Most of the papers included in this volume are connected with forestry, crop, livestock, and fish farming, while a few of them deal with water management and land and environmental issues. All in all, the present volume is another effort to bring together contributions from different disciplines and countries in the world and with the common goal of applying the most advanced results in theoretical and applied sciences to natural resources management. In the end, the volume has collected twenty-five high quality papers covering many aspects of operations research in natural resources management, considering both theoretical issues and applications. All papers have been reviewed according to the standards of the Annals of Operations Research. Accepted contributions to this volume have been selected frommore than fifty submissions, all of them dealing with many different methods and interesting applications. The scope of these papers ranges from OR methods to original applications in natural resources management. Some of the research was presented at the EURO Summer Institute (ESI) devoted toOR in Agriculture and Forest Management held in Lleida (Spain) in 2009. The ESI was supported byEURO: theAssociation ofEuropeanORSocieties (http://www.euro-online. org) and organized by the EUROWorking Group on OR in Agriculture and Forest Management, i.e., ORAFM, (http://www.orafm.org). Since 2003 the group has had regular meetings in Europe at approximately yearly intervals, usually within the EURO conferences. In par-

Book Reviews

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. The editor will be pleased to receive an email from those willing to review a book, with an indication of specific areas of interest. If you are aware of a specific book that you would like to review, or that you think should be reviewed, please contact the editor. The following books are reviewed in this issue of Interfaces, 44(3), May–June 2014: Handbook of Global Logistics: Transportation in International Supply Chains, James H. Bookbinder; Decision Making in Service Industries: A Practical Approach, Javier Faulin, Angel A. Juan, Scott E. Grasman, and Michael J. Fry, eds.; Handbook of Operations Research for Homeland Security, Jeffrey W. Herrmann, ed.; Data Mining for Biomarker Discovery, Panos M. Pardalos, Petros Xanthopoulos, and Michalis Zervakis, eds.; Supply Chain Transformation, Practical Roadmap to Best Practice Results, Richard J. Sherman; Supply Chain Network Design: Applying Optimization and Analytics to the Global Supply Chain, Michael Watson, Sara Lewis, Peter Cacioppi, and Jay Jayaraman.

Stochastic optimization of operational production planning for fisheries

The fishing industry is one of the main contributors to the national economy, value creation, and employment in Norway. Furthermore, it is a significant source of export incomes. The fishing industry is also a well-known arena for applying operations research methodology. Traditionally divided in three main parts, the works within this area have dealt with fish stock and harvesting, fish processing, and marketing. Recently, the focus has shifted to integrated planning, where fishing fleet operations are combined with plant processing. Currently, a broader view of the supply chain needs to be adopted as many companies in this industrial sector are striving to improve their capacity utilizations, operational efficiency, and profitability. Thus, both upstream and downstream uncertainties have to be handled. While it has been recognized that decision flexibility can be used to manage supply chain uncertainty, no known stochastic modeling formulations have explicitly accounted for it in fish processing.To address the described planning challenges, this paper develops an integral stochastic model, incorporating both upstream (raw material quantities) and downstream (finished goods market prices) uncertainties, while accounting for fish quality deterioration and shelf-life restrictions. It is then tested, estimating the potential economic value of flexibility in the supply chain provided by the introduction of super-chilling technologies and application of the described stochastic formulation. This way, it reflects a triangulation of technological development, operational efficiency, and market profitability. Thus, it is a unique opportunity to address the real-world complexity and enhance the body of knowledge in operations research.

On the Complexity of Query Result Diversification

Query result diversification is a bi-criteria optimization problem for ranking query results. Given a database D , a query Q , and a positive integer k , it is to find a set of k tuples from Q ( D ) such that the tuples are as relevant as possible to the query, and at the same time, as diverse as possible to each other. Subsets of Q ( D ) are ranked by an objective function defined in terms of relevance and diversity. Query result diversification has found a variety of applications in databases, information retrieval, and operations research. This article investigates the complexity of result diversification for relational queries. (1) We identify three problems in connection with query result diversification, to determine whether there exists a set of k tuples that is ranked above a bound with respect to relevance and diversity, to assess the rank of a given k -element set, and to count how many k -element sets are ranked above a given bound based on an objective function. (2) We study these problems for a variety of query languages and for the three objective functions proposed in Gollapudi and Sharma [2009]. We establish the upper and lower bounds of these problems, all matching , for both combined complexity and data complexity. (3) We also investigate several special settings of these problems, identifying tractable cases. Moreover, (4) we reinvestigate these problems in the presence of compatibility constraints commonly found in practice, and provide their complexity in all these settings.

Book Reviews

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. The editor will be pleased to receive an e-mail from those willing to review a book, with an indication of specific areas of interest. If you are aware of a specific book that you would like to review, or that you think should be reviewed, please contact the editor. The following books are reviewed in this issue of Interfaces, 44(2), March–April 2014: Efficiency and Logistics, Uwe Clausen, Michael Ten Hompel, and Matthias Klumpp; Managing Safety of Heterogeneous Systems: Decisions Under Uncertainties and Risks, Yuri Emoliev, Marek Makowski, and Kurt Marti; Principles of Business Forecasting, Keith Ord and Robert Fildes; Supply Chain Planning: Practical Frameworks for Superior Performance, Matthew J. Liberatore and Tan Miller; Multicriteria Portfolio Management, Panos Xidonas, George Mavrotas, Theodore Krintas, John Psarras, and Constantin Zopounidis; Handbook of Networks in Power Systems I (Energy), Handbook of Networks in Power Systems II (Energy), Alexey Sorokin, Steffen Rebennack, Panos M. Pardalos, Niko A. Iliadis, and Mario V. F. Pereira, eds.; and Antifragile: Things that Gain from Disorder, Nassim Nicholas Talib.

The impact of customer behavior models on revenue management systems

Revenue management (RM) can be considered an application of operations research in the transportation industry. For these service companies, it is a difficult task to adjust supply and demand. In order to maximize revenue, RM systems display demand behavior by using historical data. Usually, parametric methods are applied to estimate the probability of choosing a product at a given time. However, parameter estimation becomes challenging when we need to deal with constrained data. In this research, we evaluate the performance of a revenue management system when a non-parametric method for choice probability estimation is chosen. The outcomes of this method have been compared to the total expected revenue using synthetic data.

Book Reviews

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. The editor will be pleased to receive an e-mail from those willing to review a book, with an indication of specific areas of interest. If you are aware of a specific book that you would like to review, or that you think should be reviewed, please contact the editor. The following books are reviewed in this issue of Interfaces, 44(1), January–February 2014: Blackett’s War: The Men Who Defeated the Nazi U-Boats and Brought Science to the Art of Warfare, Stephen Budiansky; Handbook of Newsvendor Problems: Models, Extensions and Applications, Tsan-Ming Choi; Measuring the Performance of Public Services: Principles and Practice, Michael Pidd; Portfolio Decision Analysis: Improved Methods for Resource Allocation, Ahti Salo, Jeffrey Keisler, and Alec Morton; Managing Supply Chain Risk, ManMohan Sodhi and Christopher S. Tang; Public Policy Analysis: New Developments, Wil A. H. Thissen and Warren E. Walker; and Global Optimization: A Stochastic Approach, Stefan Schäffler.

Dell’s Channel Transformation: Leveraging Operations Research to Unleash Potential Across the Value Chain

Dell pioneered the direct sales model by offering its customers technology solutions through full-system configurability. In 2007, Dell launched several strategic initiatives to drive channel transformation by offering fixed configurations through online channels, retailers, distributors, and other channel partners. Dell's center of excellence (CoE) in analytics developed solutions that apply operations research (OR) to address key challenges across the value chain and enable profitable growth in the new channels. These solutions include (1) a configuration optimizer to reduce product complexity by identifying fixed hardware configurations (FHCs), which Dell builds and stocks, (2) an online conversion rate accelerator to improve the online customer purchase experience, leading to increased revenues and customer satisfaction, and (3) a retail margin maximizer to improve forecasts, mitigate inventory risk, and recommend promotions to increase margins. Since 2007, OR has helped Dell solve complex business problems and has facilitated its growth in the FHC business to $15 billion. Since 2010, these OR solutions have delivered a margin impact of more than $140 million by reducing markdown expenditures, improving online conversion rates, increasing ocean shipments, and enhancing customer satisfaction.

Optimizing Chevron’s Refineries

Chevron has developed a software modeling tool that its seven company-owned refineries use to select the most profitable raw materials, evaluate product options, optimize refinery processes, and promote efficient capital investments. The tool is a linear program with distributive recursion mathematics, which Chevron uses in operations and strategic planning. Over the past 30-plus years, the company has continually improved this application of operations research, and its complementary and supporting systems and business processes, and they are now deeply embedded into the fabric of Chevron’s downstream business of reliably and efficiently supplying products to our customers. The value that these efforts bring to Chevron now approaches $1 billion annually. We estimate that the cumulative value to Chevron over the past three decades is approximately $10 billion.

Economically Efficient Standards to Protect the Netherlands Against Flooding

In the Netherlands, flood protection is a matter of national survival. In 2008, the Second Delta Committee recommended increasing legal flood protection standards at least tenfold to compensate for population and economic growth since 1953; this recommendation would have required dike improvement investments estimated at 11.5 billion euro. Our research group was charged with developing efficient flood protection standards in a more objective way. We used cost-benefit analysis and mixed-integer nonlinear programming to demonstrate the efficiency of increasing the legal standards in three critical regions only. Monte Carlo analysis confirms the robustness of this recommendation. In 2012, the state secretary of the Ministry of Infrastructure and the Environment accepted our results as a basis for legislation. Compared to the earlier recommendation, this successful application of operations research yields both a highly significant increase in protection for these regions (in which two-thirds of the benefits of the proposed improvements accrue) and approximately 7.8 billion euro in cost savings. Our methods can also be used in decision making for other flood-prone areas worldwide.

Applying operations research to optimize a novel population management system for cancer screening.

To optimize a new visit-independent, population-based cancer screening system (TopCare) by using operations research techniques to simulate changes in patient outreach staffing levels (delegates, navigators), modifications to user workflow within the information technology (IT) system, and changes in cancer screening recommendations. TopCare was modeled as a multiserver, multiphase queueing system. Simulation experiments implemented the queueing network model following a next-event time-advance mechanism, in which systematic adjustments were made to staffing levels, IT workflow settings, and cancer screening frequency in order to assess their impact on overdue screenings per patient. TopCare reduced the average number of overdue screenings per patient from 1.17 at inception to 0.86 during simulation to 0.23 at steady state. Increases in the workforce improved the effectiveness of TopCare. In particular, increasing the delegate or navigator staff level by one person improved screening completion rates by 1.3% or 12.2%, respectively. In contrast, changes in the amount of time a patient entry stays on delegate and navigator lists had little impact on overdue screenings. Finally, lengthening the screening interval increased efficiency within TopCare by decreasing overdue screenings at the patient level, resulting in a smaller number of overdue patients needing delegates for screening and a higher fraction of screenings completed by delegates. Simulating the impact of changes in staffing, system parameters, and clinical inputs on the effectiveness and efficiency of care can inform the allocation of limited resources in population management.

AWARENESS, APPRECIATION AND FAMILIARITY WITH OPERATIONS RESEARCH AMONG MANAGERS IN QUOTED MANUFACTURING FIRMS IN NIGERIA

Unconscious or informal application and failure to acknowledge the use of operations research (OR) approach by corporate managers has been going on globally for a very long time. This largely accounts for the inability of scholars to make accurate assessment of the level of application of operations research in the non-academic environment. It is therefore evident that asking an operations manager whether OR models or methodology is applied by his company may likely not produce a response that truly represents reality as some may be unknowingly making such applications. This study therefore examined the level of awareness of OR among corporations in the Nigerian manufacturing sector. It also assessed the extent of familiarity with OR models among managers in the manufacturing sector and their appreciation of OR techniques as a viable business decision-making tool. Consequently, steps that constitute the decision-making procedure of firms in the manufacturing industry of Nigerian economy were examined to determine the extent to which OR methodology or philosophy may have been incorporated.

Foreword: Special Issue on Mathematical Modeling and Applications of Operations Research

Asian Institute of Technology, Pathumthani, Thailand * Corresponding Author, E-mail: luong@ait.ac.th The Asia Pacific Industrial Engineering and Management Systems (APIEMS) Conferences are annual conferences organized by the Asia Pacific Industrial Engineering and Management Society. The core value of APIEMS is associating and exchanging the better industrial engineering education, researches, and exchange information from different countries. Since the first APIEMS conference organized in 1998 in Beijing, China, APIEMS has rapidly emerged as an important forum for exchange of ideas and information about latest developments in the field of industrial engineering and man-agement system among professionals from Asia-Pacific countries. The 13th Asia Pacific Industrial Engineering and Management Systems Conference (APIEMS2012) was held on December 2-5, 2012 in Phuket City, the capital of the biggest island located in the Andaman Sea of southern Thailand which is also a very famous touristical city. The conference, which covers a wide range of topics in response to the con-ference theme of “Achieving Sustainability through Effective Resource Management”, successfully provided a forum for researchers, university lecturers and engineers to communicate on their latest achievements in the field of industrial engi-neering and management systems and to seek for future collaboration. In this special issue of the Industrial Engineering and Management Systems Journal (IEMS), six papers were se-lected among more than 250 submitted papers to the conference after a usual reviewing process in accordance with the rigorous standards of the journal. The first paper by Chamnanlor

Book Reviews

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. The editor will be pleased to receive an email from those willing to review a book, with an indication of specific areas of interest. If you are aware of a specific book that you would like to review, or that you think should be reviewed, please contact the editor. The following books are reviewed in this issue of Interfaces, 43(6), November–December 2013: Poor Economics, Abhijit Banerjee and Esther Duflo; Integration of Information and Optimization Models for Routing in City Logistics, Jan Fabian Ehmke; Complementarity Modeling in Energy Markets, Steven A. Gabriel, Antonio J. Conejo, J. David Fuller, Benjamin F. Hobbs, and Carlos Ruiz; Community-Based Operations Research: Decision Modeling for Local Impact and Diverse Populations, Michael P. Johnson; Warehousing in the Global Supply Chain, Riccardo Manzini; Mathematical Optimization of Water Networks, Alexander Martin, Kathrin Klamroth, Jens Lang, Gunter Leugering, Antonio Morsi, Martin Oberlack, Manfred Ostrowski, and Roland Rosen; Advanced Planning in Supply Chains, Hartmut Stadtler, Bernhard Fleischmann, Martin Grunow, Herbert Meyr, and Christopher Sürie; and Fundamentals of Queuing Systems: Statistical Methods for Analyzing Queuing Models, Nick T. Thomopoulos.

Special section on behavioral considerations in developing and applying operations research models

Special section on behavioral considerations in developing and applying operations research models

Book Reviews

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. The editor will be pleased to receive an email from those willing to review a book, with an indication of specific areas of interest. If you are aware of a specific book that you would like to review, or that you think should be reviewed, please contact the editor. The following books are reviewed in this issue of Interfaces, 43(5), September–October, 2013: Optimization for Industrial Problems, Patrick Bangert; Quantitative Problem Solving Methods in the Airline Industry, Cynthia Barnhart and Barry Smith; Introduction to Probability and Stochastic Processes with Applications, Liliana Blanco Castañeda, Viswanathan Arunachalam, and Selvamuthu Dharmaraja; Humanitarian Logistics: Cross-Sector Cooperation in Disaster Relief Management, Alessandra Cozzolino; Enterprise Analytics: Optimize Performance, Process, and Decisions Through Big Data, Thomas H. Davenport; Automation in Warehouse Development, Roelof Hamberg and Jacques Verriet; Data Processing for the AHP/ANP, Kou Gang, Daji Ergu, Yi Peng, and Yong Shi. Modeling with Stochastic Programming, Alan J. King and Stein W. Wallace.