This essay, based on my 2012 MSOM Fellow Lecture, discusses an idea that has been useful for developing effective methods to set staffing levels in service systems: offered load analysis. The main idea is to tackle a hard problem by first seeking an insightful simplification. For capacity planning to meet uncertain exogenous demand, offered load analysis looks at the amount of capacity that wou...

This paper presents the new mathematical model for determining the optimal ordering policy for industrial and commercial companies. In the previous research, the numerous inventory models under inflationary conditions have been developed. In these models, the demand rate, usually, has been considered constant and well known, time-varying, stock dependent or price-dependent. But, the demand rate...

In many real inventory situations of short life-cycle products the decision maker often has to provide a subjective estimate of new demand distribution due to the lack of historical data. Thus, both randomness and uncertainty simultaneously appear in a single-period inventory (newsboy) problem. In this paper, we develop both single-item and multi-item single-period inventory models when market ...

The current financial crisis forces companies to allocate IT budgets more effectively and thus increases the demand for suitable methods to evaluate the financial impact of IT investments. This especially applies to service-orientation, a design paradigm which facilitates the standardisation and flexibilisation of business processes and IT applications, topics that currently are very much in vo...

The most challenging issue of today’s production management is certainly to manage networked organisations under an uncertain demand so that to provide a good service to the customer at low cost. In this article, a model of the decision making parameters involved in this management process is suggested, on the base of case studies. A mixed integer linear planning model embedded in a framework s...

With the high accident rate of civil aviation, medical resource inventory becomes more important for emergency management at the airport. Meanwhile, medical products usually are time-sensitive and short lifetime. Moreover, we find that the optimal medical resource inventory depends on multiple factors such as different risk preferences, the material shelf life and so on. Thus, it becomes very c...

This paper develops Michael Grossman's demand-for-health model by letting the depreciation rate depend upon the level of health, by letting the incidence and size of illness be uncertain and by investigating how the individual's demand for health would be affected by the introduction of insurance. Beside the more theoretical results, there are also some results with important policy implication...

In ordinary rst order logic, a valid inference in a language L is one in which the conclusion is true in every model of the language in which the premises are true. To accommodate inductive/uncertain/probabilistic/nonmonotonic inference, we weaken that demand to the demand that the conclusion be true in a large proportion of the models in which the relevant premises are true. More generally, we...

One of the ultimate targets of lean manufacturing paradigm is to balance production and produce at takt time in production cells. This paper investigates the performance of a lean cell that implements the previous lean goals under uncertainty. The investigation is based on a system dynamics approach to model a dynamic lean cell. Backlog is used as a performance metric that reflects the cell’s r...

Markov-modulated processes have been used in stochastic inventory models with setup costs for modeling demand under the innuence of uncertain environmental factors, such as uctuating economic and market conditions. The analyses of these models have been carried out in the literature only under the assumption that unsatissed demand is fully backlogged. The lost sales situation occurs in many ret...