Convenient flight connections vs. airport congestion: Modeling the ‘rolling hub’

This paper provides the first analysis of the trade-off between convenient flight connections and airport congestion, a fundamental but untreated element in the economics of hub-and-spoke networks. A continuous spatial model illustrates this trade-off in a framework where a small gap between flight operating times raises congestion while also shortening a connecting passenger’s layover time. When the passenger’s cost per unit of layover time rises, the monopoly airline chooses to narrow the gap between its flights, yielding shorter layovers but more congestion. A discrete spatial model, where flights congest one another only if they operate in the same discrete period, makes this layover-cost effect discontinuous: the monopoly carrier concentrates (deconcentrates) its flights when this cost is high (low) relative to the costs of congestion. When fringe carriers are present, however, the hub carrier always concentrates its flights, either partially or fully. But the presence of a second hub carrier leads to an equilibrium mirroring the monopoly outcome: the carriers concentrate their flights in different periods when the layover cost is high and deconcentrate them otherwise. The paper also presents a welfare analysis, showing that movement from the equilibrium to the social optimum typically requires greater carrier separation.     

Patent Renewals as Options: Improving the Mechanism for Weeding Out Lousy Patents

This paper examines how patent renewal fees may be restructured to discourage low-value patents with the goal of reducing the burden on patent offices without unduly impairing innovation incentives. We depart from Pakes’ (1986, Econometrica, 54, 755–784) real-option model by moving to an approach involving binomial trees, widely used in valuing financial options. The new approach has the advantage of allowing the dynamics of the patent rent to follow a wide range of stochastic processes. The model is estimated using French data from 1970 to 2002. Policy simulations cast some doubt on the relevance of the current schedule of renewal fees. An alternative fee schedule is suggested.     

风中飘来“语音云”

乘着移动互联网和云计算的"东风",语音技术在消费应用市场的商业想象正被引爆。一则荣威车主"调戏"iVoka的视频在网上流传甚广——iVoka是荣威350上装配的语音云驾驶系统——当车主对着iVoka说"我爱你"的时候,iVoka不无醋意地表示"这句话你也对Siri说过吧",车主只好无奈认栽。     

On the Absence of Directional Price Discrimination in the U.S. Airline Industry*

Certain forms of price discrimination in oligopoly markets can lead to more aggressive competition and lower profits, yet few empirical studies examine how extensively such strategies are used. I consider one such strategy, testing whether airlines charge different prices on the same flights to passengers that originate from different endpoints. Using fare quote data I formulate a new approach to measure discrimination while controlling for cost heterogeneity and find that carriers within the U.S. domestic market do not engage in directional price discrimination despite frequently using other similar pricing strategies that are unlikely to enhance competition.     

多约束事件下施工进度计划控制技术

通过对影响工程进度的约束事件的分析，在横道图和关键线路网络图（CPM）的基础上，力图建立一种施工现场实用直观的进度计划控制图技术。有利于工期的控制，用其作为进度记录和报告、评价延误和变更影响的载体也非常方便，可以作为调整项目完工时间的模型。     

Achievement assessment for enterprise resource planning (ERP) system implementations based on critical success factors (CSFs)

This paper addresses a framework to critical success factor (CSF) assessment of Enterprise Resource Planning (ERP) system implementation, and proposes a structured approach to help a small manufacturing enterprise (SME) identify the key requirements and measurements that determine its achievement of ERP implementation. Based on realistic data, critical success factors are converted into quantitative information to reflect measurements including cost, schedule, and goal achievement that must be addressed during implementation. One outcome of this study is that some CSFs are more important than others. Another outcome is that great emphasis should specifically be placed on CSF5, “people.” A third outcome is that a “good” balance can be reached based on schedule, cost, and achievement level such that desired achievement levels are attained at a low cost and a reasonably short implementation time (schedule) using simulation.     

Optimal dynamic volume-based price regulation

We consider a model of optimal price regulation in markets where demand is sluggish and asymmetric providers compete on quality. Using a spatial model, which is suitable to investigate the health care and education sector, we analyse within a dynamic set-up the scope for price premiums or penalties on volume. Under the assumption of symmetric cost information, we show that the socially optimal time path of quality provision off the steady state can be replicated by a simple dynamic pricing rule where the dynamic part of the rule is ex-ante non-discriminatory in the sense that the price premium or penalty on volume is common across providers, despite their differing production costs. Whether the price schedule involves a penalty or a premium on volume relates to two concerns regarding production costs and consumer benefits, which go in opposite directions. Price adjustments over time occur only through the price penalty or premium, not time directly, which highlights the simplicity and thus applicability of this regulation scheme.     

Kurzfrist-Lastprognose für die Day-Ahead- und Intraday-Stromnachfrage bei sich systematisch ändernden Lasten

Load forecasts are used in various fields of the German energy economic to plan and to optimize the schedule of the power generation or the purchase of power from the markets based on the results of the forecasts. Therefor accurate load forecasts are necessary. But many load forecasting models reach their limits when dealing with systematic changes in the profile of the energy demand, since the model is usually calibrated by historic data so the relation between the load and the input parameters are estimated. Due to changes in the load profile the load level is moving to another level compared to the historic one. While the forecasting model is still calibrated on the old level, this can lead to higher forecasting errors and these can in turn have negative consequences on the following optimization steps. That is why a methodological approach is presented so that the forecasting model is able to adapt a systematic change in the load profile. Therefor the presented approach is at first applied to a case of application, before it is applied to two more extreme variations of the load profile to identify possible limits of the presented approach.     

R&D project selection and scheduling for organizations facing product obsolescence

Research and development is very crucial in an organization that faces rapid product obsolescence. Our thesis is that R&D project scheduling and resource planning should be born out of the optimum product launch plan which, in turn, should be in adherence to the growth rate targeted by the organization. Such an approach would ensure that the R&D activities of the organization are in tune with the Organization's goals. The absence of such coordinated R&D planning would hamper the productivity and profitability of the organization. This paper attempts to develop a methodology and model that would enable the streamlining of R&D project schedule. A real life case application has also been illustrated.     

Predicting Spatial Patterns of House Prices Using LPR and Bayesian Smoothing

This article is motivated by the limited ability of standard hedonic price equations to deal with spatial variation in house prices. Spatial patterns of house prices can be viewed as the sum of many causal factors: Access to the central business district is associated with a house price gradient; access to decentralized employment subcenters causes more localized changes in house prices; in addition, neighborhood amenities (and disamenities) can cause house prices to change rapidly over relatively short distances. Spatial prediction (e.g., for an automated valuation system) requires models that can deal with all of these sources of spatial variation. We propose to accommodate these factors using a standard hedonic framework but incoporating a semiparametric model with structure in the residuals modeled with a partially Bayesian approach. The Bayesian framework enables us to provide complete inference in the form of a posterior distribution for each model parameter. Our model allows prediction at sampled or unsampled locations as well as prediction interval estimates. The nonparametric part of our model allows sufficient flexibility to find substantial spatial variation in house values. The parameters of the kriging model provide further insights into spatial patterns. Out–of–sample mean squared error and related statistics validate the proposed methods and justify their use for spatial prediction of house values.     

Optimizing the storage assignment in a warehouse served by milkrun logistics

This paper addresses the problem of storage assignment in a warehouse characterized by multi-command picking and served by milkrun logistics. In such a logistic system, vehicles circulate between the warehouse and the production facilities of the plant according to a pre-defined schedule, often with multiple cycles (routes) serving different departments. We assume that a request probability can be assigned to each item and each cycle, which leads to a special case of the correlated storage assignment problem. A MIP model is proposed for finding a class-based storage policy that minimizes the order cycle time, the average picking effort, or a linear combination of these two criteria. Computational experiments show that our approach can achieve an up to 36–38% improvement in either criterion compared to the classical COI-based strategy.     

Das statuierte Exempel: Die EU reguliert internationale Luftfahrt hinsichtlich ihres Klimaeffekts unilateral

There is a new entrant to the European Union’s Emission Trading System (EU ETS): International Aviation. The negotiations of the three legislative bodies have been finalized end of June, 2008. The EU’s ?International Aviation“ does not only embrace member states’ national flights and EU-specific, Intra EU Flights’, but any flight arriving at or departing from EU territory. This is a pioneering attempt for a general tendency in extending the regional coverage of the European style ETS. It is, furthermore, a kind of a first step in the direction of what will be established in the post-2012 regime as ‘sector approaches’. Most important is the ‘asymmetric’ approach, which may allow a regional power (as the EU) to impose an unilateral approach of a broader regional range of influence, without allowing to become subject of competitive disadvantages.     

A local search algorithm for the optimization of the stochastic economic lot scheduling problem

This paper describes a model for the stochastic economic lot scheduling problem (SELSP) and a Local Search heuristic to find close to optimal solutions to this model. The SELSP considers multiple products, which have to be scheduled on a single facility with limited capacity and significant setup times and costs. The demand is modeled as a stationary compound renewal process. The objective is to find a schedule that minimizes the long-run average costs for setups and inventories while satisfying a given fill rate. We use a cyclic scheduling approach in which the individual cycle time of each product is a multiple of some basic period (fundamental cycle).For the deterministic version of the SELSP, efficient heuristics have been developed which guarantee the feasibility of the solution by adding an additional constraint to the problem. In our case this is not sufficient, because for the calculation of the average inventory levels and fill rates we need to develop a schedule with detailed timing of the lots. We present an efficient heuristic for this scheduling problem, which can also be used to check the feasibility of the solution. Thereby, the most time-consuming step (the calculation of average inventory levels and fill rates) is only performed for a limited set of candidates.The algorithm was tested on deterministic benchmark problems from literature and on a large set of stochastic instances. We report on the performance of the heuristic in both cases and try to identify the main factors influencing the objective.     

Organizing for Product Development Projects

How should companies organize to support the development of new products? Erik Larson and David Gobeli assessed the relative effectiveness of five different project management structures by comparing the performance of 540 development projects in terms of cost, schedule and technical performance. The findings contradict Peters and Waterman's popular conclusion that project teams are superior to matrix structures for developing new products and services. Both the balanced matrix and project matrix compared favorably with project teams in terms of cost, schedule and technical performance. Furthermore, the project matrix received a stronger recommendation from managers than the project team. Little support was found for either the functional or functional matrix approach to project management.     

Dual Kriging: An Exploratory Use in Economic Metamodeling

Sensitivity analysis of capital investments can be effectively carried out by employing a metamodel approach and experimental designs. Although polynomial regression metamodels are popular and straightforward, they do not consider spatial relationships among the data. Dual kriging is an estimation technique that allows the incorporation of spatial correlation into the interpolation or estimation process and has been used primarily in geophysical statistical analysis. This article investigates the dual kriging approach as an alternative technique to polynomial regression and artificial neural networks for metamodel analysis of capital investments. It is observed that dual kriging shows potential in performing sensitivity analysis as its accuracy is as good as, or better than, other techniques, and, while model building and interpretation is more complicated than that of polynomial regression, it is significantly more straightforward than that of neural networks. Furthermore, this is the first known work of using kriging in the field of engineering economics; there may be other useful applications such as in cost estimation.     

A simple model of R & D project dynamics

A simple dynamic model is developed that describes some of the important aspects of research and development projects. Its purpose is illustration of the applicability of dynamic modelling to understanding the key factors affecting R & D performance. The model recognizes the differences among real, perceived, and reported progress on the job. It also includes the effect of schedule pressures on productivity. Simulation results are presented that, among other things, illustrate the trade-off between meeting schedule and maintaining organizational stability, the effects of rapid problem detection and response, and the difficulties due to the intangible nature of R & D progress.     

进度控制信息化初探

章通过对进度控制信息化进行初步研究，讨论了建筑施工企业进行信息化的背景及为企业带来的竞争优势，并通过研究建立了进度控制信息化模型，为信息化实现提供了一定的理论基础。同时，阐述了发展进度控制信息化系统的必要性，从而为在建筑施工企业的时度控制阶段实现信息化提供了一定的指导作用。     

Network Structure and Airline Scheduling

This paper provides a simple analysis of the effects of network structure on the scheduling, traffic, and aircraft size choices of a monopoly airline. The analysis shows that switching to a hub-and-spoke network leads to increases in both flight frequency and aircraft size, while stimulating local traffic in and out of the hub. In addition, HS networks are shown to be preferred by the airline when travel demand is low, when flights are expensive to operate, and when passengers place a high value on flight frequency but are not excessively inconvenienced by the extra travel time required for a connecting trip. The welfare analysis shows that the flight frequency, traffic volumes, and aircraft size chosen by the monopolist are all inefficiently low under both network types. Moreover, in the most plausible case, the monopolist's network choice exhibits an inefficient bias toward the HS network, apparently reflecting an excessive desire to economize on the number of flights.     

A Spatiotemporal Autoregressive Price Index for the Paris Office Property Market

This article applies the spatiotemporal hedonic approach to the analysis of office transaction prices in the Paris property market ( i.e ., central Paris and its inner suburbs). The analysis focuses primarily on the market's two main business districts (the Central Business District and the La Défense District). We find that spatial and temporal dependence effects are strongly present in these submarkets. Additionally, we propose a hybrid method for incorporating a temporal regime switch into the spatiotemporal autoregressive model. The regime switching around 1997 ( i.e. , in the presence of temporal heterogeneity) substantially affects the significance of spatial and temporal dependences. Finally, we build a new price index that incorporates both spatiotemporal dependences and temporal heterogeneity. This index differs strongly from the usual hedonic price index.     

Valuation of Learning Options in Software Development Under Private and Market Risk

Commercial software development is an inherently uncertain activity. Private risk is high, schedule and cost overruns are common, and market success is elusive. Such circumstances call for a disciplined project evaluation approach. This paper addresses the use of market and earned value management data in assessing the economic value of commercial software development projects that are simultaneously subject to schedule, development cost, and market risk. The assessment is based on real options analysis, a financial valuation technique that can tackle dynamic investment decisions under uncertainty. The paper demonstrates the application of real options analysis to a development scenario that consists of two consecutive stages: a mandatory prototyping stage and an optional full-development stage. The full-development stage is undertaken only if the prototype is successful and the market outlook is sufficiently positive at the end of the prototyping stage, thus giving the full-development stage the flavor of an option. The project's staged design increases its value. Real options analyses capture the extra value due to optionality.