An economic-statistical design of double sampling control chart

The double sampling (DS) chart can reduce the sample size when monitoring the process mean. In this study, Duncan's cost model was modified by adding the statistical constraints to develop the design model of DS chart for the optimization of design parameters—sample size, control limit coefficient, warning limit coefficient and sampling interval. A numerical example was provided to illustrate the use of this model. A sensitivity analysis of the effects of model parameters and statistical constraints on the optimal design of DS chart was also performed.     

Order and inventory variance amplification: The equivalence of discrete and continuous time analyses

The well-known “Bullwhip Effect” concerns the increasing variance of orders as they proceed through the supply chain. In the continuous time representation we solve the delay-differential equation for the inventory balance, which is coupled to the ordering policy. The time domain evolution of the system emerges. We calculate the Bullwhip Effect and compare it to known results for the discrete time representation. The discrete and continuous Bullwhip Effect expressions have similar structures. We show that the two domains are managerially equivalent so that in practice either domain can be used to study a supply chain.     

Do Article 22 exemptions adequately stimulate investments in European gas markets?

Stimulating investments whilst introducing competition is a major policy issue for European gas markets. The current Article 22 exemptions regime, which is an application to the gas market of the access holiday theory, is designed to address this issue. Though useful, the access holiday theory provides an incomplete picture. In order to adequately analyze the exemptions regime, this paper incorporates the real options theory of investments into the analysis. Combining both theories provides the properties of an exemptions regime that better stimulates investments in gas. The current exemptions regime has some shortcomings, in particular regarding its risk criterion. A better exemptions regime would grant less exemptions, but if it does, allows higher profits during the exemption. Revised version of a paper presented at the European Doctoral Seminar on Natural Gas, State University, Moscow, November 24, 2007. I would like to thank the participants, especially Martin Gilman and Franz Hubert, as well as Koen Caminada, Ben van Velthoven and a referee of this journal for their comments and suggestions.