Gary D. Eppen

University of Chicago | UC · Chicago Booth School of Business

We focus on the problem of buying fashion goods for the “big book” of a catalogue merchandiser. This company also owns outlet stores and thus has the opportunity, as the season evolves, to divert inventory originally purchased for the big book to the outlet store. The obvious questions are: (1) how much to order originally, and (2) how much to dive...

We focus on backup agreements between a catalog company and manufacturers---a scheme to provide upstream sourcing flexibility for fashion merchandise. A backup agreement states that if the catalog company commits to a number of units for the season, the manufacturer holds back a constant fraction of the commitment and delivers the remaining units b...

It has long been a marketing axiom that customers buy bundles of satisfaction, not products. It follows, then, that they'll respond to certain combinations of products and services--air conditioners with free installation, combinations of software packages, or season tickets with parking privileges. The difficulty is in devising the bundles that bo...

Production capacity has always been one of the most important strategic variables for the major automobile companies. Decisions by individual companies concerning the overall level of capacity, the type of facility (e.g., the level of flexibility), and the location of that capacity (e.g., in the United States or abroad) are discussed in great detai...

We describe a model developed for General Motors to aid in making decisions about capacity for four of their auto lines. The model incorporates elements of scenario planning, integer programming, and risk analysis. All the input and output is done using Lotus 1-2-3. Although the presentation is motivated by the particular application in the auto in...

We consider the problem of setting safety stock when both the demand in a period and the lead time are random variables. There are two cases to consider. In the first case the parameters of the demand and lead time distributions are known; in the second case they are unknown and must be estimated. For the case of known parameters a standard procedu...

Mixed-integer programming models are typically not used to solve realistic-sized production scheduling problems because they require exorbitant solution times. We impose a useful taxonomy on production scheduling problems and develop alternative formulations for a wide variety of problems within the taxonomy. The linear programming relaxation of th...

In this paper, a mixed-integer programming model is developed to aid management in the analysis of a distribution problem in the steel industry. In this problem, the company has seven service centers located in the northeastern part of the country. In order to maintain reasonable inventory levels and fast customer service, there is a considerable a...

This paper reconciles three stylized facts about capital budgeting in firms and shows that they are tied to the presence of asymmetric information among the several members of the firm, each with his or her own objectives and decisions. The facts of interest are: 1. The existence of organizational slack. 2. The “rationing” of resources within organ...

Food retailers regularly offer products for less than normal market price in special sales or deals. This paper briefly examines several common explanations for this phenomenon and finds the analyses to be less than complete. It then presents an explanation for dealing of storable products based on the idea of transfering inventory carrying costs f...

Food retailers regularly offer products for less than normal market price in special sales or deals. This paper briefly examines several common explanations for this phenomenon and finds the analyses to be less than complete. It then presents an explanation for dealing of storable products based on the idea of transfering inventory carrying costs f...

This paper concerns a multilocation newsboy problem with normal demand at each location and identical linear holding and penalty cost functions at each location. Consolidation of demand from several facilities is considered, and an expression is derived for the resulting expected holding and penalty costs as a function of the demand parameters for...

A method for determining where to locate the inspection stations in a multistage production process with imperfect inspection is presented. Dynamic programming is used to establish that the optimal expected total cost function at every stage is piecewise linear and concave. While the optimal policy at every stage usually consists of one "inspect" r...

This paper describes the form of the optimal operating policy for a three asset cash balance problem in which (1) holding and penalty costs are proportional to the level of the cash balance, (2) the costs incurred in transferring funds between cash and earning assets are proportional to the amount of funds transferred, and (3) inflows and outflows...

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Traducción de: Introductory management science

Traducción de: Introductory management science Revisión y reescritura del texto original de Eppen y Gould, por Jeffrey Moore y Larry Weaatherford

Thesis (Ph. D.)--Cornell University, 1964.

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Traducción de: Introductory management science: decision modeling with spreadsheets Incluye bibliografía e índice

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Reimpresión en 1976 Incluye bibliografía

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This paper considers an N period production planning problem in which a sequence of known demands d 1 , d 2 ,…, d N must be satisfied. The cost of production in period t consists of a setup cost K t plus a marginal cost per unit c t . The cost of carrying a unit of inventory into period t is h t − 1 . An optimal policy is a production plan that sat...

This paper presents algorithms for finding solutions and planning horizons to two related T period, one product, deterministic production problems with capacity constraints and penalty costs for unsatisfied demand. The algorithms are derived from an application of Lagrangian techniques to problems with inequality constraints.

This paper is concerned with the linear programming solutions to sequential decision (or control) problems in which the stochastic element is Markovian and in which the objective is to minimize the discounted sum of expected costs when a discount factor \lambda, 0 \leqq \lambda < 1, is used. In praticular, it deals with a class of "separable" probl...

This paper considers a model for the maintenance of a deteriorating system with a discrete state space. At discrete points in time a sequence of maintenance decisions is to be made. These decisions are either to leave the system in its present state, or by performing maintenance to place it in a "higher state." Between maintenance visits the behavi...