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Full-Text Articles in Operations Research, Systems Engineering and Industrial Engineering
Project Management Decisions With Uncertain Targets, Jeffrey Keisler, Robert Bordley
Project Management Decisions With Uncertain Targets, Jeffrey Keisler, Robert Bordley
Jeffrey Keisler
Project management decision rules presume that fixed and inflexible targets have been defined for the project. If a project's slack is defined as the difference between actual project performance and these targets, then these decision rules can be characterized as maximizing the probability that slack is non-negative (i.e., maximizing the probability of meeting the targets). These rules rely on z-scores to compare uncertain performance to target levels. Following these decision rules will not always suffice for the project manager to act consistently with customer preferences. In particular, actual requirements may be uncertain or subject to change, and customers may have …
Optimal Sequential Exploration: A Binary Learning Model, J. Eric Bickel, James E. Smith
Optimal Sequential Exploration: A Binary Learning Model, J. Eric Bickel, James E. Smith
Eric Bickel
In this paper, we develop a practical and flexible framework for evaluating sequential exploration strategies in the case where the exploration prospects are dependent. Our interest in this problem was motivated by an oil exploration problem, and our approach begins with marginal assessments for each prospect (e.g., what is the probability that the well is wet?) and pairwise assessments of the dependence between prospects (e.g., what is the probability that both wells i and j are wet?). We then use information-theoretic methods to construct a full joint distribution for all outcomes from these marginal and pairwise assessments. This joint distribution …
Some Determinants Of Corporate Risk Aversion, Eric Bickel
Some Determinants Of Corporate Risk Aversion, Eric Bickel
Eric Bickel
In this paper we roughly quantify the degree of risk aversion induced by three rationales for corporate risk management: the cost of financial distress, costly external finance, and the principal-agent relationship between shareholders and management. In so doing, we provide a foundation for the use of corporate utility functions. However, we are unable to fully support the degree of risk aversion reported in the decision analysis literature. Specifically, financial distress and costly external finance appear to induce relatively little risk aversion, while principal-agent concerns lend only partial support to published corporate risk tolerance guidelines.
Teaching Decision Making With Baseball Examples, J. Eric Bickel
Teaching Decision Making With Baseball Examples, J. Eric Bickel
Eric Bickel
Sports examples can be wonderful vehicles for teaching OR/MS concepts. Baseball is particularly well suited to teaching statistics/probability, Markov decision processes, and decision analysis. This paper details a baseball example I developed to teach fundamental decision making skills. This example has been used successfully to teach decision making to undergraduates and graduates in technical and non-technical disciplines. It has also been used effectively in industry for training new MBAs and seasoned executives.