Operations Research, Systems Engineering and Industrial Engineering Commons^™

The Pricing Of Multiple Exercisable American-Style Real Options, Yu Meng

Doctoral Dissertations

"Real options embedded in a project provide management with the flexibility to alter initial investment decisions, thus making them a practical tool for project planning and budgeting. Additional values are contributed to the underlying project due to the flexibilities that are provided by real options. This dissertation presents two models for pricing multiple exercisable American real options, one that employs the binomial tree method and the other one that employs the finite difference method. Different examples of multiple exercisable real options are discussed to demonstrate the two pricing models. Interactions between options and reality constraints are also considered. These two …

Two Essays On The Domain Translation From Financial Options To Real Options, Hongyan Chen

Doctoral Dissertations

"Real options (ROs) extend the financial option pricing theory to the valuation of real asset investment and managerial flexibility under uncertainty. However, differences between financial and non-financial markets, and the complex real world environment of applications, build obstacles for the domain translation from financial options to ROs.

This dissertation is motivated by the challenges of domain translation and developed in two essays. The first essay studies the incentive function of ROs (named the RO incentive). The essay develops an option-game framework to model the RO incentive, examines the change of investment behavior caused by the RO incentive, and values the …

Approximate Policy Iteration For Markov Control Revisited, Abhijit Gosavi

Engineering Management and Systems Engineering Faculty Research & Creative Works

Q-Learning is based on value iteration and remains the most popular choice for solving Markov Decision Problems (MDPs) via reinforcement learning (RL), where the goal is to bypass the transition probabilities of the MDP. Approximate policy iteration (API) is another RL technique, not as widely used as Q-Learning, based on modified policy iteration. in this paper, we present and analyze an API algorithm for discounted reward based on (i) classical temporal differences update for policy evaluation and (ii) simulation-Based mean estimation for policy improvement. Further, we analyze for convergence API algorithms based on Q-factors for (i) discounted reward and (ii) …

Preface To Part Iii: Model Based Systems Engineering, Steven Corns

Engineering Management and Systems Engineering Faculty Research & Creative Works

No abstract provided.

Enabling Systems And The Adaptability Of Complex Systems-Of-Systems, Charles O. Adler, Cihan H. Dagli

Engineering Management and Systems Engineering Faculty Research & Creative Works

For complex techno-social system-of-systems, the system's robustness and its ability to adapt to changing environments and circumstances over the life cycle of the systems is an important measure of system quality and effectiveness. the IEEE 15288-2004 standard describes the concept of "enabling systems" that provide non-operational services to the system-of-interest at various times in the system life cycle. This concept of enabling systems provides critical components and perspective in the architecting and analysis of systems-of-systems adaptability and capabilities over time. Enabling systems also provide a potential strong link between the technical system and larger environmental effects such as economic conditions. …

Computational System Architecture Development Using A Holistic Modeling Approach, Renzhong Wang, Cihan H. Dagli

Engineering Management and Systems Engineering Faculty Research & Creative Works

This paper presents an innovative system architecture development framework that allows the search of optimum architecture solutions within large design space by automating certain model construction, alternative generation, simulation, and assessment tasks. Such framework is facilitated by a holistic modeling approach that combines the capabilities of Object Process Methodology (OPM), Colored Petri Net (CPN) and feature model. the resultant holistic model not only can capture the structural, behavior, and dynamic aspects of a system, allowing strong analysis methods to be applied, but also can specify the architectural design space allowing generation of architecture alternatives that cover it. the proposed framework …

Application Of Model-Based Systems Engineering On A University Satellite Design Team, Dustin Nottage, Steven Corns

Engineering Management and Systems Engineering Faculty Research & Creative Works

System Engineering is a foundation of the Missouri S&T's Satellite Design Team, although it is not explicitly stated at all times. However, implementation of the systems engineering process within a student design team presents unique challenges. Student design teams have a high personnel turnover, a limited time commitment due to classes, some new members have little to no experience, and a sometimes lack of motivation to participate since it is volunteered time. the largest problem on the team is getting the new members knowledgeable about the system so they can start contributing as fast as possible. the other big problem …

Eustressed Or Distressed? Combining Physiology With Observation In User Studies, Avinash Wesley, Peggy Lindner, Ioannis Pavlidis

Engineering Management and Systems Engineering Faculty Research & Creative Works

In this article the authors describe a novel way to conduct user studies via the combination of a physiological and an observational information channel. The method enables not only the quantification of arousing emotional states but also their disambiguation into positive or negative instances. The physiological channel targets sympathetic responses and has materialized as a perspiratory signal extracted from thermal imagery of the perinasal area. The observational channel has materialized via decoding of facial expressions. However, while such decoding is usually performed in the visible spectrum, the authors have developed an algorithm to carry this out in thermal imagery instead. …

Creating A State-Wide Transfer Program For Engineering Technology And Technology Management Studies, Gregory Arbuckle, Mark Doggett

SEAS Faculty Publications

The primary purpose of the Western Kentucky Pipeline for 2+2+2 Engineering Technology and Technology Management (ET/TM) students program is to significantly increase degree production and workforce preparation in central and western Kentucky through the construction of a long-term sustainable, reproducible model bridging program of cooperation between Western Kentucky University (WKU), Murray State University (MSU) and the Kentucky Community and Technical College System (KCTCS). The program will significantly increase industrial and technology education opportunities, technology enrollment and two and four-year degree completion. Additionally, this project supports the Kentucky Council on Postsecondary Education’s (CPE) goal to double the overall number of undergraduate …

Impact Of Rotated Aisles On Travel Distance In Manufacturing Facilities, Dale Masel, Samantha Hedges

12th IMHRC Proceedings (Gardanne, France – 2012)

To design a facility, expected flows between the resources is one of the most important input. Flows are usually calculated given some statistics of previous periods or from the expected demand and the process required. However, in a refurbishing and recycling facility, flows are very fluctuating and not trivial to predict. The quantity produced by such facility not only depends on the demand but also on the supplies which are returned products under guaranty or discarded products after their end-of-use. The uncertainty and the variability on these supplies are often higher than the one on the demand which makes it …

Simulation-Based Performance Improvement Of A Defense Logistics Warehouse, Banu Y. Ekren, Gerald W. Evans, Sunderesh S. Heragu, John S. Usher

12th IMHRC Proceedings (Gardanne, France – 2012)

Warehouses play a critical role in supply chains. They serve as a vital link between manufacturers and customers. In this study, we investigate performance of the largest warehouse (Eastern Distribution Center - EDC) of the Defense Logistics Agency (DLA) located in New Cumberland, PA and propose a near optimum design for the receiving area of the warehouse to improve its performance. First, we develop a simulation model of the system. Second, we interface an optimization model with the simulation in order to optimize the number of people working at the induction stations. In the optimization model, our goal is to …

Optimal Design Of Container Terminal Layout, Debjit Roy, Ren´E De Koster

12th IMHRC Proceedings (Gardanne, France – 2012)

Due to rapid growth in foreign trade using sea vessels, there is a growing focus in improving the infrastructure and operational efficiencies at the container terminals. Particularly, the operational responsiveness of loading and unloading of containers, affects the vessel idle times and profitability of the shipping liners. In this research, we deter- mine optimal stack layout design, which minimizes the container unload times using Automated Guided Vehicles (AGVs). To analyze alternate stack layout designs, we develop integrated queuing network models that capture the stochastic interactions among the container terminal processes (quayside, vehicle transport, and stack side), and provides realistic estimates …

Cycle Time Models For Aisle Changing As/Rs Considering Acceleration/Deceleration, Jörg Oser

12th IMHRC Proceedings (Gardanne, France – 2012)

In multi-aisle AS/RS systems one or more S/R machines serve several aisles with storage racks on both sides of the aisle. An important feature of multi-aisle configurations are aisle changing devices with transfer cars, curve guided aisle switching mechanisms or closed loop rail tracks with curved sections for a two-aisle layout. These systems offer an economic solution, when the number of storage and retrieval transactions is low and storage volume is high. One or several S/R machines each serving a specified number of aisles can be arranged in various layouts to meet the required storage capacity and throughput.

The Order Picking Problem In Fishbone Aisle Warehouses, Melih Celik, Haldun Sural

12th IMHRC Proceedings (Gardanne, France – 2012)

A recent trend in the layout design of unit load warehouses is the application of layouts without conventional parallel pick aisles and straight middle aisles. Two examples for such designs are flying- V and fish bone designs for single and dual command operations. In this study, we consider the same layout types under the case of multiple-item pick lists and show that, for both layout types, the routing problem can be solved in polynomial time. We also propose simple heuristics for this problem inspired by those put forward for parallel-aisle warehouses. Our computational results reveal that under certain cases, fish …

How To Choose An Order-Picking System, Marita Ellinger, Tim Geißen, Detlef Spee

12th IMHRC Proceedings (Gardanne, France – 2012)

Order-Picking-Systems are the parts of material flow systems, which have the largest variance of deployment alternatives. Since a long time there have been many attempts to systematize the way of identification of the order-picking- ystem that the “correct” solution can be found. The previous methods could not be enforced universally. Thus nearly all the material handling system suppliers have their own approach to find the right system, as it turned out at a market analysis of Fraunhofer IML. With the presented concept of finding a solution, a structured, fast method for system identification shall be presented. A stepwise approach to …

Evaluation Of Environmental Benefits Of Che Emerging Technologies By Using Lca, Nenad Zrnić, Andrija Vujičić

12th IMHRC Proceedings (Gardanne, France – 2012)

In the era of climate change combat transport industry is recognized as a sector with one of the largest environmental footprints. A part of transport industry is container shipping and handling division, which is currently growing with the fastest rate. This massive growth of container sector is due to containers pouring from Asia, mainly from China. Thus, container port operations are also experiencing significant increase in port emissions. This fact puts port authorities in position to find a way to reduce environmental impact of port operations and at the same time withhold increase in number containers being handled. In response …

Robust Design Of Public Storage Warehouses, Yeming Yale Gong, Rene De Koster

12th IMHRC Proceedings (Gardanne, France – 2012)

We apply robust optimization and revenue management in public storage warehouses. We optimize the expected revenue of public storage warehouses against the worst cases with a max-min revenue objective, and the decision variables are mainly the number of storage units for each storage type. With the robust design, we can observe worst-case revenue improvement.

Refurburshing And Recycling Facilities Design Methodology, Suzanne Marcotte, Benoit Montreuil

12th IMHRC Proceedings (Gardanne, France – 2012)

To design a facility, expected flows between the resources is one of the most important input. Flows are usually calculated given some statistics of previous periods or from the expected demand and the process required. However, in a refurbishing and recycling facility, flows are very fluctuating and not trivial to predict. The quantity produced by such facility not only depends on the demand but also on the supplies which are returned products under guaranty or discarded products after their end-of-use. The uncertainty and the variability on these supplies are often higher than the one on the demand which makes it …

Functional Design Of Physical Internet Facilities: A Road-Rail Hub, Eric Ballot, Benoit Montreuil, Collin Thivierge

12th IMHRC Proceedings (Gardanne, France – 2012)

As part of the 2010 IMHRC, Montreuil, Meller and Ballot enumerated the type of facilities that would be necessary to operate a Physical Internet (PI, π), which they termed, “π-nodes.” This paper is part of a three-paper series for the 2012 IMHRC where the authors provide functional designs of three PI facilities. This paper covers a PI road-rail hub. The purpose of a PI road-rail node is to enable the transfer of PI containers from their inbound to outbound destinations. Therefore, a road-rail π-hub provides a mechanism to transfer π-containers from a train to another one or a truck or …

Safe Control Of Manufacturing Vehicles Research Towards Standard Test Methods, Roger Bostelman, Will Shackleford, Geraldine Cheok, Kamel Saidi

12th IMHRC Proceedings (Gardanne, France – 2012)

The National Institute of Standards and Technology‟s Intelligent Systems Division has been researching several areas leading to safe control of manufacturing vehicles to improve automated guided vehicle (AGV) safety standards. The research areas include:  AGV safety and control based on advanced two-dimensional (2D) sensors that detect moving standard test pieces representing humans;  Ability of advanced 3D imaging sensors, when mounted to an AGV or forklift, to detect stationary or moving objects and test pieces on the ground or hanging over the work area; and  Manned forklift safety based on advanced 3D imaging sensors that detect visible and …