• Journal of Korean Society of Industrial and Systems Engineering
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• v.37 no.1
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• pp.165-171
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• 2014

We develop an optimization algorithm for a periodic review inventory system under a stochastic budget constraint. While most conventional studies on the periodic review inventory system consider a simple budget limit in terms of the inventory investment being less than a fixed budget, this study adopts more realistic assumption in that purchasing costs are paid at the time an order is arrived. Therefore, probability is employed to express the budget constraint. That is, the probability of total inventory investment to be less than budget must be greater than a certain value assuming that purchasing costs are paid at the time an order is arrived. We express the budget constraint in terms of the Lagrange multiplier and suggest a numerical method to obtain optional values of the cycle time and the safety factor to the system. We also perform the sensitivity analysis in order to investigate the dependence of important quantities on the budget constraint. We find that, as the amount of budget increases, the cycle time and the average inventory level increase, whereas the Lagrange multiplier decreases. In addition, as budget increases, the safety factor increases and reaches to a certain level. In particular, we derive the condition for the maximum safety factor.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.38 no.2
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• pp.145-151
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• 2015

As order quantity is increased, the ordering cost per item will be cheaper due to saving of transportation and material handling costs. In this paper, two realistic assumptions such as quantity discount and budget limit are considered. Quantity discount means that all units in the order will be discounted according to the predetermined order levels. Budget limit represents that the costs for inventory investments are bounded. This paper develops a Lagrangian relaxation approach for a continuous review inventory model with a budget constraint and quantity discounts. Computational results indicate that the proposed approach provides a good solution. Sensitivity analysis is done to get some insights on budget limit and quantity discount. As budget limit or the amount of discount according to order quantity is increased, order quantity is increased, whereas reorder point is not always increased.

• IE interfaces
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• v.14 no.3
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• pp.286-295
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• 2001

This paper addresses the problem of determining the proper level of concurrent spare parts(CSP) for a system consisting of multi-item parts under an available budget constraint. Initial provisioning of spare parts plays a major role in the acquisition of a new equipment system. Therefore, the proper level of spare parts should be on hand to maintain the availability of the system. This paper proposes a new CSP model and solution procedure that determines the proper level of spare parts satisfying the item priority and simultaneously available budget constraint.

• Journal of Korea Water Resources Association
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• v.36 no.1
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• pp.61-74
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• 2003

This study(II) apply to the A city by using the optimal rehabilitation model based on the deterioration prediction of the water distribution system proposed the study(I). The deterioration prediction model divides factors into 14 factors with digging and experiment and 9 factor without digging and experiment and calculate the deterioration degree. The application results of the deterioration prediction model show that a difference of the deterioration degree according to factor numbers is within 1~2%. Also, the model can predict the deterioration degree of each pipe without digging and experiment. The optimal rehabilitation model is divided into the optimal residual durability of each deterioration factor and budget constraint or not. The application result is as follow: the rehabilitation time and cost increase according to the increasing of the optimal residual durability. When compared the model with budget constraint and model without budget constraint, the former model increase the cost of total contents. In case of budget constraint, the increasing tendency is concluded that the pipe rehabilitation is executed in same budget every year in condition that every rehabilitation cost do not exceed the every year budget within the optimal residual durability.

• Journal of the Korean Operations Research and Management Science Society
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• v.35 no.1
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• pp.111-124
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• 2010

In the last decade, traveling purchaser problem (TPP) has received some attention of the researchers in the operational research area. TPP is a generalization of the well-known traveling salesman problem (TSP), which has many real-world applications such as purchasing the required raw materials for the manufacturing factories and the scheduling of a set of jobs over some machines, and many others. In this paper we suggest heterogeneous multiple traveling purchaser problem with budget constraint (HMTPP-B) which looks for several cycles starting at and ending to the depot and visiting a subset at a minimum traveling cost and such that the demand for each product is satisfied and the cost spent for purchasing the products does not exceed a given budget threshold. All the past studies of TPP are restricted on a single purchaser. Therefore we randomly generated some instances. CPLEX is used for getting optimal solutions in these experiments.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.31 no.4
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• pp.134-139
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• 2008

Most approaches for continuous review inventory problem need tables for loss function and cumulative standard normal distribution. Furthermore, it is time-consuming to calculate order quantity (Q) and reorder point (r) iteratively until required values are converged. The purpose of this paper is to develop a direct method to get the solution without any tables. We used approximation approaches for loss function and cumulative standard normal distribution. The proposed method can get the solution directly without any iterative procedure for Q, r and without any tables. The performance of the proposed approach is tested by using numerical examples. The budget constraint of this paper assumes that purchasing costs are paid at the time an order is arrived. This constraint can be easily replaced by capacity constraint or budget constraint in which' purchasing costs are paid at the time an order is placed.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.37 no.1
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• pp.50-59
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• 2014

In this paper, we develop an efficient approach to solve a multiple-item budget-constraint newsboy problem with a reservation policy. A conventional approach for solving such problem utilizes an approximation for the evaluation of an inverse of a Gaussian cumulative density function when the argument of the function is small, and a heuristic method for finding an optimal Lagrangian multiplier. In contrast to the conventional approach, this paper proposes more accurate method of evaluating the function by using the normalization and an effective numerical integration method. We also propose an efficient way to find an optimal Lagrangian multiplier by proving that the equation for the budget-constraint is in fact a monotonically increasing function in the Lagrangian multiplier. Numerical examples are tested to show the performance of the proposed approach with emphases on the behaviors of the inverse of a Gaussian cumulative density function and the Lagrangian multiplier. By using sensitivity analysis of different budget constraints, we show that the reservation policy indeed provides greater expected profit than the classical model of not having the reservation policy.

• Asia Marketing Journal
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• v.22 no.1
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• pp.41-60
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• 2020

The goal of the study is to understand the role of social norm in purchase decisions where demand is revealed in the form of multiple-discreteness. Consumers are socially engaged in various activities through the expectation from others in their community. Actions or decisions are likely to reflect this influence. This implicit or explicit social norm is revealed as the rules, regulations, and standards that are understood, shared, endorsed, and expected by group members. When consumers' decisions are in distance from the norm, they come to face discomfort such as shame, guilt, embarrassment, and anxiety. These pressure act as a constraint as opposed to utility in their decision making. In this study, the effect of social norms on consumer demand is captured via multiple constraint model where constraints are not only from budget equation but also from psychological burden induced by the deviation from the norm. The posterior distributions of model parameters were estimated via conjoint study allowing for heterogeneity via hierarchical Bayesian framework. Individual characteristics such as age, gender and work experience are also used as covariates for capturing the observed heterogeneity. The empirical results show the role of social norm as constraint in consumers' utility maximization. The proposed model accounting for social constraint outperforms the standard budget constraint-only model in terms of model fit. It is found that people with longer job experience tend to be more robust and resistant to the deviation from the norm. Incorporating social norm into the utility model allows for another means to disentangle the reason for no-purchase as 'not preferred' and 'not able to buy'.

• Journal of Korean Society of Transportation
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• v.24 no.3 s.89
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• pp.7-15
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• 2006

A large sample can Provide more information about the Population. As the sample size Increases, analysts will be more confident about the survey results. On the other hand, the costs for survey will increase in time and manpower. Therefore, determination of the sample size is a trade-off between the required accuracy and the cost. In addition, permitted error and significance level should be considered. Sample size determination in surveys for O/D estimation is also connected with confidence of survey result. However, the past methods were usually too simple to consider confidence. Therefore, a new method for O/D surveys was Proposed and it was accurate enough, but it has too large sample size when we have current budget constraint. In this research, several minimum sample size determination methods for origin-destination survey under budget constraint were proposed. Each method decreased sample size, but has its own advantages. Selection of the sample size will depend on the study Purpose and budget constraint.

• Journal of the military operations research society of Korea
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• v.6 no.1
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• pp.93-101
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• 1980

An effectively designed budget system in the poor resources environment necessarily has three design criteria : (i) to be both planning-oriented and control-oriented, (ii) to be both rationalistic and realistic, (iii) to be sensitive to the variations of resources environment. PPB system is an extreme (planning-oriented and rationalistic) and conventional OEB/OUB system is the other extreme (control-oriented and incrementalistic). Generally, the merits of rationalism are limited because of the infeasibility of applications. Hence, mixtures of the two extremes such as MBO, ZBB, and RZBB have been examined and applied during the last decade. The classical mathematical models of capital budgeting are the starting points of the development of the Budget-Mix Model introduced in this paper. They are modified by the followings: (i) technological-resource constraints, (ii) bounded-variable constraint, (iii) the exchange rules. Special emphasis is laid on the above (iii), because we need more efficient interresource exchanges in the budget-mix process. The Budget-Mix Model is not based on optimization, but a heuristic approach which assures a satisficing solution. And the application fields of this model range between the incremental Nonzero-Base Budgeting and the rational Zero-Base Budgeting. In this thesis, the author suggests 'the budget- mix concept' and a budget-mix model. Budget-mix is a decision process of making program-mix and resource-mix together. For keeping this concept in the existing organization realistic, we need the development of quantitative models describing budget-mix situations.