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Strategic investment decisions
Book Reviews
niteness of the Hessian matrix are discussed. The fourth paper Global optimization for molecular conformation problems presents a primal-relaxed dual global optimization algorithm with an extensive review for finding the global minimum energy configurations of microclusters composed by particles interacting with any type of two-body central forces. The fifth paper A MINLP retrofit
approach for improving the flexibility of heat exchanger networks describes the resulting multiperiod hyperstructure of the problem and its solution with the application of the Generalized Benders Decomposition. The sixth paper Sym-
bolic integration of logic in MILP branch and bound methods for the synthesis of process networks proposes an approach for the symbolic integration of logic relations in mixed integer linear programming model. The seventh paper
Optimal periodic scheduling of multipurpose batch plants proposes a mixed integer linear programming model and an appropriate branch and bound algorithm for the scheduling of multipurpose batch plants in cyclic mode. The eight and ninth paper Feature extraction algorithms for con-
strained global optimization I (Mathematical foundation) & H (Batch process scheduling application) present a feature extraction algorithm. The algorithm described in Part I, uses a partition and search strategy in which the problem domain is successively partitioned and a statistical approximation approach is used to characterize the objective function values and the constraint feasibility over a partition. Part II describes an application of the feature extraction algorithm. All the papers are authored and coauthored by experts in the field, guaranteeing a collection of papers with a quality standard. The brief description of each of the papers however indicates that this volume is not a very coherent work. This volume is certainly very interesting for people specializing in one of the topics described, but practitioners will take little benefit from it.
Frank Van Puyvelde
Chemical Engineering Department K.U. Leuven Heverlee Belgium
143
R. Butler, L. Davies, R. Pike and J. Sharp Strategic investment decisions Routledge, New York, 1993, xiii +231 pages, ISBN 0-415-07507-6HB Investment decision making can be studied from two different points of view. Most often it is considered to be a formal, rational process. Sometimes however it is looked upon as an organizational behavioural process. These two approaches, computational and inspirational, are often viewed as opposite ends. Consequently most books on the subject focus on one of the two approaches. The computational one is the most wide spread in use. Perfect information however, is never available. Therefore some amount of inspiration will be needed in every strategic decision. This book tries to combine the two approaches. It describes and explains the process of strategic decision making but foremost provides means to measure and improve the effectiveness of the resulting decision. The book starts out with an overview of different models of organizational decision-making. Next a decision effectiveness model is outlined. This model provides a tool for appreciating decision-making processes in organizations. The authors use the results of a survey of 17 strategic investment decisions to derive two principal factors of effectiveness: attainment of the objective and possibility of learning. Explanatory variables of the model are grouped in following categories: definition, strategies, influence and timing. Regression analyses were used in order to model the relation(s) between these explanatory variables and the two principal factors. Four in-depth case studies provide further examples of the application of the model and describe ways in which to improve the effectiveness of the decision making. Generalized conclusions are drawn based on these cases. Readers not interested in specific examples can skip these chapters. Before reading this book, I was aware that there is more to strategic investment decision making than 1 had found in books and courses on the subject. Most of the publications I came across focused on the computational part of the decision-making because that part is relatively easy to describe. Nevertheless analytical-quantitative approaches need to be balanced against intuitivequalitative approaches: analysis vs. action. The
144
Book Reu~ws
merit of the authors of this book is that they not only give a complete picture of the process of strategic decision-making, but also provide means to measure and improve the effectiveness of this process. This model is what makes this book a new and useful contribution to the field of investment decision making. People involved in decision making who want to know more about the effectiveness of decisions or are interested in
organizational learning should find this book useful.
Dirk H e e r e m a n s K. U. Leuven Afdeling Industrieel Beleid 3001 Heverlee-Leuuen Belgium
niteness of the Hessian matrix are discussed. The fourth paper Global optimization for molecular conformation problems presents a primal-relaxed dual global optimization algorithm with an extensive review for finding the global minimum energy configurations of microclusters composed by particles interacting with any type of two-body central forces. The fifth paper A MINLP retrofit
approach for improving the flexibility of heat exchanger networks describes the resulting multiperiod hyperstructure of the problem and its solution with the application of the Generalized Benders Decomposition. The sixth paper Sym-
bolic integration of logic in MILP branch and bound methods for the synthesis of process networks proposes an approach for the symbolic integration of logic relations in mixed integer linear programming model. The seventh paper
Optimal periodic scheduling of multipurpose batch plants proposes a mixed integer linear programming model and an appropriate branch and bound algorithm for the scheduling of multipurpose batch plants in cyclic mode. The eight and ninth paper Feature extraction algorithms for con-
strained global optimization I (Mathematical foundation) & H (Batch process scheduling application) present a feature extraction algorithm. The algorithm described in Part I, uses a partition and search strategy in which the problem domain is successively partitioned and a statistical approximation approach is used to characterize the objective function values and the constraint feasibility over a partition. Part II describes an application of the feature extraction algorithm. All the papers are authored and coauthored by experts in the field, guaranteeing a collection of papers with a quality standard. The brief description of each of the papers however indicates that this volume is not a very coherent work. This volume is certainly very interesting for people specializing in one of the topics described, but practitioners will take little benefit from it.
Frank Van Puyvelde
Chemical Engineering Department K.U. Leuven Heverlee Belgium
143
R. Butler, L. Davies, R. Pike and J. Sharp Strategic investment decisions Routledge, New York, 1993, xiii +231 pages, ISBN 0-415-07507-6HB Investment decision making can be studied from two different points of view. Most often it is considered to be a formal, rational process. Sometimes however it is looked upon as an organizational behavioural process. These two approaches, computational and inspirational, are often viewed as opposite ends. Consequently most books on the subject focus on one of the two approaches. The computational one is the most wide spread in use. Perfect information however, is never available. Therefore some amount of inspiration will be needed in every strategic decision. This book tries to combine the two approaches. It describes and explains the process of strategic decision making but foremost provides means to measure and improve the effectiveness of the resulting decision. The book starts out with an overview of different models of organizational decision-making. Next a decision effectiveness model is outlined. This model provides a tool for appreciating decision-making processes in organizations. The authors use the results of a survey of 17 strategic investment decisions to derive two principal factors of effectiveness: attainment of the objective and possibility of learning. Explanatory variables of the model are grouped in following categories: definition, strategies, influence and timing. Regression analyses were used in order to model the relation(s) between these explanatory variables and the two principal factors. Four in-depth case studies provide further examples of the application of the model and describe ways in which to improve the effectiveness of the decision making. Generalized conclusions are drawn based on these cases. Readers not interested in specific examples can skip these chapters. Before reading this book, I was aware that there is more to strategic investment decision making than 1 had found in books and courses on the subject. Most of the publications I came across focused on the computational part of the decision-making because that part is relatively easy to describe. Nevertheless analytical-quantitative approaches need to be balanced against intuitivequalitative approaches: analysis vs. action. The
144
Book Reu~ws
merit of the authors of this book is that they not only give a complete picture of the process of strategic decision-making, but also provide means to measure and improve the effectiveness of this process. This model is what makes this book a new and useful contribution to the field of investment decision making. People involved in decision making who want to know more about the effectiveness of decisions or are interested in
organizational learning should find this book useful.
Dirk H e e r e m a n s K. U. Leuven Afdeling Industrieel Beleid 3001 Heverlee-Leuuen Belgium