- Email: [email protected]
Model building for decision analysis
92
Book Reviews
mathematics per se, for those interested in applications this book is much worse than useless.
Nigel HOWARD The University of Aston Birmingham, United Kingdom
References [1] P.G. Bennett, Toward a theory of hypergames, Omega 5 (1977). [2] J.C. Harsanyi, Games with incomplete information played by 'Bayesian' players, Parts I, II and III, Management Sci. 14 (1967-68). [3] J.C. Harsanyi, Rational Behaviour and Bargaining Equilibrium in Games and Social Situations (Cambridge University Press, 1977). [4] N. Howard, Paradoxes of Rationality (MIT Press, Cantbridge, MA, 1971). [5] N. Howard, A dynamic theory of games, in: Colioque Sur La Theorie des Jeux, Cahiers Centre l~tudes Recherche Op~r. 18 (I-2) (1976). [6] R.D. Luce and H. Raiffa, Games and Decisions (Wiley, New York, 1957).
so-called O.R. people, not confronted with problems of due dates, credits, incomplete information .... confuse the basic issue of O.R. which is to give managers better solutions, if not optimal ones, to real problems, and not to transformed problems for the sake of using nice mathematical tools. There are in the O.R. literature unfortunately many examples of such distortions, which are mostly responsible for many failures and lack of interest from managers. The common feature of the chapters of the book is that real case studies are reported in all fields where O.R. has proved a useful tool (production, distribution, transportation, marketing, finance,...) by authors who have never forgotten that the objective was effective application of their findings by people on the ground. For this reason, the careful selection of some practically oriented papers out of the majority of papers, i.e. theoretical ones, available in the literature, was a goc,d idea indeed.
Elio 34. VENTURA CEPLAM Paris, France
R.H. COLLCUTT (Ed.)
Successful Operational Research: A Selection of Cases for Managers Operational Research Society, Birmingham, 1980, 312 pages, £ 3.00 The book is a selection of reprints of some 20 case studies picked out from O.R. journals (mainly the ,zxcellent Quarterly Journal of the British O.R. Society) in recent years, and assembled by the author, who wrote the first introductionary chapter, which was not published before. Roger Collcutt is an 'old boy' in the world of O.R. scientists. As he is a rather exceptional kind of fellow--managerial-minded as well as researchminded, with extensive experience in both fields-his testimony is worth a lot and should be thought over and over. Obviously, the key to successful operational research for managers lies in the ability of evolving "better decision rules or planning methods, rather than searching for the chimera of the theoretically best" and choosing "the technique to fit the problem, rather than to modify the questions to suit the technique". We fully endorse this statement. Many
Patrick RIVETT
Model Building for Decision Analysis Wiley, Chichester, 1980, xi + 172 pages, £ 15.00 The title of this book was very promising, so I approached the reviewing task with enthusiasm. I had read years ago the book entitled "Principles of Model Building" by the same author, published by John Wiley in 1972, and I expected that professor Rivett would continue developing the principles on which models should be built. In fact the book is concerned with the problems of applying operations research and statistical techniques rather than their derivations; moreover, if your purpose is to acquire basic knowledge about these techniques then the book is not recommended to you. It is addressed to readers aware of approaches to model building, decision makers and policy analysts. Little background on operations research and statistics is needed to appreciate the book, except the background required by Chapter 8 devoted to utility theory. The book consists of thirteen chapters that can be outlined as follows. Chapters 1, 2 and 3 discuss
Book Reviews
the background and stages of the scientific method and the whole process of modeling. The major part of the remainder of the book is devoted to an attempt to show the way in which various parts of the modeling process can be achieved by means of different standard approaches. Chapter 4 is devoted to the classification of models into the following basic st~'uctures: queuing, inventory and assignment problems, scheduling and routing, replacement and maintenance, and competition. Chapter 5 is devoted to accounting data; it begins by quoting the book of Ecclesiastes: "Wine makes merry, but money answers all things". Chapter 6 discusses investment choices. Chapter 7 poses several questions on sequenced decisions that the model builder must be able to answer. Chapters 8 to 12 discuss utility theory, competitive problems, short-term and long-term types of forecasting, simulation principles, and organizational objectives. Chapter 13 summarizes the ideas of professor River on model building. The book finishes with nine recommended 'understandings' on which the decision-making process should be based. I don't give regular academic lectures, hence my recommendations to students of operations research and statistics are not based on personal teaching experience. But I certainly do recommend this book (specially Chapters 1, 2, 3, 12 and 13) to those algorithm and model builders who have some tendency "to select problems which we feel capable of solving", and are "influenced by forms of modeling which are attractive to us, although we feel that these approaches are not always the most suitable for solving the proposed ploblem".
Laureano F. ESCUDERO IBM Scientific Center Madrid, Spain
M.A.H. DEMPSTER (Ed.) Stochastic Programming: Based on Proceedings of an International Conference Sponsored by the Institute of Mathematics and Its Applications, Mathematical Institute, Oxford, 15-17 July, 1974 Academic Press, London, 1980, xiii + 573 pages, £ 42.00 This is essentially the proceedings volume of the First International Conference on Stochastic Pro-
93
gramming which, based on the initiative of Mike Dempster and generously sponsored by the Institute of Mathematics and Its Applications, was held at Balliol College, Oxford, in July 1974. There are three major groups of papers, concerned with theoretical questions, computational problems and applications. Within these groups we find a great variety of subjects; e.g. problems of convexity in chance constrained programming, relations between various stochastic programming models, stochastic control problems, duality in stochastic programming in the theoretical section; computational aspects of the distribution problem, of the recourse problem and of the chance constrained problem in the computational section; and finally applications to water reservoir problems, to electrical energy planning, to inventory and portfolio problems. This collection of papers is preceded by an extensive introduction to stochastic programming, given by the editor, which is valuable not only for the "non-specialist, since it enables him to enter this field, but also to people familiar with one or the other area of stochastic programming, since it relates the contributions of this volume to each other as well as to a great deal of the surrounding literature. Seeing the announcement of proceedings of a conference held six years ago, the sceptical reader could expect the contents to be more or less obsolete. Astonishing enough, it turns out that this book in its essential parts is very actual. The reasons might be, that we find on the one hand results complete just at that time and meanwhile proved to be helpful and essential standard tools of the field, and on the other hand contributions to certain problems under rather particular assumptions, where--under more general assumpt i o n s - the same or very similar problems are still today under investigation, e.g. in stochastic control or in the computational area, and that the contents of this book are related also to results published after the conference by the editor's introduction. Therefore, this volume is worth to be noticed by specialists working in the field as well as by people interested to learn about problems and results in tiffs area.
Peter KA LL University of Ziirich Ziirich, Switzerland
Book Reviews
mathematics per se, for those interested in applications this book is much worse than useless.
Nigel HOWARD The University of Aston Birmingham, United Kingdom
References [1] P.G. Bennett, Toward a theory of hypergames, Omega 5 (1977). [2] J.C. Harsanyi, Games with incomplete information played by 'Bayesian' players, Parts I, II and III, Management Sci. 14 (1967-68). [3] J.C. Harsanyi, Rational Behaviour and Bargaining Equilibrium in Games and Social Situations (Cambridge University Press, 1977). [4] N. Howard, Paradoxes of Rationality (MIT Press, Cantbridge, MA, 1971). [5] N. Howard, A dynamic theory of games, in: Colioque Sur La Theorie des Jeux, Cahiers Centre l~tudes Recherche Op~r. 18 (I-2) (1976). [6] R.D. Luce and H. Raiffa, Games and Decisions (Wiley, New York, 1957).
so-called O.R. people, not confronted with problems of due dates, credits, incomplete information .... confuse the basic issue of O.R. which is to give managers better solutions, if not optimal ones, to real problems, and not to transformed problems for the sake of using nice mathematical tools. There are in the O.R. literature unfortunately many examples of such distortions, which are mostly responsible for many failures and lack of interest from managers. The common feature of the chapters of the book is that real case studies are reported in all fields where O.R. has proved a useful tool (production, distribution, transportation, marketing, finance,...) by authors who have never forgotten that the objective was effective application of their findings by people on the ground. For this reason, the careful selection of some practically oriented papers out of the majority of papers, i.e. theoretical ones, available in the literature, was a goc,d idea indeed.
Elio 34. VENTURA CEPLAM Paris, France
R.H. COLLCUTT (Ed.)
Successful Operational Research: A Selection of Cases for Managers Operational Research Society, Birmingham, 1980, 312 pages, £ 3.00 The book is a selection of reprints of some 20 case studies picked out from O.R. journals (mainly the ,zxcellent Quarterly Journal of the British O.R. Society) in recent years, and assembled by the author, who wrote the first introductionary chapter, which was not published before. Roger Collcutt is an 'old boy' in the world of O.R. scientists. As he is a rather exceptional kind of fellow--managerial-minded as well as researchminded, with extensive experience in both fields-his testimony is worth a lot and should be thought over and over. Obviously, the key to successful operational research for managers lies in the ability of evolving "better decision rules or planning methods, rather than searching for the chimera of the theoretically best" and choosing "the technique to fit the problem, rather than to modify the questions to suit the technique". We fully endorse this statement. Many
Patrick RIVETT
Model Building for Decision Analysis Wiley, Chichester, 1980, xi + 172 pages, £ 15.00 The title of this book was very promising, so I approached the reviewing task with enthusiasm. I had read years ago the book entitled "Principles of Model Building" by the same author, published by John Wiley in 1972, and I expected that professor Rivett would continue developing the principles on which models should be built. In fact the book is concerned with the problems of applying operations research and statistical techniques rather than their derivations; moreover, if your purpose is to acquire basic knowledge about these techniques then the book is not recommended to you. It is addressed to readers aware of approaches to model building, decision makers and policy analysts. Little background on operations research and statistics is needed to appreciate the book, except the background required by Chapter 8 devoted to utility theory. The book consists of thirteen chapters that can be outlined as follows. Chapters 1, 2 and 3 discuss
Book Reviews
the background and stages of the scientific method and the whole process of modeling. The major part of the remainder of the book is devoted to an attempt to show the way in which various parts of the modeling process can be achieved by means of different standard approaches. Chapter 4 is devoted to the classification of models into the following basic st~'uctures: queuing, inventory and assignment problems, scheduling and routing, replacement and maintenance, and competition. Chapter 5 is devoted to accounting data; it begins by quoting the book of Ecclesiastes: "Wine makes merry, but money answers all things". Chapter 6 discusses investment choices. Chapter 7 poses several questions on sequenced decisions that the model builder must be able to answer. Chapters 8 to 12 discuss utility theory, competitive problems, short-term and long-term types of forecasting, simulation principles, and organizational objectives. Chapter 13 summarizes the ideas of professor River on model building. The book finishes with nine recommended 'understandings' on which the decision-making process should be based. I don't give regular academic lectures, hence my recommendations to students of operations research and statistics are not based on personal teaching experience. But I certainly do recommend this book (specially Chapters 1, 2, 3, 12 and 13) to those algorithm and model builders who have some tendency "to select problems which we feel capable of solving", and are "influenced by forms of modeling which are attractive to us, although we feel that these approaches are not always the most suitable for solving the proposed ploblem".
Laureano F. ESCUDERO IBM Scientific Center Madrid, Spain
M.A.H. DEMPSTER (Ed.) Stochastic Programming: Based on Proceedings of an International Conference Sponsored by the Institute of Mathematics and Its Applications, Mathematical Institute, Oxford, 15-17 July, 1974 Academic Press, London, 1980, xiii + 573 pages, £ 42.00 This is essentially the proceedings volume of the First International Conference on Stochastic Pro-
93
gramming which, based on the initiative of Mike Dempster and generously sponsored by the Institute of Mathematics and Its Applications, was held at Balliol College, Oxford, in July 1974. There are three major groups of papers, concerned with theoretical questions, computational problems and applications. Within these groups we find a great variety of subjects; e.g. problems of convexity in chance constrained programming, relations between various stochastic programming models, stochastic control problems, duality in stochastic programming in the theoretical section; computational aspects of the distribution problem, of the recourse problem and of the chance constrained problem in the computational section; and finally applications to water reservoir problems, to electrical energy planning, to inventory and portfolio problems. This collection of papers is preceded by an extensive introduction to stochastic programming, given by the editor, which is valuable not only for the "non-specialist, since it enables him to enter this field, but also to people familiar with one or the other area of stochastic programming, since it relates the contributions of this volume to each other as well as to a great deal of the surrounding literature. Seeing the announcement of proceedings of a conference held six years ago, the sceptical reader could expect the contents to be more or less obsolete. Astonishing enough, it turns out that this book in its essential parts is very actual. The reasons might be, that we find on the one hand results complete just at that time and meanwhile proved to be helpful and essential standard tools of the field, and on the other hand contributions to certain problems under rather particular assumptions, where--under more general assumpt i o n s - the same or very similar problems are still today under investigation, e.g. in stochastic control or in the computational area, and that the contents of this book are related also to results published after the conference by the editor's introduction. Therefore, this volume is worth to be noticed by specialists working in the field as well as by people interested to learn about problems and results in tiffs area.
Peter KA LL University of Ziirich Ziirich, Switzerland