Table of Content

12 October 2015, Volume 24 Issue 5

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Theory Analysis and Methodology Study

Smallest-order-first Mechanism in Supply Chain Operations

CHEN Ye-fen, ZHAO Xiao-bo

2015, 24(5):  1-10.  DOI: 10.12005/orms.2015.0152

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Through theoretical analyses and laboratory experiments, in the capacity allocation games with both complete information and incomplete information, this paper investigates the impact of smallest-order-first mechanism on retailers’ ordering decisions in the situation of supply shortage. Theoretical results show that the order decision in the smallest-order-first mechanism does not exceed the market demand and does not change with the operational costs. Experimental data show that, in the complete information capacity allocation games, subjects’ orders are larger than the predictions of standard theory, operational costs influence subject’s ordering behavior, and experience effect exists in subjects’ repeated games; in the incomplete information capacity allocation games, there is no significant difference between subjects’ decisions and standard theory. These studies provide both theoretical and empirical supports to the applications of smallest-order-first allocation rule in the practice.

Study on the Influence of Service Relationship on the Supply Chain
Information Sharing and Trust Decision

XU Gang, QIN Jin

2015, 24(5):  11-17.  DOI: 10.12005/orms.2015.0153

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Based on asymmetric information between supplier and manufacturer, information sharing and trust decision are the key to supplying chain coordination. To ensure adequate supply, the manufacturer shares private demand information with the supplier, but does so with a cheating motivation. In view of the manufacturer's information sharing, the supplier determines capacity investment and makes trust decision. Our study shows that low deceive cost will cause the untruthful manufacturer information sharing. On the establishment of the service value model, we analyze how the service relationship affects information sharing and trust decision. The results show that if service value is high enough, the value of services will enable manufacturers to share information truly, and the supplier can fully trust the manufacturer information sharing. If the service value is, the manufacturer will have an incentive to inflate private information in a costless communication. So the supplier should doubt manufacturers’ information sharing.

A 3PL Supplier Selection of E-commerce Model Based on
Intuitionistic Fuzzy Sets

ZHOU Zhen, ZHANG Qiang, PENG Yan, RONG Yi-hong, WANG Jie

2015, 24(5):  18-23.  DOI: 10.12005/orms.2015.0154

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We analyse the characteristic of third-party logistics supplier of e-commerce, and propose an indicator system of 3PL supplier of e-commerce. Due to the uncertainty,incomplete information and language descriptive index assessment, we introduce intuitionistic fuzzy sets to describe the membership, nonmembership, and unknown part of the corresponding indicator and provide the equilibrium centralized quantification values and dispersion of intuitionistic fuzzy sets. We also establish a comprehensive evaluation model for 3PL suppliers of e-commerce based on synthesis effect function of intuitionistic fuzzy sets. We also provide a real-world case analysis to illustrate the effect of the proposed model. Moreover, we compare the difference of 3ePLs based on fuzzy sets and intuitionistic fuzzy sets.

Research on Inter-organization Resource-constrained Project
Integrated Scheduling in Supply Chain

WANG Wei-xin, GE Xian-long, WANG Xu, NI Lin

2015, 24(5):  24-33.  DOI: 10.12005/orms.2015.0155

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The problem of inter-organization resource-constrained project scheduling in supply chain is proposed .the affect of duration、cost and resource leveling in project scheduling are considered from the standpoint of maximizing the overall utility. Then the model of the inter-organization resource-constrained scheduling problem in supply chain is constructed and analyged. Randomness and stability of droplets in Normal cloud model is adopted to improve the setting mode of crossover and mutation operator in Genetic algorithm, and numerical simulation is carried out. The results show that it not only reaches the objective of maximizing the overall utility for inter-organization resource-constrained scheduling in supply chain, but also the objective of shortening the duration、lowering the cost and improving resource-utilization efficiency when taking the duration-cost-resource leveling as optimize target.

Supply Chain Coordination for Fresh Produce under Controllable Logistics
Time and Random Deterioration Loss

SU Ju-ning, LIU Chen-guang, YIN Yong, ZHANG Na

2015, 24(5):  34-43.  DOI: 10.12005/orms.2015.0156

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The fresh produce is not only perishable, but its lifetime is random also. So there are two challenges for the supply chain of fresh produce in the process of the fresh produce ordering and shipping from origin to remote market: matching stochastic supply with stochastic demand, balancing deterioration loss and logistics cost. Based on the controllable logistics time under the condition of modern logistics, the decision models of the decentralized system and the centralized system are established respectively. And the optimal ordering quantity and the optimal logistics time in two systems are obtained. On this basis, the combined contracts are proposed. The value range of contract parameter that can realize the coordination of supply chain is derived. The results show that the combined contracts can perfectly coordinate the supply chain, and can achieve the Pareto optimal of supplier and retailer through choosing reasonable contract parameter. Furthermore, the sensitivity analysis of the deterioration rate factor and demand price elasticity coefficient are performed. Several managerial insights are also deduced from the analytical results.

Coordination of Fresh Agricultural Supply Chain Considering Retailer’s
Freshness-keeping and Consumer Utility

WANG Lei, DAN Bin

2015, 24(5):  44-51.  DOI: 10.12005/orms.2015.0157

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According to the fact that the retailer’s freshness-keeping effort is limited while the consumer requires more freshness of the agricultural product, from the perspective of enhancing the consumer utility, a time-varying consumer utility function influenced by the freshness and price of the agricultures product is developed. A profit model for a two-stage fresh agricultural product supply chain consists of a retailer and a supplier is built. By employing Stackelberg game, the supplier’s optimal preservation efforts and the retailer’s optimal pricing are analyzed under decentralized setting and compared with centralized setting. Because the the retailer’s preservation effort is lower in the decentralized setting, a “preservation cost & revenue sharing” contract is designed to ensure fresh agricultural product supply chain coordination and a “win-win” situation between supply chain members. Then the interval range of contract is determined to both coordinate the fresh agricultural product supplychain and enhance consumer utility. Finally, the numerical examples show that the contract is effective.

Closed-loop Supply Chain Coordination Under Selling Market
and Recycling Market Disruptions

QIN Yan-hua

2015, 24(5):  52-56.  DOI: 10.12005/orms.2015.0158

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A closed loop supply chain consisting of a single manufacturer and a single retailer is considered, the manufacturer is responsible for manufacturing and remanufacturing, the retailer is responsible for product sales and collection of waste products, the corresponding game model is established, and the coordination with revenue sharing contract is analyzed firstly. Then, the coordination with revenue sharing contract under emergency is studied. The results point out that the coordination of closed loop supply chain would be broken when the sale market size and the initial collection market size of waste products change simultaneity under emergency, so the revenue sharing contract is adjusted, the closed-loop supply chain has anti-emergency when the revenue sharing contract is adjusted. Finally, a numerical calculation example is given to verify the conclusion.

Research on the Gaming of the Players’ Action Sets Changing:
A Case Study of the Rare Earth Trade

XU Yin-feng, WEN Sheng-wei

2015, 24(5):  57-65.  DOI: 10.12005/orms.2015.0159

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Considering the export of rare earth as background, this paper analyzes the gaming model in which the players’ action sets are changing over time. First, we define three changing styles for action set: action set heightening, action set shrinking, and action set changing indeterminacy. Then we investigate the track of the equilibrium solution in which only one player’s action set will change over time. The results show that the tracks of the equilibrium solution when the action set heightening and shrinking are opposite, and the stationary strategy is strictly superior to conservative strategy and risky strategy which are equivalent in this situation. Moreover, this single action set changing model is applied to both two action sets changing over time and the results still hold trne for the new model. Finally, the rationality and feasibility of the gaming model and solution are validated by a case study of the rare earth export of China and Malaysia from June 2012 to March 2013.

R&D Project Investment Decision Game Analysis Under A Variety of Risks

CAO Bo-yang, JIANG Ming-hui

2015, 24(5):  66-74.  DOI: 10.12005/orms.2015.0160

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R&D projects represent the core competitiveness of the high-tech enterprises, and there are a variety of risks in investment and research process. In order to keep competitive advantages and maximize the benefits, it needs to be very accurate in valuation of the projects for the optimal investment decisions in the competition before investment. By utilizing the European option value and game theory, quantified technical risk, economic risk and sudden risks, and combined with the jump-diffusion process and information revelation process, after analyzing investment decisions of enterprises themselves and competitors in the market, this paper establishes the corresponding R&D projects investment decision payoff mathematics model which can assess the timing and payoffs of the investment for two enterprises and obtain the optimal investment decisions after Nash equilibrium.

Fuzzy Multi-attribute Decision Making Method Based on Maximizing
Deviation and Cross-Evaluation

GUO Qing-e, SU Bing

2015, 24(5):  75-81.  DOI: 10.12005/orms.2015.0161

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Considering the multi-attribute decision making problem with both quantitative data and non quantitative index, in which the information about attribute weights are unknown completely, a method based on maximizing deviation and cross-evaluation is introduced. First we calculate the “average cross-efficiency evaluation”, “minimum cross-efficiency evaluation”, “maximum cross-efficiency evaluation” using the cross-evaluation model; then use the fuzzy comprehensive evaluation model to deal with the non quantitative index; finally we evaluate the quantitative data and non quantitative index together. The weight of every decision unit is determined by the maximizing deviation method. And an example is given to illustrate the effectiveness of the method proposed.

Analysis of Evolutionary Game on Knowledge-Sharing
Behavior in IT Outsourcing

LIU Xu-feng, AI Shi-zhong

2015, 24(5):  82-90.  DOI: 10.12005/orms.2015.0162

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IT outsourcing is a knowledge-intensive business activity that requires effective knowledge sharing. However, there are some obstacles in knowledge sharing between the client and the service provider in IT outsourcing. On the basis of the existing research about knowledge sharing in IT outsourcing, we present the factors that influence knowledge-sharing behavior, and establish an evolutionary game model of knowledge-sharing behavior in IT outsourcing. We analyze the model in four situations to discuss evolutionary stable strategies by solving replicator dynamics equation and Jacobian matrix. Then we address the effects of the factors on evolutionary stable strategies, and identify some key factors by simulation with the use of Matlab(Version 7.6). The findings of this study show that, knowledge-sharing behavior in IT outsourcing is influenced by some key factors, including the amount of knowledge that can be shared, the degree of the complementarity of knowledge, trust between the client and the provider, the capacity of knowledge absorption and transformation, the cost and risk of knowledge sharing, and the incentive mechanism on knowledge sharing. Finally, some managerial implications are provided for IT outsourcing industry.

Multi-attribute Decision-making Method Based on Dual
Hesitant Fuzzy Linguistic Variables

YANG Shang-hong, JU Yan-bing

2015, 24(5):  91-96.  DOI: 10.12005/orms.2015.0163

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In this paper, the dual hesitant fuzzy linguistic variable is defined at first, then some basic definitions such as operational laws, score function, accuracy function, comparison rules are proposed. Next, dual hesitant fuzzy linguistic weighted arithmetic averaging operator, dual hesitant fuzzy linguistic ordered weighted arithmetic averaging operator and dual hesitant fuzzy linguistic hybrid averaging operator are presented, and some properties are discussed. For fuzzy multi-attribute decision making problems in which the attribute values take the form of dual hesitant fuzzy linguistic variables, a method based on dual hesitant fuzzy linguistic aggregation operators is proposed. Finally, a practical partner selection problem of the State Grid Corporation of China is given to verify the effectiveness and feasibility of the developed method.

Two-warehouse Decision Model for Single Product with Selling Rate
Linearly Depends on Inventory Level

XU Chun-ming, ZHAO Dao-zhi

2015, 24(5):  97-103.  DOI: 10.12005/orms.2015.0164

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In the product mature period, a two-warehouse inventory problem is investigated for single product with stock-dependent selling rate, which is linearly dependent on current stock level. Shortages are not allowed. The decision model with the goal of maximizing the total average profit is developed, the existence and uniqueness of optimal replenishment policy are showed, and then a simply solution procedure for optimal strategy is given. The number results are listed: when rented warehouse policy is used, inventory managers not only fully consider their own inventory capacity, but also consider some related own warehouse inventory parameters’ margin contribution ratio.

Analysis of Outsourcing and Pricing Decisions Under Supply Disruption

HE Bo, ZHANG Xia

2015, 24(5):  104-110.  DOI: 10.12005/orms.2015.0165

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Supply disruptions often appear in supply chain. Using appropriate outsourcing strategy can help firms to mitigate supply disruption risks effectively. In this paper, we study a supply chain with vertical competition between upstream suppliers and downstream manufacturers and horizontal competition between downstream manufacturers under supply disruption. The suppliers make wholesale price first, and then two manufacturers implement different outsourcing strategies to manage supply disruption risks and compete with each other. One manufacturer implements contingency dual sourcing strategy while the other uses sole sourcing strategy. We propose a multi-stage game model to solve this problem. We analyze two behaviors-Collusion and Cournot between manufacturers. The optimal pricing decision of supplier and optimal ordering decisions of manufacturers are derived. The effects of two behaviors-Collusion and Cournot between manufacturers on supplier and manufacturer are investigated. Through numerical computation, the impact of cost and reliability on optimal ordering and expected profits of two manufacturers are analyzed.

Ranking Model Based on the Virtual Decision-making Unit

WANG Yun-lin, HAN Wei-yi, GE Hong

2015, 24(5):  111-115.  DOI: 10.12005/orms.2015.0166

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In the paper, a ranking method is presented for decision-making units. Based on the classical C²R model, a new ranking model is obtained by introducing a virtual decision-making. According to the value of relative efficiency, all decision-making units can be ranked. Experiments show that the ranking method can reflect the computational result of C²R model better. Moreover,it can’t make the value of relative efficiency too large like the super-efficiency method. Not only does the method provide a sufficient basis, but it is very simple. It is deserved to note that it has embodied the systemic efficiency.

How Does TFP Affect Chinese Manufacturing Firms’Regional
Location Decisions？

LU Yu-duo, DAI Mei-hong, LIU Hai-yang

2015, 24(5):  116-125.  DOI: 10.12005/orms.2015.0167

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New Economic Geography and New New Economic Geography which is developed recently indicate that firms with higher tfp will select more larger markets through agglomeration effect and selection effect.This paper studies the problem of Chinese firms’regional location based on the latter theory framework. Using more than one million firms’records of Chinese 297 prefecture-level and above cities during 1999~2007 and propensity score matching method to solve the problem of selectivity bias,the results indicate that:comparing to firms with lower tfp,firms with more higher tfp select more larger cities.What’s more,this location decision is different in different regions and firm’s ownership:comparing to traditional central and western regions,the trend of higher tfp firms selecting larger cities is more obvious in eastern region. Comparing to collective firms, this trend of HMT(Hong Kong, Macao and Taiwan)firms,foreign and private firms is more illustrious, and results show that state-owned firms’regional location decision is not affected by tfp.The results above provide a new solution for the policy-making of Chinese manufacturing regional location.

The Study of Cooperation Mechanism between Government and
Enterprises in Emergency Supplies Reserve

AI Yun-fei, LV Jing, WANG Jun, ZHANG Li-li

2015, 24(5):  126-131.  DOI: 10.12005/orms.2015.0168

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For some kind of emergency supplies, the joint of government and enterprises can reduce the cost of government, and the enterprises can also benefit from it. This paper studies the mechanism of cooperation between government and enterprises in emergency supplies reserve. First it analyses the game between the alliance participants; then it uses the shapley value to solve the revenue distribution problem in the alliance; finally it analyses the stability of the alliance. The example analysis shows that the relationship between the government and enterprises in the alliance is similar to the relationship between “landlords” and “peasants”; the enterprises are reluctant to join the alliance when the earnings they gain are less than their opportunity cost, the government needs to cross-subsidize enterprises to maintain the stability of the alliance. When the shortage cost is less than the cost of government reserve, the government will choose shortage or join with the enterprises. When the shortage cost is less than the cost of enterprise reserve, the government will choose shortage.

Modularity of Emergency Plan Response Procedures

DENG Jie, QI Ming-liang, CHI Hong, SHI Biao

2015, 24(5):  132-143.  DOI: 10.12005/orms.2015.0169

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As the important base of emergency response, emergency response procedure becomes more visual and digital, which is expressed by a network with emergency actions and their logical relations. The emergency response procedure modularization extracts the sub-network from multiple emergency response procedures as response module, which has a stable logical relation among actions and also can be found in multiple emergency response procedures. Launching module according the emergency demand to form a new emergency procedure can enhance the establishing efficiency. For this purpose, this article defines the compactness among actions and the representativeness of modules, and it builds a mathematical model with the sum of compactness and representativeness maximization within module as its objectives. The model also has a constraint that one action only exists in one module. To solve the emergency response procedures modularity problem, a heuristic algorithm based on the ant colony algorithm is designed. At last, this article takes the modulation of an airline company’s emergency response procedure as an example, and the results show that this method works efficiently.

Doubly Nonnegative Relaxation for Densest k-subgraph Problem

GUO Chuan-hao, SHAN Er-fang

2015, 24(5):  144-150.  DOI: 10.12005/orms.2015.0170

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Densest k-subgraph problem is a classical problem of combinatorial optimization, which is nonconvex and NP-hard in general. In this paper, we propose a new convex relaxation method, i.e., doubly non-negative relaxation method, for solving this problem, and establish the corresponding doubly nonnegative relaxation model for the problem. Moreover, we prove that the doubly nonnegative relaxation model is equivalent to a new semidefinite relaxation model under some conditions. Finally, some random examples are tested by these relaxation models. The numerical results show that the doubly non-negative relaxation is more promising than the corresponding semidefinite relaxation.


Measure and Conquer Approach for the Minimum Vertex Cover Problem

CHEN Ji-zhen,NING Ai-bing,ZHI Zhi-bing,WANG Yong-fei,ZHANG Hui-zhen

2015, 24(5):  151-155.  DOI: 10.12005/orms.2015.0171

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Minimum vertex cover set problem is a well-known NP-Hard problem in the area of combinatorial optimization and has important applications in many fields. The analytical technology of Measure and Conquer is widely used to analyze the worst-case running time of exact algorithms based on branch and reduce. The main idea of Measure and Conquer is focused on choosing a refined non-standard measure to measure the size of the problem and its sub-problems at the each branching phase. In this work, we first use the technology of Branch and Reduce to design an exact algorithm for the minimum vertex cover problem, then use two kinds of methods to analyze the worst-case time complexity of the algorithm. We improve the worst-case time complexity of the same algorithm from O(1.325n) to O(1.255n) by employing the method of Measure and Conquer. The results of this work indicate that Measure and Conquer approach can significantly speed up exact algorithms and has wide applications in the analysis of exact algorithms.

Network Empirical Study of the Project Portfolio

ZHANG Chun-sheng, YAN Guang-le

2015, 24(5):  156-166.  DOI: 10.12005/orms.2015.0172

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The paper introduced complex network theories into project portfolio management, take projects as nodes, the relationships among the projects as edges, and the cost as node weight, the tightness of the projects as edge weight, The poject portfolio is then generalized as a weighted complex network. The papers studied project portfolio network of four enterprises, and sumerized the behavior characteristics on the basis of analysing the project portfolio. Through comparative analysis, the paper discovered these similarity characteristics: ①Degree distribution of the node differs from that of other society networks, it tends to be power-law, while also seems to follow skewed poisson distribution; ②Relative coefficient of the degree is negetive, which also differs from other society networks; Project portfolio enjoys cluster structure; ④Accumulation coefficient is large; ⑤Network diameter is small; ⑥the average degree is less than four.

Robustness Measure for the Resource-constrained Project Scheduling
Problem based on Activity Delay Risk Weighted Slack

HE Li-hua, KONG Yun-xiao

2015, 24(5):  167-174.  DOI: 10.12005/orms.2015.0173

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During the research on the robustness of project scheduling, each activity of the project has different weight of delay risk because of its different nature when it appears delay risk. The higher the weight is, the more likely the activity will affect the makespan of the project. In view of the resource-constrained project scheduling problem, a new robustness measure index based on activity delay risk weighted slack is put forward. When uncertain factors appear, this index not only considers influences of the weight of delay risk, but also takes the number of preceding activities into account to realize the share of slack among multiple activities. A robust optimization model for the resource-constrained project scheduling problem aimed at weighted slack maximization is developed. According to the feature of the model, a simulated annealing algorithm based on the tabu search is presented. Finally, the results of the numerical example validate the reasonableness and the effectiveness of the measurement and the algorithm. Also, the superiority of the newly proposed index over the old ones is proven by comparison results and it can meet the demands of quality robustness of the project scheduling better.

Simplification of Time-cost Tradeoff Problem with Generalized Precedence Relations

SU Zhi-xiong, QI Jian-xun, KAN Zhi-nan

2015, 24(5):  175-183.  DOI: 10.12005/orms.2015.0174

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For classic time-cost tradeoff problem, only single time constraint exists between activities, and it could be represented by CPM network. But for time-cost tradeoff problem when multiple time constraints exist between activities, which mainly contain maximal and minimal time constraints and are named as generalized precedence relations(GPRs), it only could be represented by GPRs network which is more complicated than CPM network. Firstly, huge differences between the time-cost tradeoff problem with GPRs and the classic problem are analyzed: under GPRs, (1)compressing durations of some critical activities could compress total duration, but compressing durations of some other ones could prolong the total duration; (2)compressing or prolonging duration of activity may damage feasibility of project etc. Secondly, property of GPRs network is studied, and path length theorem of the network is deduced. Thirdly, according to the theorem, simple algorithm to simplify large scale time-cost tradeoff problem with GPRs is designed for decreasing difficulty and computation greatly of solving the problem. And finally, the algorithm is illustrated by example.

Research on the Similarity of High Dimensional Big Data Based on Extenics

YUAN Rui-ping, SHI Ming-ruo

2015, 24(5):  184-188.  DOI: 10.12005/orms.2015.0175

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The similarity calculation of high dimensional big data is a research focus in the field of data mining. In this paper, after analyzing the difficulty of similarity calculation of high dimensional data, a method based on extenics is put forward to solve the contradictory problems. Firstly, the element is used to represent high dimensional data. Then the similarity between data is calculated by means of data conversion, data selection, weight determination and data pre-processing technology. Finally the conventional analysis data of water pollution is used to verify the method. The idea of using extenics to solve similarity problem of big data can not only promote theoretical research of data mining, but also provide a new application for extenics.

Application Research

Research on Loan Pricing Model Based on the Interval DEA

CHI Guo-tai, DU Yong-qiang, HAO Xi-ge, LIU Jun-bo

2015, 24(5):  189-196.  DOI: 10.12005/orms.2015.0176

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In the buyer’s market of loan or the sufficiently competitive financial environment, the loan interest rate will not be decided by banks alone. Therefore, to establish mutually acceptable loan interest rate pricing model between the bank and enterprise is particularly important in the reality. In this paper, we use interval numbers to reflect the deposit interest rate, compensation rate of default risk and some other uncertainties of pricing indicators. We make up loan pricing efficiency interval with the old loan minimum and maximum pricing efficiency. Then we take them as the target and use the new loan interest rate as decision variables. We establish the new loan pricing model based on interval number DEA through reversely solving interval DEA model. The innovation and contributions lie in, firstly, taking the deposit interest rate of the old loan, target profit margin and some other pricing indicators as inputs and old loan interest as outputs, and using DEA model to get the actual minimum and maximum pricing efficiency of the old loan; secondly, taking mutually acceptable loan pricing efficiency interval as the outputs and take interval number pricing indicators, such as interval number deposit interest rate of new loans as inputs. In this way, we can get the loan rate interval; thirdly, using interval numbers to reflect compensation rate of default risk, target profit margin and other pricing indicators instead of constant numbers, so as to change the unreasonable situation that the current study uses constant numbers to represent these parameters. research result shows that deposit interest rate, expense rate, compensation rate of default risk and target profit margin are proportional to the loan interest rate. The loan interest rate can be reduced through improving capital settlement ratio and loan-to-deposit ratio.

The Maximum Entropy Configuration Model of Objective Index Weight
Based on Grey Class Sensitivity Coefficient

LIU Hong-qi, FANG Zhi-geng, LI Wei-dong, TAO Liang-yan

2015, 24(5):  197-205.  DOI: 10.12005/orms.2015.0177

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To determine the weight values of assessment indexes is the crucial link in multiple attribute decision making problems. However, today’s researches have used the evaluation index difference, which tends to ignore the evaluation index of the importance for the evaluation object and the system. Based on the natural essence attribute differences, this article uses the grey correlation clustering to classify the evaluation object into the default category, and by the analysis method of being with or without contrast, defines the grey class sensitivity coefficient which influences the impact of the indexes for the evaluation of all the object classes; and based on the maximum entropy criterion,sets up the objective weight maximum entropy configuration model based on the grey class sensitivity coefficient to determine the weight of multiple attribute decision making. Through the contrast analysis of actual cases in ref. [21,26], it shows the effectiveness and closeness to the reality of this model, which has put forward a new thought for solving multiple attribute decision making problem.

Analysis of Impacts of Countervailing Power on Market Performance
and Seller’s Process Innovation Intensity
Based on Cooperative Game

AN Gang, LI Kai, CUI Zhe, LI Wei

2015, 24(5):  206-213.  DOI: 10.12005/orms.2015.0178

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We consider a vertical relationship model which consists of an upstream firm and two downstream firms, and construct calculation models of upstream firm’s process innovation intensity in three different situations-vertical integration, vertical separation in which neither downstream has countervailing power, vertical separation in which only one downstream has countervailing power. By doing these, we analyse the changes of wholesale prices, retail prices, profits and social welfare in equilibrium and get corresponding conclusions, and we also show that “Galbraith hypothesis” has not been verified in the structure of this paper.

A Method for Knowledge Service Capability Evaluation Based
on inguistic Choquet Integral

CHEN Xi, HAN Jing, CAO Hong-liang

2015, 24(5):  214-221.  DOI: 10.12005/orms.2015.0179

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A method is proposed to evaluate and enhance the capability considering correlated fuzzy linguistic index in knowledge service. To solve this problem, an evaluation index system and a matrix model are made up. Then, it gives the character and formal description of knowledge-service capability evaluation problem considering correlated linguistic index. Meanwhile, the 2-tuple linguistic Choquet integral is presented and the knowledge-service capability can be integrated and calculated. Finally, an illustrative example is used to show the practicality and effectiveness of the proposed approach.

A Study on the Relationship between the Chinese Stock Market
Returns and Idiosyncratic Volatility

WANG Chun-feng, ZHANG Chi, FANG Zhen-ming

2015, 24(5):  222-227.  DOI: 10.12005/orms.2015.0180

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This paper studies the problem of idiosyncratic volatility in Chinese stock market. There are three problems discussed in this paper. They are the identification of an idiosyncratic volatility, the relationship between the idiosyncratic volatility and stock returns and pricing problem. The purpose of this study is to find the status of the idiosyncratic volatility in Chinese stock market, including the pricing and stock return two problems. In the empirical research, combined with Chinese stock market data, we use the statistical method of generalized moment estimation(GMM)to get the idiosyncratic volatility and we analyze the relationship between the stock returns and idiosyncratic volatility. At last we find that the idiosyncratic volatility is not priced in Chinese stock market. Moreover, there is no correlation between the idiosyncratic volatility and stock return. Thus, when the investors want to make a decision, they should consider the influence of idiosyncratic volatility adequately.

Pricing of Interest Rate Swap Based on No-arbitrage Model

SUN Wei, TIAN Fang

2015, 24(5):  228-236.  DOI: 10.12005/orms.2015.0181

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Pricing models of interest rate swap(IRS)with unilateral default risk based on two no-arbitrage models BDT and Hull-White are constructed, and then these two models are used to price 3MSHIBOR-IRS for one year, and at last make a sensitivity analysis of the pricing results of the two models. The results show that two pricing models exhibit the consistency of pricing deviation and BDT-based model has smaller offer gap than Hull-White-based model.

Study on the Influence of the Crowding Trade of Securities
Investment Funds on Stock Bubble

JIA Li-na, HU Wen-xiu, ZHANG Wei-guo

2015, 24(5):  237-244.  DOI: 10.12005/orms.2015.0182

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With the number of Securities Investment Funds increasing, the phenomenon of crowding trade that many funds heavily hold the same stocks at the same time is obvious. This paper collects the panel data to analyse the relationship between the crowding trade of funds and stock bubble. The result shows that when more than six funds hold the stock, the crowding trade will promote bubble formation. On the contrary, when the stock hold by less than six funds, the relationships between the above mentioned is not obvious. This means that the relationship needs to meet the certain conditions. Therefore, management should pay great attention to the stock held by more than six funds, for such stocks tend to form larger bubbles, and at the same time there is a greater risk of collapse. In addition, management should also be careful about the market expectations by the policy before it is approved so as to prevent fund managers from having the same belief and actions whenever possible, in order to reduce the fund crowded trade phenomenon.

Incentive Issues on Information Sharing between Firms

GAO Jie

2015, 24(5):  245-250.  DOI: 10.12005/orms.2015.0183

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This study considers a supply chain system with a dominant retailer purchasing a product from a manufacturer, who has private superior knowledge about market demand, where the retailer’s market information estimate is modeled as a continuous random variable characterized by mean and variance. Under this setting, would the manufacturer be willing to improve the retailer’s imperfect knowledge when the retailer is designing her purchasing contract? If possible, could a more sophisticated contract provide more incentives for the manufacturer to do so? The results of this research show that: (i)The manufacturer wishes the mean of the retailer’s estimate as low as possible, while there exists an interior point of variance that maximize the manufacturer’s profit: below the interior point, the manufacturer wishes the retailer have a higher variance; while above the interior point, the manufacturer wishes a lower variance from the retailer, which means the manufacturer is willing to share the information with the retailer under certain conditions. (ii)There is no evidence that a more sophisticated contract can offer more incentives to the manufacturer to improve the information of the retailer. The results call for new contracts developed to induce the manufacturer to honestly reveal his private information.

Management Science

Research into the Dynamic Evolution Mechanism of the Forming of Chinese
Construction Industry Competitiveness in the New Century
——On the development strategy after entering GPA

HUO Teng-fei, LIU Bing-sheng, CHEN Yuan, WANG Xue-qing

2015, 24(5):  251-258.  DOI: 10.12005/orms.2015.0184

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With imminent accession to the GPA (Government Procurement Agreement), Chinese construction market will come with more intense competition, facing many high-quality foreign enterprises. In this context, exploring the dynamic evolution mechanism of the competitiveness of Chinese construction industry, and analyzing the shortage of current construction industry in the development process, with the aim to scientificly guide and reasonably regulate the development of the construction industry, are of great practical significance. This study constructs the competitiveness evaluation index system of Chinese construction industry, which first uses “multi-target evaluation index system” to establish an evaluation model of Chinese construction industry competitiveness. And it analyzes the changing trend of the importance degree of competitiveness elements of Chinese construction industry from 2005~2008, and depicts the evolution mechanism of the construction industry competitiveness. We find that Chinese construction industry is still in the primary development period of labor-intensive and capital-intensive stage with low industrialization quality, which focuses on the scale rather than the efficiency; Currently, additional investment of simple production factors is still the most effective way to improve industrial competitiveness means, which is getting more severe.Finally, we analyze the main reasons for Chinese construction industry’s poor competitiveness and then puts forward specific measures to improve it.

Strategy Reconstruction in State-owned Enterprise Restructuring:
Case Study of China Ocean Aviation Group Limited

LIU Jing-zhen, YANG Chang-hui, ZHOU Kai-le

2015, 24(5):  259-263.  DOI: 10.12005/orms.2015.0185

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State-owned enterprises(SOEs)play an important role in China’s national economic development, and SOE restructuring is an important way to solve the many problems faced by SOEs. The strategy restructuring and consolidation is an important component in SOE restructuring. In this paper, we first propose the restructuring and integration mechanisms of strategy restructuring in SOE restructuring. Then, taking the successful restructuring of China Ocean Aviation Group Limited as an example of case study, we discuss and summarize the successful experiences and practices of its strategy restructuring. These have significant reference value for the restructuring of other SOEs. Also, it is helpful for the improvement of SOE restructuring related theories.

Research on the Creative Imitation Innovation Based on Basic Element

XIAO Hui-min

2015, 24(5):  264-269.  DOI: 10.12005/orms.2015.0186

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Based on the introduction of creative imitation innovation in the secondary innovation, the necessity and feasibility of using this technology innovation are analyzed in this paper. Also it takes vibrating screen of petroleum machinery industry for example and describes the entire innovation process by using extension innovation method. Then, with the extension transfer, an innovative product is obtained. Using this method, we have obtained satisfactory innovative products, improved the utilization of emerging technologies, and proved it to be scientific and effective.

Research on The Critical Chain Buffer Setting Model of EPC Project

LIU Shu-qing, LUO Dan, LIU Jia, CHEN Dan-dan

2015, 24(5):  270-280.  DOI: 10.12005/orms.2015.0187

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The inaccurate estimation of buffer time always has influence on the project planning and control of EPC project, in order to solve the problem effectively, on the basis of analyzing the current research achievement and existing problems of critical chain buffer setting, firstly, viewing the literature, designing questionnaires and collecting data, processing and analyzing data, the influence factors of EPC project buffer setting have been extracted through the exploratory factor analysis method, and 21 key influence factors of buffer setting are determined; Secondly, the process synthesis weights calculation model is constructed based on the weight of different factors and different factors have different effects on the process, meanwhile, introducing the process position weight and the risk elastic coefficient of processes operating time, a quantitative determination model of the project buffer and the input buffer is established; Finally, an example of EPC project is applied, argued the accuracy and operability of the key chain buffer setting model, referenced for the EPC project buffer setting.

Strategy Design on Online Leasing Problem with Decreasing Purchasing Price

HU Mao-lin, XU Wei-jun

2015, 24(5):  281-287.  DOI: 10.12005/orms.2015.0188

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In this paper, we use the method of competitive analysis for online problem to study an online leasing problem with decreasing price for purchasing. By analyzing the properties of cost functions concerned, the optimal offline strategy and an online strategy are given. By way of the analysis of competitive rate, we prove online strategy to be the unique optimal strategy for this problem, and competitive rate of this strategy is strictly decreasing with the preferential rate of purchasing price. The result shows that taking the factors of the decreasing of purchasing price will improve the competitive rate of online strategy and thereby increase the decision-making efficiency.