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The topic of behavioral objectives has recently received considerable attention in the academic community. This paper contains a comprehensive overview of issues and explores the relevance of using the behavioral objective framework for teaching quantitative methods (QM) to undergraduate business administration students. Included in the paper are (1) a discussion of the nature and meaning of behavioral objectives, (2) arguments for and against their use, (3) a rationale for their use in a QM course, and (4) a series of examples demonstrating the use of behavioral objectives in a quantitative course. The evidence—consisting of expert opinion from professionals who have successfully used behavioral objectives for teaching quantitative material, the logic of the arguments for behavioral objectives, consideration of arguments against objectives along with rebuttal to these arguments, and the available empirical studies—indicates that behavioral objectives do appear to offer considerable potential for improving QM teaching. The use of behavioral objectives is worthy of thoughtful consideration by QM teachers. [ABSTRACT FROM AUTHOR]

When an underwriting syndicate submits a bid for a new issue of municipal bonds, one of the important decisions that it must make involves the scheduling of interest coupons to be placed on the bonds. Given the bid specifications stated by the issuing municipality and some prior decisions of the underwriters, it is shown that the determination of the optimal coupon schedule can be expressed as a linear programming problem. Since this LP problem has a special structure, a simple computational algorithm requiring less computation than the simplex method is derived. This paper goes beyond previous contributions to the literature in three important ways. First, simple formulas for obtaining the dual evaluators are developed; the marginal effect of shifts in the yield curve is also presented. Second, it is shown that in the non-integer year case both the conclusions of previous writers and the conventional heuristics of the market may be erroneous, whereas the general solution techniques developed in this paper remain valid. Finally, a direct analogy between the coupon schedule problem and the microeconomic theory of the firm is used in obtaining the special computational algorithm for this LP problem. [ABSTRACT FROM AUTHOR]

Surveillance operations in general involve detection devices, search (allocation-of-effort) procedures, and decisions leading to action of some kind. There has been a tendency to model the three phases of search, detection, and action separately, albeit the output parameters of one such model often are used as the inputs to others. This paper considers some of the interfaces between these phases and includes some simple examples of the relation between search, detection, and decision theories involving false alarms, continuous surveillance, localization, and selection of appropriate measures of effectiveness. [ABSTRACT FROM AUTHOR]

The article presents some notes related to the publication of a journal "Policy Sciences." The objectives of this journal are threefold. First to provide a forum for papers in the various policy science disciplines--political science, sociology, operations research, statistical decision theory, and so on--dealing with the making, choice, critique, evaluation, and implementation of policy, including how-to-do-it papers on these aspects. Second, to promote the policy sciences, to actively encourage the mingling of the decision with the behavioral sciences and the development of a new interdisciplinary activity. Third to aid in the improvement of policymaking systems and capacities.

A decision-making orientation to systems design has been suggested to overcome some of the current deficiencies of computer-based information systems. This paper derives several hypotheses from a decision-making framework proposed by Robert Anthony. These hypotheses are tested with empirical data from a sample of twenty major computer-based information systems drawn from seven Bay Area manufacturing firms. The results indicate that present computer-based information systems follow the descriptive aspects of the Anthony framework, but have had little effect on top management. There is little evidence of common guidelines for systems design which are accepted by the different companies. The data also indicate that users have a strong negative reaction to large numbers of computer-produced reports. The implications of the results for systems design are discussed. [ABSTRACT FROM AUTHOR]

The dynamic programming recursive procedure has provided an efficient method for solving a variety of multi-stage decision problems in which the objective is measured by a real valued utility function. In this paper we propose that the real valued objective function be replaced by preference relations. Sufficient conditions are given on the structure of the preference relations to insure that the recursive dynamic programming procedure yields an optimal sequence of decisions. The solution method is well adapted to an interactive mode of implementation in which there is a dialogue between the decision maker and a source of information and analysis (e.g., a computer). The "computer" collects, analyzes, and presents information on a set of alternatives to the decision maker who then communicates to the "computer" his choice of the best alternatives in the set. The process is repeated, stage by stage, thus generating an optimal sequence of decisions. The approach should be particularly useful in dealing with multi-stage decision problems involving design and/or operation of facilities and multi-period public projects where a variety of desiderata must be considered (i.e., a simple cost or benefit function is inadequate). [ABSTRACT FROM AUTHOR]

This paper reports a study which developed and empirically tested a simulation model of the process by which zoning ordinances are altered to adapt to the changing needs and conditions of a city. The perceived decision rules of the participants are reported in the form of flow charts which utilize language similar to that used by the participants. The body of the paper indicates methods which were used to translate these judgmental rules into a form suitable for a computer. The model was tested by allowing the computer to decide the one hundred twenty-five proposed changes in the zoning map of the City of Pittsburgh during the period 1963 to 1965 inclusive. The results were good in the sense that the computer model decided most of the cases in the same way as did the human participants. Additional tests and managerial implications are also discussed. [ABSTRACT FROM AUTHOR]

This survey examines eight mathematical programming models of pattern classification. The paper determines the range of applicability and computational merits of each model. The flexibility and large sample properties of the models are also discussed. We find that six of the models produce decision rules that maximize a function we call the quality of a decision rule. The remaining two models minimize a weighted sum of errors. [ABSTRACT FROM AUTHOR]

In this paper the nature of a set of cost-benefit studied alternatives is studied. An integrated set of submodels is assumed to provide the foundation for a cost-benefit schedule. The model is formulated as an efficiency problem using the technique of vector maximization. Efficient points are characterized by a set of decision rules. A local cost-benefit function is developed. Comparative statics (sensitivity analysis) results show that there exist efficiency substitution and benefit effects. These effects are the basis for rigorous definitions of efficiency substitutes and complements. [ABSTRACT FROM AUTHOR]

Refunding is the operation by which the issuer of a bond calls it before maturity in order to replace it with another issue. The chief reason for calling is the interest saving which a new bond may make possible. In deciding whether to call a bond at any given time, the issuer must consider not only the potential savings from the current refunding, but also from future refundings up to some horizon fixed by financial policy. These savings must also be compared with those resulting from the decision to postpone refunding. This paper formulates the refunding problem in terms of a dynamic programming model in which the term structure of interest rates is utilized to obtain information about the future course of interest rates. [ABSTRACT FROM AUTHOR]

In this paper a dynamic, adaptive model, called DEMON,[4] is interpreted in terms of a network. The latter is here employed to reduce the problem of selecting optimal decision procedures so that these can be interpreted in terms of a conditional sequential designation of links from such a network. More is involved, however, than is immediately apparent from the network possibilities only. Thus, in the DEMON applications to new product marketing -- as discussed in the present paper -- it is necessary to comprehend additional chance and deterministic constraints such as (1) payback, or breakeven, conditions that may be specified for fulfillment over a given time horizon, (2) minimum expected level of profits required and (3) study budget limits which should not be exceeded. By means of preemptions or over-rides, which also form a part of DEMON, however, it is possible to relate these additional constraints to the network as we also show by means of a development via ideas associated with the right inverse of an incidence matrix. It is important to note that the chance constraints in DEMON -- and hence the objective also -- are associated with probability distributions that are only partially determined by the selection of a sequence of link designations in the network of (statistical) study possibilities. Thus, a link selection yields only a random variable whose sample value in turn determines a conditional probability distribution in terms of which the chance constraints (and the objective) are expressed. Also involved is the further issue of optimal allocation between the elements of a marketing plan (e.g., resource allocations to advertising, promotion, etc.) which, in turn, alters the distribution through its mean demand. Thus, the task of DEMON is to choose a best distribution through two avenues: (a) a best path through the network of study possibilities and (b) a best deployment of funds in terms of a marketing plan. To conveniently summarize this double optimization we refer to the DEMON objective as MEMP (=Maximize Expected Maximum Profit.) But, of course, the selection of a best distribution in accordance with MEMP is confined only to those candidates admitted by the network of study possibilities and the chance (and other) constraints. Al [ABSTRACT FROM AUTHOR]

This paper starts with a brief summary of Harry Markowitz's portfolio selection model and proceeds to reformulate it within the framework of modern statistical decision theory. The future returns from securities are viewed as a function of the unknown state of nature. The investor has certain a priori probabilities for the different states of nature, which probabilities he later modifies in the light of new experimental information. Following the Bayesian strategy, the investor chooses that portfolio of securities which maximizes the weighted average of payoffs, using as weights the a posteriori probabilities of the states of nature. A computer program, based on the critical line method, is used to solve a simple illustrative problem. [ABSTRACT FROM AUTHOR]

This paper deals with the application of dynamic programming to systems whose duration is uncertain, and which duration may or may not be a function of the decisionmaker's policy. It extends some of Bellman's work in that the transformed states at successive stages may not have the properties demanded by Bellman; e.g., the state norm need not diminish at all, and can, in fact, increase. The paper deals primarily with computational considerations since, in general, analytic solutions to functional equations are not forthcoming. Both discrete and continuous formulations are considered, the appropriate one to choose depending on the number of states one wishes to cater for, the continuous formulation having certain advantages which the discrete case does not have when a very large number of states are to be differentiated. [ABSTRACT FROM AUTHOR]

The article summarizes the findings of the Symposium on the Possibilities of Operations Research in Developing Countries, held in Paris, France, June 26-28, 1963. The symposium first explored the definition of "operational research." They then investigated the problems inherent in the ideas' expansion into developing countries.

This paper investigates the optimality of making two insurance decisions independently in the expected utility framework, when the two risks under consideration are independent. It is shown that when the disutility function embodies constant risk aversion, independent decision-making is identical to optimal joint decision-making. When the disutility function has strictly decreasing risk aversion, joint decision-making is always not less conservative than independent decision-making, and the opposite holds when the disutility function has strictly increasing risk aversion. Stronger results are obtained for some particular disutility functions. Finally, some implications of these results for empirical research in utility and decision theory are considered. [ABSTRACT FROM AUTHOR]

As planning problems become more complex and the pace of change quickens in the society, managers are increasingly turning to the computer for assistance in their planning problems. But considering the rather disastrous track record of many computer aided planning systems, there appears to be cause for alarm. The executive needs a good briefing on the managerial aspects of computer based planning systems. [ABSTRACT FROM AUTHOR]

Several recent developments in marketing information systems and analytical marketing models are described. These developments in combination with others reported in this JOURNAL OF MARKETING symposium will cast the future marketing executive in the role of a market engineer. He will have a heavier involvement in planning rather than doing, and in profit maximization. [ABSTRACT FROM AUTHOR]

This article presents a review and comparative analysis of vocational decision-making models. Here, the authors believe that psychological decision theory provides a useful framework for clarifying the relationships among various vocational decision-making theories and between these theories and the population of decision situations with which peopled are faced. This paper outlines psychological decision theory; summarizes eight prominent vocational decision-making (DVM) models; compares and contrasts VDM models on basic assumptions and fundamental concepts; and suggests applications of theory to theoretical decision types. Implications for research, theory, and practice are discussed.

The whole concept of modelling has caught on, aided immeasurably by the considerable progress in computer technology. Mini-computers, timesharing systems, remote terminals, and graphical displays have placed computer power directly into the hands of the decision maker. This paper presents a corporate decision-aiding system, a family of timeshared models, developed for Xerox of Canada Limited (XCL) in an effort to link the functional areas for communication, planning, and control purposes. Using the approaches of statistical forecasting, heuristics, and simulation, the XCL Decision System assists and guides management all the way from deriving product demand forecasts to simulating the day-to-day operations of the firm to formulating divisional financial statements to preparing corporate operating and medium-range plans. Developed in a short time span and at low cost, the system is used extensively in Canada and has been adopted, in part, by U.S. corporate and regional offices. [ABSTRACT FROM AUTHOR]

Non-profit institutions must make many kinds of decisions about allocations of resources. The theory is clear: allocate so that the marginal utility is equal in all uses. But this is more easily said than done. This paper suggests a series of heuristic steps by which real-life non-profit allocation situations can be coordinated to the marginal analysis. It discusses the assumptions that must and should be made and sets forth a conceptual framework for the analytic decisions. The process is illustrated with an example from library research--the decision about how many books should be placed into storage libraries to maximize the welfare of a university community. [ABSTRACT FROM AUTHOR]

This paper explores the implications of the crime problem and suggests approaches for improving the quality of comprehensive criminal justice planning. For California, the Bureau of Criminal Statistics indicates increases in the number of reported index offenses from 250,000 to 555,000 and a 70 percent increase in the crime rate between 1960 and 1968. If the ultimate end of justice is to ensure on behalf of the public and the offenders within the system that the fairest and most effective course of action will always be selected among available alternatives, then criminal justice planning information systems will have to be organized as aids to a more rational and systematic planning and decision-making process. A study of recidivism rates can lead to a cost-effectiveness measure as a means of rationalizing the release procedure.

A decision theory approach is used to model the information retrieval decision problem of which documents to retrieve from a library collection in response to a specific user query for information. A thorough discussion of decision theory, including the components of the alternatives, states-of-nature, outcomes, and evaluations-as well as of the optimization process under the cases of certainty, risk, and uncertainty-is presented. Bayesian statistics are also discussed to show how prior information about the various documents via classification analysis can affect the decision process under risk. An example problem is used to illustrate the decision theory approach and to compare the overall performance of the retrieval system under risk with and without the document classification information. Thus, the operations research technique of decision theory is used to model the retrieval decision process, illustrate how important evaluation is, and to demonstrate the value of prior information via document classification analysis. Moreover, the paper presents, in a somewhat tutorial mode, an overall framework for considering the information retrieval decision problem, incorporating the aspects of cost-effectiveness and alternative evaluation, which allows one to better understand the contributions made by many researchers in this crucial area. [ABSTRACT FROM AUTHOR]

A generalized framework for developing analytical and conceptual relationships involving the flow of information has previously been suggested. This paper provides further refinement, rigor, and extension for some of the earlier relationships suggested. In particular, a measure of the amount of information is defined as the difference of the value of the decision state of the decision-maker after and before receipt of the message. This measure is universally applicable for all information that is concerned with the effectiveness of the message upon the recipient. It is accordingly called pragmatic information. The definition is a direct consequence of the interdependence between information and decision-making and of the definition that information is data of value in decision-making. In order to evaluate this measure of information, it is convenient to use a generalized information system model which has previously been proposed and which has virtually universal applicability. The use of this model permits the evaluation of the measure of information in terms of the reduction of uncertainty to o decision maker. Six different types of uncertainty are identified. Specifically, a type of uncertainty which is generally overlooked in the decision-making literature is found to be important. This is called executional uncertainty. It is pointed out that the information science aspects of decision theory must cover comprehensively those decision-makers who not only are expert but those decision-makers who may be mediocre or even rather poor. Although any decision rule may be utilized in terms of the framework outlined, a suggested rule which is convenient and reasonable is proposed for evaluating the decision state of a decision-maker of any point in time. The measure of information suggested is situation, time, and decision-maker dependent. The framework and relationships developed ore on important step toward the development of a true theory of information science. It is further suggested that each data set or document might have some average (over time) amount of information content for o decision-maker of any given ‘effectiveness’. The relationship of this average amount of information as a function of the decision-maker effectiveness is suggested as an important functional relationship that exists for every document. It is called an information profile of that document or data set. A typical information profile is suggested. [ABSTRACT FROM AUTHOR]

Funding of research projects is considered as encompassing three stages: (1) an initial short run plan for funding based upon projected regular demands and availability subject to random deviations; (2) adjustment of the initial plan to take into account the actual regular demands and availability and the funding of significant break-throughs which occur at random intervals preempting other demands; and (3) a plan for longer-run availability and demands which constitute a "posture" desired subsequent to the funding adjustments of (2). The essence of the distribution of the unexpected demands is multi-modality with low probability of occurrence but high resource demand when they do occur. This approach represents a substantial departure from the usual planning model development which produces only an optimal plan based on forecasted developments without provision for adjustment when the forecasted events actually materialize and additional unexpected demands are placed on resources. The adjustment process explored here—which provides the mechanism for optimal implementation of the original plan or control of resource allocation—enables optimal response to information received in "real-time" avoiding the frequently observed over-or underresponse to receipt of such information without reference to the impact of the interim decision on future capabilities. [ABSTRACT FROM AUTHOR]

The article reports that despite the fact that men have been making collective decisions for thousands of years, suggestions of new technologies for making these decisions are rare. This intellectual inactivity is apparently borne of frustration, not of complacency. The aversive predicament is that while a generally efficient decision process must be based upon true individual evaluations of group alternatives, any kind of decision process based upon the free market, democratic voting, or authoritarian rule cannot generally induce individuals to reveal the true strength of their evaluations.

The article addresses portfolio distributions and tests of security selection models. The authors present the results of a study that examined the relationship between certain portfolio decision models and probability distribution of returns and then, using the empirically derived distributions, compares them to actual portfolio decision rules. The authors explain that the model is based on the Markowitz model and presents the methodology and results. The authors find that this methodology provides an effective method for measuring portfolio performance and facilitating portfolio management. The authors predict that computerized screening will become more sophisticated and that security analysts will avail themselves of this new decision support technology.

The article examines the correlation between accounting information and investment decisions. A regression model was employed to test the decision-relevance of particular annual report accounting variables. The model results provide support for the utility of accounting information. The decision-relevance of annual report accounting information for investors has important implications for accounting theory. If existing accounting information has utility any attempts to suggest improved information for users must be carefully considered. New bases for developing investor information must have greater utility than existing data to offset changeover costs incurred to handle different information inputs.

The article discusses aspects of optimal accounting information systems for unidentified users. The conditions required for such optimality involve the concept of a sufficient information system a concept relating to the statistical properties of information. Analysts say that for a set of alternative information systems a system is optimal for an unidentified user if and only if it is sufficient with respect to each of the alternatives. A decision model is presented comprised of a decision structure and a corresponding search problem. The decision structure is suggested to comprise a resource space, a state space, an outcome set, a transformation function, and a payoff function.

The article discusses the importance of systematic analysis of information systems alternatives. Recognition of the fundamental choice or decision aspects of an information system design problem provides a framework for systematic analysis of the information system alternatives in terms of their respective consequences. In the analysis the "expected value of perfect information" calculation is adapted to provide improvement bounds for information seeking by an individual selecting an information system. One application is the determination of the maximum value of any information an accountant might acquire before deciding which accounting system to employ.

A few marketing groups are engaged in sophisticated computer applications; others are at an elementary stage and in conflict with computer service departments. Most firms operate marketing information systems which lag behind computer techniques. An overview of the situation is offered with organizational recommendations. [ABSTRACT FROM AUTHOR]

Computer simulation techniques have been used successfully in solving marketing management decision problems. Can these techniques be applied to the analyst's problem of selecting the best solution techniques for analyzing marketing decisions? The author indicates they can. "Methodological simulation" can also be used to narrow the "credibility gap" between the analyst and the manager. [ABSTRACT FROM AUTHOR]

The author provides insights into the need for marketing information systems and discusses their benefits, organizational needs, structural requirements, and general limitations. Illustrations of current marketing information systems are provided. [ABSTRACT FROM AUTHOR]

This article focuses on the usefulness of heuristic models in business planning. The use of computer algorithms and stochastic processes are appropriate for certain sophisticated business models. However, such advance modeling can use resources such as time and money that may not be practical. The use of heuristic models allows many companies to approach decision making based on less information. Heuristic models have been used to develope delivery schedules, airline schedules, certain aspects of marketing, and problems associated with warehouse storage.

Systematic decision making tools have been generally overlooked by college and university decision makers. There is a noteworthy need in academic management for further utilization of decision theory techniques, subjective probability, and mathematical model building. [ABSTRACT FROM AUTHOR]

A decision theory model of the diagnosis and treatment of a serious medical condition, acute renal failure, has been implemented as part of a study of automated judgmental decision-making. An interactive diagnostic computer program was used to test the model. This program employs formal decision procedures and the subjective assessment of likelihood and preferences of experts to analyze the diagnostic/treatment problem. The program's success in duplicating the decisions of expert clinicians in about 90 per cent of the cases used indicates that the method of analysis is not only a convenient structure for theoretically describing diagnosis and treatment, but that it is potentially a practical way of analyzing such decision problems. [ABSTRACT FROM AUTHOR]

The article addresses the lack of formal analysis of the information systems which serve organizations and process data in the study of aggregate planning problems. The article argues that instead of being an independent process, systems analysis should be considered integral to performance improvement and should be given due consideration when discussing the economics of decisions and information processing. The author suggests some practical extensions of the decision theory model for the design of management information processing systems and illustrates these ideas through the detailed analysis of an aggregate planning problem. The author presents a systems analysis process including programming optimal strategy decision rules and economics and information processing systems design.

Judgments of the relative similarity of pairs of alternatives are used to construct a model of the decision space of a group of college admissions officers. This model is then used to predict the preferences of the officers. The accuracy of the predictions supports the hypothesis that preference judgments are made on the basis of the similarity of given alternatives to an "ideal" alternative. A nonmetric multidimensional representation based upon very few assumptions about the nature of the similarity measures. [ABSTRACT FROM AUTHOR]

Decision-making systems consisting of n independent decision devices and designed to include a simple voting redundancy scheme are discussed. it is shown how to determine the threshold level or minimum number of votes that must be received so as to minimize the probability of the system making an incorrect decision. Applications of such systems can be found in the areas of target detection and fault isolation of electronic equipment. [ABSTRACT FROM AUTHOR]

This article focuses on the role of theory in making individual and social decisions. The two aspects of decision-making are based on firstly, the primarily scientific and amoral problem of analyzing and predicting the relevant consequences of alternative decisions or actions and secondly, the primarily moral and ascientific problem of evaluating and choosing among alternative consequences. It is interesting to note that when essentially scientific procedures are applied to decision making problems, the criterion for evaluating the results of alternative decisions is taken as given a priori and no effort is made to derive it analytically. Historically, classical economic theory has undoubtedly had both scientific and moral content for those who developed and used it. It has been noted that this duality has sometimes been a source of confusion. The economists would be better of with a working command Marshall's economics than with a command of Cramer's statistics, if a choice had to made.

This article presents a discussion on decision theory and utility management. The article also aimed to impart important contributions to readers through the presentation of carefully selected references which furnish what may be considered an appropriate base for the acquisition and understanding of decision theory and utility management in behavioral sciences. Some of the recent books and articles on statistical decision theory contain a number of remarks at variance with the fiat and scripture that currently dictate the practice of statistical generalization in scientific research and industrial quality control. A discussion about the importance of probability and mathematical expectation, the major concepts in decision theory were also discussed.

Information about the "Science and the City" conference, which was held on November 14 and 15, 1963 is presented. During the conference, H. M. Finniston of International Research and Development Co. Ltd. summed up the problem facing the industrialist and investor who want to keep abreast of rapid technological change. The conference was designed to explore the general patterns of innovation- and the decision-making processes.