Simulating interbank payment and securities settlement mechanisms with the BoF-PSS2 simulator

The simulation technique provides a new means for analysing complex interdependencies in payment and securities settlement processing. The Bank of Finland has developed a payment and settlement system simulator (BoF-PSS2) that can be used for constructing simulation models of payment and securities settlement systems. This paper describes the main elements of payment and settlement systems (system structures, interdependencies, processing steps, liquidity consumption, cost and risk dimensions) and how these can be treated in simulation studies. It gives also examples on how these elements have been incorporated in the simulator, as well as an overview of the structure and the features of the BoF-PSS2 simulator.simulations; simulator; payment systems; clearing/settlement; liquidity

A Metamodel-Based Monte Carlo Simulation Approach for Responsive Production Planning of Manufacturing Systems

Production planning is concerned with finding a release plan of jobs into the manufacturing system so that its actual outputs over time match the customer demand with the least cost. The biggest challenge of production planning lies in the difficulty to quantify the performance of a release plan, which is the necessary basis for plan optimization. Triggered by an input plan over a time horizon, the system outputs, work in process (WIP) and job departures, are non-stationary bivariate time series that interact with customer demand (another time series), resulting in the fulfillment/non-fulfillment of demand and in the holding cost of both WIP and finished-goods inventory. The relationship between a release plan and its resulting performance metrics (typically, mean/variance of the total cost and the demand fulfill rate is far from being adequately quantified in the existing literature of production planning. In this dissertation, a metamodel-based Monte Carlo simulation (MCS) method is developed to accurately capture the dynamic and stochastic behavior of a manufacturing system, and to allow for real-time evaluation of a release plan in terms of its performance metrics. This evaluation capability is embedded in a multi-objective optimization framework to enable the quick search of good (or optimum) release plans. The developed method has been applied to a scaled-down semiconductor fabrication system to demonstrate the quality of the metamodel-based MCS evaluation and the plan optimization results

Water allocation policies for the Dong Nai River Basin in Vietnam: an integrated perspective

Recent water sector reforms, increased scarcity and vulnerability of existing water resources, combined with declining public funding available for large-scale infrastructure investment in the sector have led to an increased awareness by the Government of Vietnam for the need to analyze water resource allocation and use in an integrated fashion, at the basin scale, and from an economic efficiency perspective. This paper presents the development, application, and results from an integrated economic-hydrologic river basin model for the Dong Nai River Basin in southern Vietnam that attempts to address these issues. The model framework takes into account the sectoral structure of water users (agriculture, industry, hydropower, households, and the environment), the location of water-using regions, and the institutions for water allocation in the basin. Water benefit functions are developed for the major water uses subject to physical, system control, and policy constraints. Based on this modeling framework, policies that can affect water allocation and use at the basin level, including both basin-specific and general macroeconomic policies, are analyzed.River basin model, water allocation policy, integrated assessment, Vietnam, Dong Nai basin, Water resources Economic aspects,

INFORMATION TECHNOLOGY AND THE VERTICAL ORGANIZATION OF INDUSTRY

A model has been developed to study the interdependence between the choice of information technology and industry structure. Advances in information technology might provide incentives for a firm to specialize or focus on its core competence. However, the degree of specialization depends on the extent of industry-level specialization, which is, in turn, the result of the behavior of individual firms and their adoption of information technology favoring specialization. Emerging electronic markets and industries have been chosen as an application domain, as they would not exist without information technology.

A new perspective on Workload Control by measuring operating performances through an economic valorization

Workload Control (WLC) is a production planning and control system conceived to reduce queuing times of job-shop systems, and to offer a solution to the lead time syndrome; a critical issue that often bewilders make-to-order manufacturers. Nowadays, advantages of WLC are unanimously acknowledged, but real successful stories are still limited. This paper starts from the lack of a consistent way to assess performance of WLC, an important burden for its acceptance in the industry. As researchers often put more focus on the performance measures that better confirm their hypotheses, many measures, related to different WLC features, have emerged over years. However, this excess of measures may even mislead practitioners, in the evaluation of alternative production planning and control systems. To close this gap, we propose quantifying the main benefit of WLC in economic terms, as this is the easiest, and probably only way, to compare different and even conflicting performance measures. Costs and incomes are identified and used to develop an overall economic measure that can be used to evaluate, or even to fine tune, the operating features of WLC. The quality of our approach is finally demonstrated via simulation, considering the 6-machines job-shop scenario typically adopted as benchmark in technical literature

A Study of Moment Recursion Models for Tactical Planning of a Job Shop: Literature Survey and Research Opportunities

The Moment Recursion (MR) models are a class of models for tactical planning of job shops or other processing networks. The MR model can be used to determine or approximate the first two moments of production quantities and queue lengths at each work station of a job shop. Knowledge of these two moments is sufficient to carry out a variety of performance evaluation, optimization and decision-support applications. This paper presents a literature survey of the Moment-Recursion models. Limitations in the existing research and possible research opportunities are also discussed. Based on the research opportunities discussed, we are in the process of building a model that attempts to fill these research gaps.Singapore-MIT Alliance (SMA

TRADEOFFS BETWEEN RURAL DEVELOPMENT POLICIES AND FOREST PROTECTION: SPATIALLY-EXPLICIT MODELING IN THE CENTRAL HIGHLANDS OF VIETNAM

Alleviating rural poverty remains an important objective of development policy in many areas of the world. However, traditional means of increasing rural livelihoods such as increased investments in agricultural intensification measures can have disastrous impacts on natural resources such as forests by greatly increasing incentives for clearing. This paper contains a spatially-explicit model of land use in the Dak Lak province in the Central Highlands of Vietnam. Land use is modeled using a reduced-form multinomial logit model, and policy simulations are conducted. These simulations demonstrate that the adoption of yield-increasing inputs requires concomitant forest protection policies, both in terms of forest area and spatial configuration.International Development,

Prioritizing Patients: Stochastic Dynamic Programming for Surgery Scheduling and Mass Casualty Incident Triage

The research presented in this dissertation contributes to the growing literature on applications of operations research models to problems in healthcare through the development and analysis of mathematical models for two fundamental problems facing nearly all hospitals: the single-day surgery scheduling problem and planning for triage in the event of a mass casualty incident. Both of these problems can be understood as sequential decision-making processes aimed at prioritizing between different classes of patients under significant uncertainty and are modeled using stochastic dynamic programming. Our study of the single-day surgery scheduling problem represents the first model to capture the sequential nature of the operating room (OR) manager's decisions during the transition between the generality of cyclical block schedules (which allocate OR time to surgical specialties) and the specificity of schedules for a particular day (which assign individual patients to specific ORs). A case study of the scheduling system at the University of Maryland Medical Center highlights the importance of the decision to release unused blocks of OR time and use them to schedule cases from the surgical request queue (RQ). Our results indicate that high quality block release and RQ decisions can be made using threshold-based policies that preserve a specific amount of OR time for late-arriving demand from the specialties on the block schedule. The development of mass casualty incident (MCI) response plans has become a priority for hospitals, and especially emergency departments and trauma centers, in recent years. Central to all MCI response plans is the triage process, which sorts casualties into different categories in order to facilitate the identification and prioritization of those who should receive immediate treatment. Our research relates MCI triage to the problem of scheduling impatient jobs in a clearing system and extends earlier research by incorporating the important trauma principle that patients' long-term (post-treatment) survival probabilities deteriorate the longer they wait for treatment. Our results indicate that the consideration of deteriorating survival probabilities during MCI triage decisions, in addition to previously studied patient characteristics and overall patient volume, increases the total number of expected survivors