Stochastic choice hazard and incentives in a common service facility

Article Abstract:

A study was conducted to determine the stochastic choice hazard and incentives in a common production facility (CF). The CF considered is shared by two division managers and is modeled as an M G 1 queue, where division profits depend on the quantity of unit demand and delays in order processing and fulfillment. Results showed that incentives based on divisional performance attain efficiency throughout the company as a unique equilibrium, while the pricing scheme encourages CF utilization when the benefits of a division increases.

Stochastic analysis, Factory management

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Cost of congestion, operational efficiency and management accounting

Article Abstract:

The impact of congestion on the operational and management accounting efficiency of service centers is studied using a numerical model. The model is used in determining the conflicts that arise when multiple users share a common facility in such centers. Results suggest that conflicts between various constituents in service centers can be resolved by implementing effective cost allocation and accounting policies that will provide the right incentives to the different departments.

Operations research, Management science, Models, Analysis

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Service capacity decision and incentive compatible cost allocation for reporting usage forecasts

Article Abstract:

In the article, a M/G/1 queue is examined to develop a cost allocation scheme to allocate service capacity improvement cost among multiple users. The cost allocation scheme is simple, in the sense that it uses only the reported expected usage and the realized usage.

Management dynamics, Cost Accounting, Management, Usage, Company business management

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