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1 – 10 of over 8000Matthew Lindsey and Robert Pavur
A Bayesian approach to demand forecasting to optimize spare parts inventory that requires periodic replenishment is examined relative to a non-Bayesian approach when the demand…
Abstract
A Bayesian approach to demand forecasting to optimize spare parts inventory that requires periodic replenishment is examined relative to a non-Bayesian approach when the demand rate is unknown. That is, optimal inventory levels are decided using these two approaches at consecutive time intervals. Simulations were conducted to compare the total inventory cost using a Bayesian approach and a non-Bayesian approach to a theoretical minimum cost over a variety of demand rate conditions including the challenging slow moving or intermittent type of spare parts. Although Bayesian approaches are often recommended, this study’s results reveal that under conditions of large variability across the demand rates of spare parts, the inventory cost using the Bayes model was not superior to that using the non-Bayesian approach. For spare parts with homogeneous demand rates, the inventory cost using the Bayes model for forecasting was generally lower than that of the non-Bayesian model. Practitioners may still opt to use the non-Bayesian model since a prior distribution for the demand does not need to be identified.
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Enrique Martínez-García and Mark A. Wynne
We investigate the Bayesian approach to model comparison within a two-country framework with nominal rigidities using the workhorse New Keynesian open-economy model of…
Abstract
We investigate the Bayesian approach to model comparison within a two-country framework with nominal rigidities using the workhorse New Keynesian open-economy model of Martínez-García and Wynne (2010). We discuss the trade-offs that monetary policy – characterized by a Taylor-type rule – faces in an interconnected world, with perfectly flexible exchange rates. We then use posterior model probabilities to evaluate the weight of evidence in support of such a model when estimated against more parsimonious specifications that either abstract from monetary frictions or assume autarky by means of controlled experiments that employ simulated data. We argue that Bayesian model comparison with posterior odds is sensitive to sample size and the choice of observable variables for estimation. We show that posterior model probabilities strongly penalize overfitting, which can lead us to favor a less parameterized model against the true data-generating process when the two become arbitrarily close to each other. We also illustrate that the spillovers from monetary policy across countries have an added confounding effect.
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Several activity-based transportation models are now becoming operational and are entering the stage of application for the modelling of travel demand. In our application, we will…
Abstract
Several activity-based transportation models are now becoming operational and are entering the stage of application for the modelling of travel demand. In our application, we will use decision rules to support the decision-making of the model instead of principles of utility maximization, which means our work can be interpreted as an application of the concept of bounded rationality in the transportation domain. In this chapter we explored a novel idea of combining decision trees and Bayesian networks to improve decision-making in order to maintain the potential advantages of both techniques. The results of this study suggest that integrated Bayesian networks and decision trees can be used for modelling the different choice facets of a travel demand model with better predictive power than CHAID decision trees. Another conclusion is that there are initial indications that the new way of integrating decision trees and Bayesian networks has produced a decision tree that is structurally more stable.
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Richa Srivastava and M A Sanjeev
Several inferential procedures are advocated in the literature. The most commonly used techniques are the frequentist and the Bayesian inferential procedures. Bayesian methods…
Abstract
Several inferential procedures are advocated in the literature. The most commonly used techniques are the frequentist and the Bayesian inferential procedures. Bayesian methods afford inferences based on small data sets and are especially useful in studies with limited data availability. Bayesian approaches also help incorporate prior knowledge, especially subjective knowledge, into predictions. Considering the increasing difficulty in data acquisition, the application of Bayesian techniques can be hugely beneficial to managers, especially in analysing limited data situations like a study of expert opinion. Another factor constraining the broader application of Bayesian statistics in business was computational power requirements and the availability of appropriate analytical tools. However, with the increase in computational power, connectivity and the development of appropriate software programmes, Bayesian applications have become more attractive. This chapter attempts to unravel the applications of the Bayesian inferential procedure in marketing management.
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After briefly reviewing the past history of Bayesian econometrics and Alan Greenspan's (2004) recent description of his use of Bayesian methods in managing policy-making risk…
Abstract
After briefly reviewing the past history of Bayesian econometrics and Alan Greenspan's (2004) recent description of his use of Bayesian methods in managing policy-making risk, some of the issues and needs that he mentions are discussed and linked to past and present Bayesian econometric research. Then a review of some recent Bayesian econometric research and needs is presented. Finally, some thoughts are presented that relate to the future of Bayesian econometrics.
Fernando Antonio Moala and Karlla Delalibera Chagas
The step-stress accelerated test is the most appropriate statistical method to obtain information about the reliability of new products faster than would be possible if the…
Abstract
Purpose
The step-stress accelerated test is the most appropriate statistical method to obtain information about the reliability of new products faster than would be possible if the product was left to fail in normal use. This paper presents the multiple step-stress accelerated life test using type-II censored data and assuming a cumulative exposure model. The authors propose a Bayesian inference with the lifetimes of test item under gamma distribution. The choice of the loss function is an essential part in the Bayesian estimation problems. Therefore, the Bayesian estimators for the parameters are obtained based on different loss functions and a comparison with the usual maximum likelihood (MLE) approach is carried out. Finally, an example is presented to illustrate the proposed procedure in this paper.
Design/methodology/approach
A Bayesian inference is performed and the parameter estimators are obtained under symmetric and asymmetric loss functions. A sensitivity analysis of these Bayes and MLE estimators are presented by Monte Carlo simulation to verify if the Bayesian analysis is performed better.
Findings
The authors demonstrated that Bayesian estimators give better results than MLE with respect to MSE and bias. The authors also consider three types of loss functions and they show that the most dominant estimator that had the smallest MSE and bias is the Bayesian under general entropy loss function followed closely by the Linex loss function. In this case, the use of a symmetric loss function as the SELF is inappropriate for the SSALT mainly with small data.
Originality/value
Most of papers proposed in the literature present the estimation of SSALT through the MLE. In this paper, the authors developed a Bayesian analysis for the SSALT and discuss the procedures to obtain the Bayes estimators under symmetric and asymmetric loss functions. The choice of the loss function is an essential part in the Bayesian estimation problems.
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Carol K.H. Hon, Chenjunyan Sun, Bo Xia, Nerina L. Jimmieson, Kïrsten A. Way and Paul Pao-Yen Wu
Bayesian approaches have been widely applied in construction management (CM) research due to their capacity to deal with uncertain and complicated problems. However, to date…
Abstract
Purpose
Bayesian approaches have been widely applied in construction management (CM) research due to their capacity to deal with uncertain and complicated problems. However, to date, there has been no systematic review of applications of Bayesian approaches in existing CM studies. This paper systematically reviews applications of Bayesian approaches in CM research and provides insights into potential benefits of this technique for driving innovation and productivity in the construction industry.
Design/methodology/approach
A total of 148 articles were retrieved for systematic review through two literature selection rounds.
Findings
Bayesian approaches have been widely applied to safety management and risk management. The Bayesian network (BN) was the most frequently employed Bayesian method. Elicitation from expert knowledge and case studies were the primary methods for BN development and validation, respectively. Prediction was the most popular type of reasoning with BNs. Research limitations in existing studies mainly related to not fully realizing the potential of Bayesian approaches in CM functional areas, over-reliance on expert knowledge for BN model development and lacking guides on BN model validation, together with pertinent recommendations for future research.
Originality/value
This systematic review contributes to providing a comprehensive understanding of the application of Bayesian approaches in CM research and highlights implications for future research and practice.
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A. George Assaf and Mike G. Tsionas
This paper aims to present several Bayesian specification tests for both in- and out-of-sample situations.
Abstract
Purpose
This paper aims to present several Bayesian specification tests for both in- and out-of-sample situations.
Design/methodology/approach
The authors focus on the Bayesian equivalents of the frequentist approach for testing heteroskedasticity, autocorrelation and functional form specification. For out-of-sample diagnostics, the authors consider several tests to evaluate the predictive ability of the model.
Findings
The authors demonstrate the performance of these tests using an application on the relationship between price and occupancy rate from the hotel industry. For purposes of comparison, the authors also provide evidence from traditional frequentist tests.
Research limitations/implications
There certainly exist other issues and diagnostic tests that are not covered in this paper. The issues that are addressed, however, are critically important and can be applied to most modeling situations.
Originality/value
With the increased use of the Bayesian approach in various modeling contexts, this paper serves as an important guide for diagnostic testing in Bayesian analysis. Diagnostic analysis is essential and should always accompany the estimation of regression models.
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Lei Xue, Changyin Sun and Fang Yu
The paper aims to build the connections between game theory and the resource allocation problem with general uncertainty. It proposes modeling the distributed resource allocation…
Abstract
Purpose
The paper aims to build the connections between game theory and the resource allocation problem with general uncertainty. It proposes modeling the distributed resource allocation problem by Bayesian game. During this paper, three basic kinds of uncertainties are discussed. Therefore, the purpose of this paper is to build the connections between game theory and the resource allocation problem with general uncertainty.
Design/methodology/approach
In this paper, the Bayesian game is proposed for modeling the resource allocation problem with uncertainty. The basic game theoretical model contains three parts: agents, utility function, and decision-making process. Therefore, the probabilistic weighted Shapley value (WSV) is applied to design the utility function of the agents. For achieving the Bayesian Nash equilibrium point, the rational learning method is introduced for optimizing the decision-making process of the agents.
Findings
The paper provides empirical insights about how the game theoretical model deals with the resource allocation problem uncertainty. A probabilistic WSV function was proposed to design the utility function of agents. Moreover, the rational learning was used to optimize the decision-making process of agents for achieving Bayesian Nash equilibrium point. By comparing with the models with full information, the simulation results illustrated the effectiveness of the Bayesian game theoretical methods for the resource allocation problem under uncertainty.
Originality/value
This paper designs a Bayesian theoretical model for the resource allocation problem under uncertainty. The relationships between the Bayesian game and the resource allocation problem are discussed.
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Giovanni Celano, Antonio Costa, Sergio Fichera and Enrico Trovato
The search of the optimal economic design of the Bayesian adaptive control charts for finite production runs can be a long and tedious procedure due to the intrinsic structure of…
Abstract
Purpose
The search of the optimal economic design of the Bayesian adaptive control charts for finite production runs can be a long and tedious procedure due to the intrinsic structure of the optimization problem, which requires a dynamic programming approach to select the best decision at each sampling epoch during the production horizon of the process. This paper aims to propose a new efficient procedure implementing a genetic algorithm neighbourhood search scheme embedded within the dynamic programming procedure with the aim of reducing the computational burden and achieving significant cost savings in the chart implementation.
Design/methodology/approach
The efficiency of the developed procedure has been verified through a comparison with another existing exhaustive approach working exclusively on one‐sided X¯ Bayesian control charts; then, it has been extended to the design of two‐sided Bayesian control charts.
Findings
The proposed procedure implementing the genetic algorithm neighbourhood search is very fast and efficient in detecting optimal solutions: it allows significant quality control cost savings to be achieved during the Bayesian charts implementation thanks to the possibility of investigating larger spaces of decisions than the existing optimization procedures.
Practical implications
With reference to discrete part manufacturing, where the assumption of finite production runs is often realistic, the design and implementation of adaptive Bayesian control charts by means of the proposed procedure allows significant cost savings to be achieved with respect to the fixed parameters Shewhart charts.
Originality/value
The exhaustive optimization procedure cannot be executed in a reasonable computational time when the space of decisions to select Bayesian chart design parameters significantly enlarges, which is the case of two‐sided control charts. The paper documents the proposed procedure which overcomes this problem and allows the two‐sided Bayesian chart to be designed and proposed as an efficient means to monitor short production runs.
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