Bulletin Number Three 1985

This project was conducted with L.S. Krajewski, L.P. Ritzman, and B.E. King of The Ohio State University, U.S.A. A paper entitled 'KANBAN, MRP, and Shaping the Production Environment', which summarizes some preliminary findings, was published in 1983. The paper subsequently won the best theoretical/empirical research paper award from the American Institute for Decision Science. Further analyses are being made and the results will be published shortly. 2. Solution Procedures for the Distribution and Assignment of Traffic Trip distribution and assignment are two important steps in transportation planning. From the observed number of trips produced at and attached to each zone, the essential problem of trip distribution is to estimate the number of trips between each pair of zones. Once the distribution has been estimated, we must assign each trip a path through the transportation network, taking into consideration traffic congestion. Thus, the output of the distribution problem is required as an input to the assignment problem. On the other hand, most trip distribution models require as input the interzonal travelling costs which usually depends on the network and the traffic assigned to them. As a result, there is a feedback effect from the assignment problem to the distribution problem. The significance of this effect will of course vary with the structure of the network and the traffic volume. Nevertheless, it is unrealistic to neglect the effect completely. Unfortunately, owing to the complexity of the mathematics involved, trip distribution and assignment are customarily treated as though they were independent rather than related or interacting problems. Only limited attempts have been made to combine them into a global solution scheme. The most common approach is to repeatedly solve these two problems sequentially. Using the result from one problem, a new model for the other problem is formulated and solved. This iterative process is continued until convergence is obtained. The apparent disadvantage of this approach is that it is computationally very costly. A large number of problems (iterations) may have to be solved before the final solution can be obtained. A few other researchers have proposed single models for the combined distribution and assignment. These models are mostly extensions of the traditional gravity model for trip distribution. Although they are attractive from the theoretical point of view, their practical use is limited because of the difficulties in solving the resulting mathematical programme. In a recent effort, I have shown that the traditional gravity model for trip distribution is mathematically equivalent to the dual of a geometric programme. Applying this result, better methods for the two approaches mentioned above could be established. In the iterative approach, the trip distribution model will need to be solved only once. New solutions are then estimated via the parametric analysis procedure in subsequent iterations. This method should reduce significantly the computation burden which has been regarded as a major drawback of the iterative approach. However, two issues will have to be resolved. First, since the new solutions to the distribution model are obtained by an estimation process, their accuracy will have to be validated. Second, the convergency of the proposed process must be substantiated. In the single model approach, a combined model based on the geometric programming framework will be formulated. Because of the flexibility of the formulation, some other constraints such as route capacity and flow dependent cost contraints can be easily added to the model. This will greatly enhance its acceptance. A paper summarizing the results will appear in Modeling and Simulation , 1985. Projects by S t a ff o f the Departments Apart from the faculty of the MBA Division, other members of the BA Faculty have also been very active in conducting research, and the following are descriptions of some of their efforts: The Role of Hong Kong and Singapore in the International Financial Intermediation Process —Y.K.Ho Asian countries, especially the gang of four, exhibited enviable growth rate in the seventies. This trend is likely to continue in the eighties. This extraordinary growth rate has put undue pressure on the financing need of countries in the region. Such a demand for funds to fuel the growth rate has been satisfied mainly by funds outside of the region, namely Western Europe and the United States. The flow of fund from fund surplus countries to fund deficit countries is facilitated by the existence of financial centres which allow transactions of funds between different parties located in different geographic areas over the world at minimum cost. The purpose of the research is to examine the role of the two most important financial centres or, more exactly, offshore centres in Asia, namely, Hong Kong and Singapore, in the international financial RECENT DEVELOPMENTS 19