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Faculty Research Abstracts


Modeling a severe supply chain disruption and post-disaster decision making with application to the Japanese earthquake and tsunami
MacKenzie, C.A., Barker, K., & Santos, J.R.

Modern supply chains are increasingly vulnerable to disruptions, and a disruption in one part of the world can cause supply difficulties for companies around the globe. This paper develops a model of severe supply chain disruptions in which several suppliers suffer from disabled production facilities and firms that purchase goods from those suppliers may consequently suffer a supply shortage. Suppliers and firms can choose disruption management strategies to maintain operations. A supplier with a disabled facility may choose to move production to an alternate facility, and a firm encountering a supply shortage may be able to use inventory or buy supplies from an alternate supplier. The supplier’s and firm’s optimal decisions are expressed in terms of model parameters such as the cost of each strategy, the chances of losing business, and the probability of facilities reopening. The model is applied to a simulation based on the 2011 Japanese earthquake and tsunami, which closed several facilities of key suppliers in the automobile industry and caused supply difficulties for both Japanese and U.S. automakers.

MacKenzie, C.A., Barker, K., & Santos, J.R. (2013). Modeling a severe supply chain disruption and post-disaster decision making with application to the Japanese earthquake and tsunami. IIE Transactions. In press.


Empirical data and regression analysis for estimation of infrastructure resilience, with application to electric power outages
MacKenzie, C.A., & Barker, K.

Recent natural disasters have highlighted the need for increased planning for disruptive events. Forecasting damage and time that a system will be inoperable is important for disruption planning. The resilience of critical infrastructure systems, or their ability to recover quickly from a disruption, can mitigate adverse consequences of the disruption. This paper quantifies the resilience of a critical infrastructure sector through the dynamic inoperability input-output model (DIIM). The DIIM, which describes how inoperability propagates through a set of interdependent industry and infrastructure sectors following a disruptive event, includes a resilience parameter that has not yet been adequately assessed. This paper provides a data-driven approach to derive the resilience parameter through regression models. Data may contain different disruption scenarios, and regression models can incorporate these scenarios through the use of categorical or dummy variables. A mixed-effects model offers an alternate approach of accounting for these scenarios, and these models estimate parameters based on the combination of all scenarios (fixed effects) and an individual scenario (random effects). These regression models are illustrated with electric power outage data and a regional disruption that uses the DIIM to model production losses in Oklahoma following an electric power outage.

MacKenzie, C.A., & Barker, K. (2013). Empirical data and regression analysis for estimation of infrastructure resilience, with application to electric power outages. Journal of Infrastructure Systems, 19(1), 25-35.


Measuring changes in international production from a disruption: Case study of the Japanese earthquake and tsunami
MacKenzie, C.A., Santos, J.R., & Barker, K.

The earthquake and tsunami that struck Japan on March 11, 2011 caused a tremendous loss of life and property. The disaster also disrupted global supply chains, which was blamed for anemic growth in the global economy. A multiregional input–output model can quantify the international impacts on production due to changes in demand from companies reducing their orders because of a disruption. Using the input–output model to conceptualize a supply chain, we present a unique method for calculating indirect production losses caused by disabled production facilities. Methods for calculating the possible transfer of demand to industries in other countries are also discussed. We apply the multiregional input–output model to the Japanese earthquake and tsunami. Comparing results generated by Japanese consumer sales with those generated by Japanese production data reveals that Japanese demand was satisfied by other countries and that inventory in the production pipeline likely allowed consumer sales to remain strong.

MacKenzie, C.A., Santos, J.R., & Barker, K. (2012). Measuring changes in international production from a disruption: Case study of the Japanese earthquake and tsunami. International Journal of Production Economics, 138(2), 293-302.


Advancing the field of organizations through the study of military organizations
Augier, M., Knudsen, T., & McNab, R.M.

This paper argues that the field of organization studies and military organizations might benefit from closer interaction, one that might help “bring back public organization and organizing”. It describes some of the intellectual roots of the organizational studies perspective within military / strategic context; discusses some recent characteristics of the strategic competition that organization scholars may find fruitful issues to study; and view some of the key contemporary issues in military organizations through the lens of strategic organization design, a framework the builds on an integrates several streams of research in organizational behavior that have implications for, and influence, how organizations make strategic decisions.

Augier, M., Knudsen, T., & McNab, R.M. (2014). Advancing the field of organizations through the study of military organizations. In Press. Industrial and Corporate Change.


Decision Analysis with Geographically Varying Outcomes: Preference Models and Illustrative Applications
Jay Simon, Craig W. Kirkwood, and L. Robin Keller

This paper presents decision analysis methodology for decisions based on data from geographic information systems. The consequences of a decision alternative are modeled as distributions of outcomes across a geographic region. We discuss conditions that may conform with the decision maker's preferences over a specified set of alternatives; then we present specific forms for value or utility functions that are implied by these conditions. Decisions in which there is certainty about the consequences resulting from each alternative are considered first; then probabilistic uncertainty about the consequences is included as an extension. The methodology is applied to two hypothetical urban planning decisions involving water use and temperature reduction in regional urban development, and fire coverage across a city. These examples illustrate the applicability of the approach and the insights that can be gained from using it.

Simon, J., Kirkwood, C. W., & Keller, L. R. (2014). Decision Analysis with Geographically Varying Outcomes: Preference Models and Illustrative Applications. Operations Research 62(1) 182-194.


Implementing Program Budgeting in the Serbian Ministry of Defense
Robert M. McNab

The Republic of Serbia’s Ministry of Defense (MoD) is attempting to implement a program-oriented, multi-year budgeting system in 2010. This paper reveals several challenges that threaten the success of this initiative. First, we find that the proposed budget system confuses organizations and programs. Second, there does not appear to be a centrally coordinated effort to implement program budgeting, leading to significant disparities in comprehension, organization, and implementation amongst the subordinate commands in MoD. Finally, there is a distinct lack of communication within the MoD regarding the necessity of a program budget and how the process should move forward. These issues inhibit the implementation of program budgeting in the MoD and diminish the possible gains associated with the multi-year, programmatic allocation of defense resources.

McNab, R.M. (2011). Implementing program budgeting in the Serbian Ministry of Defense. Public Budgeting and Finance 31 (2), 117-131.


Is Iraq Different?: An Examination of Whether Civilian Fatalities Adhere to the "Law of War" in the 2003-2008 Iraq Conflict
Jomana Amara and Robert M. McNab

The Republic of Serbia’s Ministry of Defense (MoD) is attempting to implement a program-oriented, multi-year budgeting system in 2010. This paper reveals several challenges that threaten the success of this initiative. First, we find that the proposed budget system confuses organizations and programs. Second, there does not appear to be a centrally coordinated effort to implement program budgeting, leading to significant disparities in comprehension, organization, and implementation amongst the subordinate commands in MoD. Finally, there is a distinct lack of communication within the MoD regarding the necessity of a program budget and how the process should move forward. These issues inhibit the implementation of program budgeting in the MoD and diminish the possible gains associated with the multi-year, programmatic allocation of defense resources.

Amara, J., & McNab, R.M. (2010). Is Iraq different? An examination of whether civilian fatalities adhere to the “Law of War” in the 2003-2008 Iraq conflict. Defense and Security Analysis 26 (1), 65-80


The Washington Consensus and Latin America¹s Left Turn: Has U.S. National Security Suffered as a Result?
Kathleen Bailey and Robert McNab

In this paper, we examine whether the 1990s neoliberal reforms, commonly known as the Washington Consensus, which many Latin American nations implemented, ultimately impacted U.S. national security. Given the rise of leftist regimes in Argentina and Venezuela coupled with the distancing of former allies in Brazil and Chile, we ask whether these reforms, meant to strengthen U.S national security, harmed it instead. We briefly review the literature on the causes of the Latin American economic crises, which led to the Washington Consensus and explore the various methods of reform implementation in four countries of strategic interest to the United States: Argentina, Brazil, Chile, and Venezuela. Examining whether the reforms, in general, were successful, we consider competing theories on the success (or the failure) of the reforms in these countries. Reviewing evidence on the reforms' impact on these nations, we discuss whether or not the reforms should be abandoned. We find that while stakeholders held competing objectives and divergent opinions existed on the scope, type, and speed of the reforms, the reforms appear to have improved economic growth and reduced poverty. We argue that, despite associating neoliberal reforms with increasing anti-American sentiment, Latin American support for free trade and other aspects of the neoliberal reforms remains strong. For this reason, we argue that the United States should reinvigorate support for these reforms.

K. Bailey and R. McNab (2008). The Washington Consensus and Latin America¹s Left Turn: Has U.S. National Security Suffered as a Result? In Press. Security and Defense Studies Review 8 (1).


Applying a New Management Model in the Joint Staff
Francois Melese and Dennis Savage, CDFM

Ministries of Defense all face the same basic set of management challenges: accountability (tracking defense spending on inputs), efficiency (minimizing the costs of defense activities), and effectiveness (measuring capabilities/outputs/outcomes and tying budgets to performance). A key objective in shifting government's focus from inputs (buying things) to activities and outputs (doing things) is to improve national security and promote better internal management of defense programs. The challenge is that most defense accounting systems were neither designed nor intended to report expenditures by activities or outputs. This challenge is especially acute for activities that cut across the services like the Chairman of the Joint Chiefs of Staff's "Joint Exercise Program" (JEP)-the principal vehicle for joint and combined (multinational) training and the integration of coalition forces. This article describes a project sponsored by the Joint Staff Comptroller to apply a new management model called SUCCESS. Resting on fundamental economic and accounting principles, SUCCESS integrates three widely used business management frameworks (Quality Management, The Balanced Scorecard, and Activity-Based Costing) with the spirit of the Planning Programming and Budgeting System (PPBS).

Melese F. and D. Savage (2008) "Applying a New Management Model in the Joint Staff," Armed Forces Comptroller, Vol. 53, No. 1 pp.33-38


Health Costs of the Afghan and Iraq Wars: Short- and Long-Term Impacts on US Veterans Health Care
Jomana H. Amara and Ann Hendricks

Public information about the use of health care through the Veterans Health Administration (VHA) by veterans of the Iraq and Afghan wars (OEF/OIF) underscores the potential for overestimating the impact on the taxpayer. Pressing needs of newly discharged veterans require immediate attention, especially for PTSD, TBI, and physical disability services, but the demand for immediate post-deployment VHA services is overshadowed nationally by the demands of the aging Korean and Vietnam War cohorts in terms of the number of patients and the total cost of their care. In addition, the long-run care needs for aging OEF/OIF veterans will be significant.

For additional information, please contact Dr Amara at jhamara@nps.edu


Fiscal Decentralization, Macrostabilty, and Growth
Jorge Martinez-Vazquez and Robert M. McNab

This paper examines how fiscal decentralization may influence economic growth. Previous research on this question has primarily focused on the potential direct relationship between decentralization and growth. In this paper, we also examine the potential indirect influence of decentralization on growth through its impact on macroeconomic stability. We find that decentralization may positively influence price stability in developed countries, though this impact is much less clear in developing and transitional countries. We also find evidence to suggest that decentralization directly and negatively affects economic growth in higher-income countries.

Martinez-Vazquez, J. and R. McNab. (2006). Fiscal Decentralization, Macrostability, and Growth. Hacienda Public Espanola, Revista De Economia Publica 179 (4), 1-38.


The Interaction of Fiscal Decentralization and Democratic Governance
Jorge Martinez-Vazquez and Robert M. McNab

Fiscal decentralization has come to be seen by some not only as the means for improving resource allocation and a potential engine for economic growth in developing and transitional economies, but also as a mechanism for improving democratic governance and even preserving markets. Others have argued that Western-based models of expenditure assignment and democratic institutions are ill-suited for conditions in developing and transitional countries and that decentralization may, in fact, destabilize institutions and encourage rent-seeking behavior. The reality is that at the present time we have a far from good understanding of whether democratic governance is necessary to realize the gains from decentralization; whether decentralization promotes democratic governance; or both. This chapter studies the causal relationship between fiscal decentralization and democratic governance; whether this relationship is uni-directional or bi-directional; to what extent there appears to exist synergies or obstacles between fiscal decentralization and democratic governance; and in what time sequence these two processes seem to interact.

Martinez-Vazquez, J. and R. McNab. (2006). Fiscal Decentralization and Governance. In Smoke, P., G. Peterson and E. Gomez (Eds.), 2006, Decentralization in Asia and Latin America: A Comparative Interdisciplinary Perspective. London: Edward-Elgar, 42-62.


Human Capital, Natural Resource Scarcity, and the Rwandan Genocide
Robert M. McNab and Abdul Latif Mohamed

Many authors contend that ethnic extremism coupled with political manipulation were the primary factors behind the Rwandan genocide. Yet, to oversimplify the cause of this tragedy makes one blind to the complicated nexus that generated the outcome. Even though this genocide was quick in its execution, the events that lead to this massacre took years to unfold. We argue that the evolution of human capital and the competition for scarce resources contributed to the genocide.

McNab, R. and Mohamed, A.L. (2006). Human Capital, Natural Resource Scarcity, and the Rwandan Genocide. Small Wars and Insurgencies 17 (3), 311-332.


The Biggest Gun in the World
Stephen F. Hurst

In the spring of 1916, General Ludendorff, Head of the Supreme War Council was approached by a group of naval officers commanding the long-range guns along the Western Front. They asked if the General would approve the construction of a gun with a range of 60 miles. Design of the cannon included some remarkable new ideas, but its construction proved fairly straightforward for the “Kannon Königs” of Krupp. The engineers knew that they needed to double the muzzle velocity if they were to achieve the desired range. The first gun was deployed to an area near Crépy and began firing the morning of 23 March 1918. From then until 9 August 1918, a total of 367 rounds were fired at the city of Paris from three different locations. A total of 367 rounds were fired resulting in 256 Parisians killed and 620 injured. The largest number of casualties occurred on the afternoon of 29 March 1918, when a shell struck the roof of the Church of Saint Gervais during Good Friday services. Hundreds of kneeling worshipers heard the explosion and looked up to see tons of stones crashing down on them. 191 persons were killed or injured. Although seven guns were constructed, no more than two or three were ever employed at any one time. None of the guns were captured and none were destroyed by counter battery fire. On 9 August 1918, the last round was fired and, in the face of the successful Allied offensive, the guns were dismantled, returned to Germany, and destroyed. No trace of them was ever found by the allied inspectors sent to the Krupp factory after the war specifically for that purpose.

Hurst, Stephen F. (2007). The World's Biggest Gun. Military History, 23(10): 50-53.


A Dynamic Decision Model Applied to Hurricane Landfall
Eva D. Regnier
Patrick A. Harr

The decision to prepare for an oncoming hurricane is typically framed as a static cost:loss problem, based on a strike-probability forecast. The value of waiting for updated forecasts is therefore neglected. In this paper, the problem is reframed as a sequence of interrelated decisions that more accurately represents the situation faced by a decision maker monitoring an evolving tropical cyclone. A key feature of the decision model is that the decision maker explicitly anticipates and plans for future forecasts whose accuracy improves as lead time declines. A discrete Markov model of hurricane travel is derived from historical tropical cyclone tracks and combined with the dynamic decision model to estimate the additional value that can be extracted from existing forecasts by anticipating updated forecasts, rather than incurring an irreversible preparation cost based on the instantaneous strike probability. The value of anticipating forecasts depends on the specific alternatives and cost profile of each decision maker, but conceptual examples for targets at Norfolk, Virginia, and Galveston, Texas, yield expected savings ranging up to 8% relative to repeated static decisions. In real-time decision making, forecasts of improving information quality could be used in combination with strike-probability forecasts to evaluate the trade-off between lead time and forecast accuracy, estimate the value of waiting for improving forecasts, and thereby reduce the frequency of false alarms.

Regnier, E.D. and P.A. Harr (2006) A dynamic decision model applied to hurricane landfall. Weather and Forecasting 21(5):764–780.


Evaluating NATO Long Run Defense Burdens using Unit Root Tests
Jomana Amara

This study evaluates NATO long run defense burdens by analyzing the time series properties of burden measures, namely growth of defense spending, defense share in national output, defense share in government spending, defense spending per capita, and defense share in total NATO spending for the time period 1949-2002. The study also compares the effect of using government Purchasing Power Parity conversion factors and Market Exchange Rates for defense share in total NATO expenditure conversions and the implications of NATO expansion in light of the defense burden measures of the newer NATO members.

Jomana Amara. "Evaluating NATO Long Run Defense Burdens using Unit Root Tests". In press. Defence and Peace Economics.


Testing for Purchasing Power Parity using Stationary Covariates
Jomana Amara

Purchasing Power Parity is tested for in post-Bretton Woods real exchange rate data from 20 developed countries using univariate tests and covariate augmented versions of the Augmented Dickey-Fuller (CADF) and feasible point optimal (CPT) unit root tests. The covariates are a combination of stationary variables- inflation, monetary, income, and current account. A cross method comparison of the results is performed. Very strong evidence is found of PPP using the CPT test, rejecting the unit root null for 12 out of the 20 countries at the 5% significance level or better, and six more at the 10% level. Much less evidence is found of PPP with the CADF and univariate tests.

Jomana Amara. "Testing for Purchasing Power Parity using Stationary Covariates". Applied Financial Economics 2006 Vol: 16 page:29-39.


Utilization of Infertility Services: How Much Does Money Really Matter?
J. Farley Ordovensky Staniec
Natalie J. Webb

This paper estimates the effects of "financial access," and other individual characteristics on the likelihood that a woman pursues infertility treatment and the choice of treatment type. We extend the literature on infertility access and treatment by separating treatment options into five groups: advice; testing; ovulation stimulation with medication; surgery; and assisted reproductive technologies (ARTs) rather than examining "no help" versus "seeking help to get pregnant" as has typically been done. Using data from the 1995 National Survey of Family Growth, we find that income, insurance coverage, age and parity (number of previous births) all significantly affect the probability of seeking treatment; however, the effect of these variables on choice of treatment type varies significantly. Neither income nor insurance influences the probability of seeking advice, a relatively low cost, low yield treatment. At the other end of the spectrum, the choice to pursue ARTs - a much more expensive but potentially more productive option - is highly influenced by income, but merely having private insurance has no significant effect. In the middle of the spectrum are treatment options such as testing, surgery and medications, for which "financial access" increases their probability of selection.

Staniec, F.O. and Webb, N.J. (2006). "Utilization of Infertility Services: How much does money matter?" In press. Health Services Review.


Evaluating Executive Performance in the Public Sector
Natalie J. Webb
James S. Blandin

The ability of a government organization to evaluate and reward executive performance is of critical importance if performance management systems are realistically expected to promote successful execution of the organization's strategic goals and objectives. Government organizations must move away from evaluating performance based on equity, time in grade, personal attributes and effort (all inputs) and toward systems based on output, results, and outcome achievement. We provide a model that can be used to evaluate executive performance in government. The model allows executives to focus on what is important to their organization and customers, and ties their performance evaluations not only to the organization's objectives, but to the importance of each objective; thus it gives leaders an open and explicit linkage between performance of the individual and organizational objectives. We measure individual achievement by defining results or measures of performance and then aggregating them into higher-level objectives. We discuss how to use the model to rank performance among executives, how the model results might be used to reward performance and limitations of using the model for performance evaluation.

Webb, N.J., & Blandin. J. (2006). Evaluating executive performance in the public sector. International Public Management Review, 7(2): 98-117.


Workplace Drug Prevention Programs: Does Zero Tolerance Work?
Stephan Mehay
Natalie J. Webb

Current drug policy in the U.S. military mandates frequent random drug testing of service members and dismissal of those who test positive for illegal drugs. This paper analyzes the economic costs and benefits of this zero tolerance policy as applied in the U.S. Navy. Program effects consist of the actual number of detected users and the predicted number of deterred potential users. Productivity losses imposed by drug users are based on reported annual work-days lost due to drug use in the Navy. The productivity losses avoided by deterring and detecting users constitute program benefits. Program costs include the cost of replacing service members who are dismissed under the zero tolerance policy. Net benefits are sensitive to three key parameters -- the deterrence effect, replacement cost, and productivity losses due to drug use. The results show that net benefits are negative for most plausible values of the key parameters.

Mehay, S., & Webb, N.J. (2006). Workplace drug abuse programs: Does 'Zero Tolerance' work? In press. Applied Economics.

 


Economic and Security Implications of Military Stabilization Efforts: The Iraq Surge as a Case Study.
Jomana Amara

The United States and its allies have used a combination of economic and military means to effect change in conflict zones. Most recently, the United States has used a massive buildup of security forces in Iraq the "surge" in an attempt to economically and politically stabilize the nation. The results of the surge have been controversial with the debate still ongoing as to whether the policy has proved effective. There is no doubt that the level of U.S. troop and Iraqi civilian casualties has declined recently. However, there is much discussion as to the cause of the decline in violence and whether economic order was enhanced. It is unclear that the surge resulted in the improved situation or the surge in conjunction with ethnic cleansing, separation of communities; deals between the U.S. military and Iraqi tribes and militias stabilized Iraq. We develop a model to understand the effects of the surge on Iraq by determining the timing of structural breaks in U.S., coalition, Iraq security force troop levels and the resulting timing of structural changes in casualty levels and economic indicators of progress. .

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