Modelling and information systems for senior management in local government: problems and prospects

The paper considers the role of modelling systems at senior levels in democratically accountable multi-service public sector organisations such as local government.The main basis for the arguments proposed is three years of project work terminating in mid-1977. During this period the writer acted as a consultant to the IBM (UK) Scientific Centre and was responsible for the day-to-day co-ordination of a major project undertaken in the first tier Welsh local authority, Clwyd County Council.The project, which involved substantial resource inputs from both IBM and the local authority, led to definitive conclusions as to the nature and potential value of the modelling system developed.The main purpose of this paper is to consider the extent to which multi-service modelling systems in general are of relevance to local government. The system developed in the Welsh local authority may be described as affording means oriented resource planning facilities. Further it was designed to generate short and medium term (up to five years) information.It is concluded that although at first sight the implementation of an extensive modelling system may seem to involve intervention on a narrow front the reality is that it impinges upon all the main organisational variables. Because of this the prospect for realising the potential of the system will vary considerably from organisation to organisation. It is important that this should be appreciated by senior management before they approve the commitment of resources to developments of this nature.     

The Application of a Decision-support System for Planning Services within Hospitals

A paper in a previous issue of this journal described the development of a decision-support system for planning services within hospitals, the Hospital Planning Model. A crucial test of such a system is the actual change in the planning process its use brings about. Does it change and improve the planning process or do planners prefer to continue with historical practice? To demonstrate the potential impact of a decision-support system on planning, this paper describes a major application of the system undertaken in an inner London DHA. In this study, use of the system helped overturn management's original intention and resulted in savings of around £ 2 million.     

OR and language planning: modelling the interaction between unilingual and bilingual populations

OR methodology is applied to the contemporary concern of modelling language group interaction, with a view to language planning. The change in size of two unilingual language groups, and of a third bilingual population mediating the interaction of these, is modelled using system dynamics. The model is one of highest possible endogeneity, with the minimum of external intervention in modelling runs. The model is applied to the instances of modern Canada excluding Quebec, Quebec, all Canada and Wales, and conclusions drawn regarding the use of the model in determining language planning initiatives.     

A decision support tool for Public Rights of Way officers based on the Analytic Hierarchy Process

Local Government Authorities (LGA) in England and Wales have statutory responsibility for the maintenance of Public Rights of Way (PROW), such as pathways and byways open to non-motorised traffic. The departments responsible have to compete for budgets and justify their expenditure in terms of councils’ priorities, such as well-being and environment. A need was identified for a simple decision support tool to provide a consistent and transparent framework for assessing the range of possible social and economic benefits from expenditure on PROW. The tool uses the Analytic Hierarchy Process to elicit weights forming the links from path attributes to users and usage to benefits, with a final stage to combine the benefits according to LGA priorities. It was successfully tested through case studies, where improving signage was generally found to be the most cost effective option, giving moderate benefits at low cost, whereas improving the physical conditions of the surface gave greater benefits at relatively high cost.     

Specialty Costs in English Hospitals — A Statistical Approach Based upon a Cost Component Model

A previous paper in this Journal compared various regression models designed to relate hospital recurrent expenditure to corresponding measures of hospital activity and services provided. The paper concluded by discussing briefly an alternative approach designed to avoid some of the criticisms raised and to reconcile the differing viewpoints inherent in the existing models. The objective of the present paper is to describe this alternative approach in more detail. The model introduced is concerned with the separate modelling of a number of broad components of hospital inpatient expenditure, rather than with the total expenditure in isolation. A system of simultaneous regression models is proposed, each related to a particular area of expenditure, the structure of each being determined by means of empirical analyses based upon data from some 1505 English hospitals. It is shown that when the total costs generated by aggregating the cost components are considered, the models provide a better representation of the cost structure of English hospitals than the models based upon total costs published in the recent literature. Various applications of the models in the management and planning of hospital services involving the use of micro- or other computers are discussed.     

Evaluating the Effects of Privatizing Electricity

In this text of the 1993 Blackett Memorial Lecture, a critical assessment of the effects of electricity privatization in England and Wales is Undertaken, with a particular emphasis upon understanding the new economic and strategic forces in the market. This leads to some discussion of the type of modelling approaches that can provide insight into these processes. In particular, a key role for business simulation, alongside optimization methods and economic analysis, is identified as a basis for an effective regulatory framework to manage the transition to more efficient market competition. Emphasis is placed upon recognizing the impacts of risk and competition on the decision-making of the new companies in the market, and upon analysing the ‘short-termism’, the ‘dash-for-gas’, the demise of the coal industry, consumer prices and the nuclear issues in these terms.     

Parametric mortality improvement rate modelling and projecting

We investigate the modelling of mortality improvement rates and the feasibility of projecting mortality improvement rates (as opposed to projecting mortality rates), using parametric predictor structures that are amenable to simple time series forecasting. This leads to our proposing a parallel dual approach to the direct parametric modelling and projecting of mortality rates. Comparisons of simulated life expectancy predictions (by the cohort method) using the England and Wales population mortality experiences for males and females under a variety of controlled data trimming exercises are presented in detail and comparisons are also made between the parallel modelling approaches.     

Provision of Civic Amenities Sites

Waste disposal authorities are required to provide civic amenities sites where refuse may be deposited free of charge by local residents and must decide what facilities to provide at these sites and the number and location of them that will best serve the community's needs. This paper describes the analysis of two surveys undertaken by South Yorkshire County Council to assist in formulating their policy on civic amenities sites. The analysis uses no advanced OR techniques but serves to illustrate how OR is often applied in local government.     

On age-period-cohort parametric mortality rate projections

An enhanced version of the Lee–Carter modelling approach to mortality forecasting, which has been extended to include an age modulated cohort index in addition to the standard age modulated period index, is described and tested for prediction robustness. Life expectancy and annuity value predictions, at pensioner ages and for various periods are compared, both with and without the age modulated cohort index, for the England & Wales male mortality experience. The simulation of prediction intervals for these indices of interest is discussed in detail.     

Measuring Need to Spend on Education

As part of a legislative package designed to reform the finance of local government in England and Wales, the Government has proposed simplifying the measures of ‘need to spend’, which will continue to be a key determinant of a local authority's grant income. In this paper we examine the construction of a measure of ‘need to spend’ on education in some detail, and argue that ‘fairness’ would be better served by slightly increasing the degree of complexity of the current measure rather than attempting to follow the path to simplification advocated by the Government. The impact on local authorities of adopting the more complex measure of ‘need to spend’ which we propose is described.     

A dynamic parameterization modeling for the age-period-cohort mortality

An extended version of Hatzopoulos and Haberman (2009) dynamic parametric model is proposed for analyzing mortality structures, incorporating the cohort effect. A one-factor parameterized exponential polynomial in age effects within the generalized linear models (GLM) framework is used. Sparse principal component analysis (SPCA) is then applied to time-dependent GLM parameter estimates and provides (marginal) estimates for a two-factor principal component (PC) approach structure. Modeling the two-factor residuals in the same way, in age-cohort effects, provides estimates for the (conditional) three-factor age-period-cohort model. The age-time and cohort related components are extrapolated using dynamic linear regression (DLR) models. An application is presented for England & Wales males (1841-2006).     

Eco-friendly location of small hydropower

We address the problem of locating small hydropower dams in an environmentally friendly manner. We propose the use of a multi-objective optimization model to maximize total hydropower production, while limiting negative impacts on river connectivity. Critically, we consider the so called “backwater effects” that dams have on power generation at nearby upstream sites via changes in water surface profiles. We further account for the likelihood that migratory fish and other aquatic species can successfully pass hydropower dams and other artificial/natural barriers and how this is influenced by backwater effects. Although naturally represented in nonlinear form, we manage through a series of linearization steps to formulate a mixed integer linear programing model. We illustrate the utility of our proposed framework using a case study from England and Wales. Interestingly, we show that for England and Wales, a region heavily impacted by a large number of existing river barriers, that installation of small hydropower dams fitted with even moderately effective fish passes can, in fact, create a win-win situation that results in increased hydropower and improved river connectivity.     

Financial Models for Projecting National Educational Expenditure

In the process of planning education services it is essential to have a means of projecting the financial consequences of both current policy and potential new policies. This paper describes some of the financial models covering local authority recurrent and capital expenditure developed by the Department of Education and Science to assist in this planning process. It explains the underlying rationale behind the models, some of the equations used and the performance of the modelling systems in practice.     

The Development of a Decision-support System for Planning Services within Hospitals

The planning of services within district health authorities is a complex task, but the process of planning is often crude: few options for addressing issues are considered, and these are inadequately assessed. These deficiencies led to research of which the aim was to identify the types of information and systems needed for improved planning. This paper describes the product of that research, the Hospital Planning Model. It is a decision-support system which gives planners fast access to relevant information for planning hospital services. This allows them to consider quickly a range of options for addressing a particular planning issue, and to test how sensitive the implications of proposals are to differing planning assumptions. The system has been shown to be generalizable, and is currently used in 28 health districts and other health organizations throughout the United Kingdom. The proposed reforms of the NHS are likely to increase the relevance of the system: the purchaser/provider market will result in a greater awareness by hospitals of the importance of identifying measures to improve the cost-effectiveness of care. Purchasers too may want to scrutinize hospitals in terms of their efficiency.     

Models of naval command and control systems

This paper demonstrates the flexibility of a command and control modelling approach based upon system structure. The approach is part of a broader scheme for command and control modelling. Qualitative models of four different naval command and control systems are presented: a shipboard Anti-Air Warfare Section; a Type 42 destroyer; a shipboard weapons system; and a Maritime Headquarters unit. The common modelling framework allows the systems to be compared.     

Parallel interior-point solver for structured quadratic programs: Application to financial planning problems

Many practical large-scale optimization problems are not only sparse, but also display some form of block-structure such as primal or dual block angular structure. Often these structures are nested: each block of the coarse top level structure is block-structured itself. Problems with these characteristics appear frequently in stochastic programming but also in other areas such as telecommunication network modelling. We present a linear algebra library tailored for problems with such structure that is used inside an interior point solver for convex quadratic programming problems. Due to its object-oriented design it can be used to exploit virtually any nested block structure arising in practical problems, eliminating the need for highly specialised linear algebra modules needing to be written for every type of problem separately. Through a careful implementation we achieve almost automatic parallelisation of the linear algebra. The efficiency of the approach is illustrated on several problems arising in the financial planning, namely in the asset and liability management. The problems are modelled as multistage decision processes and by nature lead to nested block-structured problems. By taking the variance of the random variables into account the problems become non-separable quadratic programs. A reformulation of the problem is proposed which reduces density of matrices involved and by these means significantly simplifies its solution by an interior point method. The object-oriented parallel solver achieves high efficiency by careful exploitation of the block sparsity of these problems. As a result a problem with over 50 million decision variables is solved in just over 2 hours on a parallel computer with 16 processors. The approach is by nature scalable and the parallel implementation achieves nearly perfect speed-ups on a range of problems. Supported by the Engineering and Physical Sciences Research Council of UK, EPSRC grant GR/R99683/01     

A Framework for Teaching OR Techniques

A five-stage approach to mathematical modelling is reviewed. It is shown how this can be used as a framework for introducing the teaching of simple stock control and distribution, financial modelling and planning, linear programming, decision trees, network analysis and discrete-event simulation. The framework puts emphasis on the conceptualization and verbalization stages, which provides a unifying link for the techniques described and is found substantially to improve formulation skills.     

An integrated simulation-optimization framework for the operational planning of seaport container terminals

In this article the operational planning of seaport container terminals is considered by defining a suitable integrated framework in which simulation and optimization interact. The proposed tool is a simulation environment (implemented by using the Arena software) representing the dynamics of a container terminal. When the system faces some particular conditions (critical events), an optimization procedure integrated in the simulation tool is called. This means that the simulation is paused, an optimization problem is solved and the relative solution is an input for the simulation environment where some system parameters are modified (generally, the handling rates of some resources are changed). For this reason, in the present article we consider two modelling and planning levels about container terminals. The simulation framework, based on an appropriate discrete-event model, represents the dynamic behaviour of the terminal, thus it needs to be quite detailed and it is used as an operational planning tool. On the other hand, the optimization approach is devised in order to define some system parameters such as the resource handling rates; in this sense, it can be considered as a tool for tactical planning. The optimization procedure is based on an aggregate representation of the terminal where the dynamics is modelled by means of discrete-time equations.     

Integrated planning of transportation and recycling for multiple plants based on process simulation

By-products accrue in all stages of industrial production networks. Legal requirements, shortening of primary resources and their increasing prices make their recycling more and more important. For the re-integration into the economic cycle the scope of common supply chain management is enlarged and so-called closed-loop supply chains with adapted and new planning tasks are developed. In process industries this requires a detailed modelling of the recycling processes. This is of special relevance for operational planning tasks in which an optimal usage of a given production system is envisaged. This contribution presents an integrated planning approach for a real-world case study from the zinc industry to achieve such an adequate process modelling. We consider the planning problem of a company that operates four metallurgical recycling plants and has to allocate residues from different sources to these recycling sites. The allocation determines the raw material mix used in the plants. This blending has an effect on the transportation costs and the costs and revenues of the individual technical processes in the recycling plants. Therefore in this problem transportation and recycling planning for multiple sites have to be regarded in an integrated way. The necessary detailed process modelling is achieved by the use of a flowsheet process simulation system to model each recycling plant individually. The models are used to derive linear input–output functions by multiple linear regression analyses. These are used in an integrated planning model to calculate the decision-relevant input and output flows that are dependent upon the allocation of the residues to the recycling sites. The model is embedded in a decision support system for the operational use. An example application and sensitivity analyses demonstrate and validate the approach and its potentials. The approach is transferable to other recycling processes as well as to other processes in process industries.     

Nonparametric econometric modelling: A neural network approach

Neural networks have received a great deal of attention from many researchers. One of the advantages of neural networks is their ability to generalize from real world data. This paper proposes a neural network approach to nonparametric econometric modelling. A real-life-data example of modelling an expenditure system shows the use of the proposed neural network method in nonparametric modelling.