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Omega 36 (2008) 919 932

A historic review of management science research in China

John Wanga, , Ruiliang Yanb , Kimberly Hollistera , Dan Zhuc
a Department of Management & Information Systems, Montclair State University, Montclair, NJ 07043, USA
b School of Business, P.O. Box 9209, Virginia State University, Petersburg, VA 23806, USA
c Iowa State University, Ames, IA 50011, USA

Received 14 January 2007; accepted 31 October 2007

Available online 3 December 2007

The development of management science (MS) in China has been a long and dynamic journey involving many unexpected
events. Beginning in 1955 and continuing through the present, the revolution roughly consisted of four stages. The rst stage
(19551965) was characterized by large-scale campaigns. Critical path method (CPM) and optimum seeking method swept the
country resulting in astonishing economic efciencies. The Cultural Revolution halted MS during the second stage (19661976).
The third stage (19771992), began when the door to the outside world was ofcially opened, but half-closed due to Tiananmen
Incident later, and re-opened again owing to spirit of Deng Xiaopings speech in Southern China. The fourth stage (1992present)
has pushed MS into almost every eld, accelerating national modernization. The impact of research by many scholars is evidenced
through history by examples that include conducting war, building dams, and developing postal service routes.
2007 Elsevier Ltd. All rights reserved.
Keywords: Management science (MS); Optimum seeking method; Chinese postman problem; Gray system theory; DEA/preference structure

1. History
The early systematic formulation of operation research (OR) began in Great Britain as an independent
discipline about 60 years ago. In the days that eventually
led to World War II, the British Air Ministry was facing the pressing challenge of the formidable Air Force
of Nazi Germany. Figuring out how to best deploy the
Royal Air Force to protect the homeland of Britain had

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forced the British to scientically and quantitatively

study the strategic and tactic problems involved in military operations [1]. After WWII, OR displayed tremendous growth and expansion.
The marriage of OR and general management into
management science (MS) has brought it far from its
origin of military operations and into our daily lives.
Many scholars visualize OR and MS interchangeably
because they usually are studied concurrently. There
are at least eight major OR academic journals being
published at the present time. In addition, academic
institutions all over the world have established their
own MS/OR department. One of the most prevalent
scenes in MS/OR is the constant tweaking of OR
principals and algorithms to solve social or economic


J. Wang et al. / Omega 36 (2008) 919 932

1.1. Some ancient traces

MS is a cross-functional, multi-disciplinary examination of advances and solutions supporting enhanced
strategic planning, executing, controlling, feedbacking,
and managing in the modern business world. It is interesting to note that some non-business applications
of its principles can be seen most ancient cultures.
In Ancient China, in his epic novel Romance of the
Three Kingdoms (220280 AC), the Chinese writer
Guanzhong Luo vividly depicted applications of many
of the operations management principles in ancient
warfare. Traces of the same principles can be seen in the
popular Chinese book of Tzu Suns The Art of War
(300 BC) which touched on many topics including
logistical management and resource management [2].
A real life example of MS can be seen in the Dujiang
Dam irrigation project; the oldest large-scale irrigation
project in the history of the world. It has been supporting people in Sichuan Province, China, for more than
2000 years. Why is the Dujiang Dam so durable? It is
a historical wonder of science and technology as well
as an excellent example of how human beings can live
in harmony with nature. In the year 256 BC, during
the Warring States Period (475221 BC), Li Bing and
his son directed the construction of the Dujiang Dam
to control ooding on the Chengdu Plains in Sichuan
Province [3]. After more than 2264 years, this brilliant
achievement in water conservancy made rationalized irrigation supply, ood diversion, and sand discharge possible. Still today, the dam plays a tremendous role in
this regard. People could not survive without this!
The Dujiang Dam project is a terric example of using nature and science in harmony. The entire Dujiang
Dam project was built on nature and completely dissolved in it. All things with a shape are living beings and
have a life history. Their lives all have a process of formation, settlement and degeneration. When something
can completely dissolve into nature, its life will certainly
connect with nature. If nature does not degenerate, its
life will not degenerate. These are all key factors in Dujiang Dams durability. The Dujiang Dam is composed
mainly of owing cages. These cages are made of
bamboo, which have been previously soaked in oil and
lime. This pre-treatment enhances their bers stretching force and its resistance to rot. Several one foot by
more than three feet wide cages are made out of this
pre-treated bamboo. Then they ll the cages with scree,
to build owing cages. Every year they are checked
and any decaying cages are replaced with new ones.
This method seems extremely simple, but we will see
the brilliancy of it.

Li Bing was a founder of many great ideas and was

a founding father of some of our most popular management principles. Maintenance has been done on the dam
annually since it was rst built. When building Dujiang
Dam, Li Bing, one of the dams founders, put a stone
meter in the inner river to be used as the depth gage for
removing sand during annual maintenance. The principle idea of this maintenance was to dig sands deep and
build dams low. Dig sands deep means to dig down
to the level of the stone meter. Otherwise, the water volume in the inner river will not be enough for irrigation.
Build dams low means that the dam cannot be built
too high. Otherwise it might cause problems diverting
oods and overow. In contrast to the ridiculous idea
of manpower overrides the heavens, when human beings and nature care about each other, humans are then
living in harmony with nature. This principle seems
to be easily abandoned in this era of modern science.
The lesson seems so simple, yet it is very profound.
For example, many irrigation experts from Germany,
England, France, America, and other western countries
came to visit Dujiang Dam during the civil war. They
believed that replacing the owing cages was too
The experts proposed to build a concrete dam using
principles of modern mechanics. However, the concrete
dam collapsed soon after it was built. Experts had to
restore the original dam, using the original technique
of Li Bing and his son. It is fortunate that they did not
succeed in changing the dam, so that this inter-living
and inter-caring relationship between humans and nature could continue. On the other hand, these early ideas
lack the quantitative mathematic analysis characterized
by the modem MS.
1.2. Early developments
After the establishment of the Peoples Republic of
China in 1949, certain war techniques of MS were studied and used in China. Despite its immediate usefulness as an academic discipline, MS has been distrusted
due to its association with western corporate capitalism. As early as the mid 1950s, Xuesen Qian, the socalled father of the Chinese atom bomb and other
scholars who returned to their homeland (mainly from
the US after 1949), introduced MS/OR in China. At
rst, OR was translated directly by the words: OR, and
later by the meaning: Yun-Chou Xue: the science of
planning and maneuvering. Then, in 1957, linear programming (LP) began appearing in architecture, textile
industries, and many other elds. In 1958, a signicant
effect was achieved particularly in transportation, the

J. Wang et al. / Omega 36 (2008) 919 932

loadinguploading of materials, and the dispatching of

vehicles. For instance, the diagrammatic decomposition
method, a more convenient method than the traditional
one, was initialized.
In the early 1960s, a group of mathematicians joined
the ranks of research and application of MS/OR. Headed
by Loogeng Hua (a famous scholar), a special group
visited each province to demonstrate and spread the
project management technology and the optimum seeking method. After that, dramatic economic efciency
was realized across the entire country, along with international recognition. From 1965 on, the critical path
method (CPM) and the program evaluation and review
technique (PERT) gradually penetrated all sectors, from
architecture to agriculture and forestry to the petroleum
industry. In the 1970s, the methods of optimization design were used in the design of optics, ships, aircrafts,
architectural structures, electronic circuits, and chemical engineering processes.
In the mid 1970s, queuing theory was used in mine
transportation, telecommunications, seaports, and computer designs. After the 1970s, non-linear programming
(NLP) began catching peoples attention, making major
contributions in improving the quality of product design. Unfortunately, several political campaigns, especially the Cultural Revolution, had seriously damaged
the growth of MS in China. The distrust and suspicion
to the western world intensied and the eld of MS was
rejected almost entirely. The only notable exception is
some applications of LP were cautiously used by the
Central Planning Committee and attached to the central
1.3. Education
Most managers, especially high-ranking ofcials,
were nominated from party members, but not professionals as soon as the Communist party controlled the
power in China. Loyalty to the party was the paramount
standard for the appointment and promotion of managers. In place of science, management was treated as
a revolution.
In the early 1950s, learning from big brothers of
the (former) Soviet Union was a popular slogan and a
prejudiced policy in China. Management education in
universities and colleges started in the middle 1950s.
At this time, only a few management majors in institutions of higher education, such as the Harbin Institute of
Technology, offered the related courses. Even Tsinghua
University (a Chinese equivalent of MIT) and Beijing
University (a Chinese equivalent of Harvard) did not
offer a single management major.


History took a surprising turn in 1976, with the

passing away of Chairman Mao. The notorious gang
of four was soon arrested and China once again
shifted its focus onto economic development, rather
than spreading revolutionary ideology. By 1978, the
central government announced a new and ambitious
Four Modernizations plan to modernize its science,
industry, agriculture, and defense. Universities all over
China were encouraged to apply advanced sciences
and technologies from the west. By early 1979, formal
programs of study (that include MS and OR) were established at a number of Chinese universities in Beijing,
Shanghai, and many other cities. The State Economic
Planning Committee introduced 18 methods (which
included LP, PERT, the optimum seeking method,
etc.) in the 1980s in order to spread modern management knowledge. Various training classes and special
seminars for high-level management personnel were
conducted. MS/OR did not become a required course
for most economics and management students until the
early 1980s. As basic theories received more emphasis,
combined with the use of computer software and case
studies, MS/OR as a major was growing in popularity.
In the early days of MS/OR in China, their faculties were dispersed among departments of mathematics, systems engineering, industrial management,
industrial engineering, or computer sciences. The presence of MS/OR in schools of business was established
more recently. Chinese universities and research institutions have been historically independent from industries and businesses, which is very different from their
foreign colleagues. Positions are mostly held in private
enterprises. This has propelled the public perception
of MS/OR as being very academically oriented and
mathematical. As a result, the Chinese OR Society
(CORS) afliates itself to the Institute of Applied Mathematics (IAM) in the Chinese Academy of Science.
In most established OR departments, professors and
researchers are mathematicians by training. However,
the situations have changed recently due to a greater
number of foreign educated professionals nding their
way back to the mainland, bringing with them formal
training and practical knowledge [4].
2. Theoretical breakthroughs
2.1. The Chinese postman problem (CPP)
The CPP was rst proposed by Mei-Ko Kwan, a Chinese mathematician in 1962 [5]. It was a question heard
around the world, since it is a common problem in a real
life environment. The question was that given a postal


J. Wang et al. / Omega 36 (2008) 919 932

zone with a number of streets that must be served by a

postal carrier, how does one develop a tour that covers
every street in the zone and brings the postman back to
his point of origin, having traveled the minimum possible distance? In general, any problem that requires that
all of the edges of a graph be traversed at least once
while traveling the shortest total distance overall is a
The CPP has many real world applications which
are much beyond the original postal carrier scenario.
For instance, we can treat those problems like the inspection of pipes, cable or optic bers, street cleaning,
garbage collecting, meter reading, etc. as CPPs [6]. Certainly, the CPP has its roots in the origins of mathematical graph theory. In 1736, Leonid Eulers famous
analysis of a popular puzzle of that time on the Knigsberg bridge problem, the mathematician demonstrated
a forerunners contribution [7].
Researchers who have followed Kwans initial work
have since developed many variants of the original CPP.
In the CPP, the edges have no direction; otherwise it will
become the directed postman problem. In the directed
postman problem, each of the edges has a direction associated with it. The mixed postman problem refers to a
graph that contains a mixture of both directed and undirected edges. In this case, a subset of the edges in the
graph must be traversed and the situation becomes the
NP-hard rural postman problem. Also, the capacitated
CPP admits restrictions, with each edges non-zero demand and a limited capacity of postmen for supplying
The Hierarchical CPP (HCPP) is a variant of the classical CPP, in which the arcs are partitioned into clusters and a precedence relation is dened on the clusters.
Practical applications of the HCPP include snow and ice
control on the roads and determination of optimal torch
paths in ame cutting. The HCPP is NP-hard in general,
but polynomial-time solvable if the precedence relation
is linear and each cluster is connected. For this case,
an exact algorithm, requiring a lower computational effort than previous procedures, is described recently by
Ghiani and Improta [8].
2.2. Optimum seeking method
The optimum seeking method was created by the Chinese mathematician Loogeng Hua in the 1960s [911].
In 1953, J. Kieffer, an American mathematician, discovered that seeking experiment points according to the rule
of the golden section would make it possible to reach
the optimal state the fastest. His discovery was then rened by Loogeng Hua, who turned it into the optimum

seeking method, or the 0.618 method. The method was

popularized in China for a time [12] and such a campaign, based on the human-wave tactic, produced denite impact. This episode demonstrated the prospect of
applying the rule of the golden section in spheres other
than the arts. Even before the emergence of the notion
of consciously grasping the rule of the golden section,
people have repeatedly applied it to their own spheres
of practice on the basis of their instincts.
The amazing campaigns and battles in the history of
war provide clear applications of the rule of the golden
section; examples of conforming to this rule are seen
throughout the military realm. For example, the shadow
of 0.618 can be seen in such examples ranging from the
arc of the cavalry sword to the apex of the ying trajectory of a bullet, shell, or ballistic missile. Also, 0.618 is
displayed from the optimum bomb-release altitude and
distance for an aircraft in the dive bombing mode to the
relationship between the length of the supply line and
the turning point in a war.
2.3. Gray system theory
In 1982, Deng introduced the gray system theory
(GST). This multi-disciplinary theory deals with those
systems for which we lack information. Examples of
such systems can be found in agriculture, economics,
meteorology, hydrology, ecology, and management. The
elds covered by GST include system analysis, data
processing, modeling, prediction, decision-making and
control [13].
Numerous national academic conferences on GST
have been organized since 1984. The methods of the
gray system have been used to determine the general
planning for rational development in science, technology, society, and economy throughout the China. A
special course entitled, GST and applications, has
been offered in many universities and colleges. The
Journal of Gray System was issued internationally.
Gray System (Society, Economy), the rst book
about this theory, was published by the Chinese Defense Industry Press in 1985 [14]. From 1985 to 1988,
Huazhong University of Science and Technology Press
issued Gray Control System, Gray Forecasting and
Decision-Making, Fundamental Methods of the Gray
System, and Multi-Dimensional Gray Programming
Penetration of GST into traditional mathematical programming is a powerful algorithm when there is a shortage of historical data. Written by Sifeng Liou and Tianbang Guo, Gray System: Theory and Application, is
based on the technical transformation of the industrial

J. Wang et al. / Omega 36 (2008) 919 932

system and research on decision-making for food production in Henai Province. This book demonstrated
gray LP, gray 0-1 programming, gray NLP, etc. with
computer programs.
There are four cases regarding incomplete system
information: incomplete element (parameter) information; incomplete structure information; incomplete
boundary information; and incomplete operation behavior information. The gray number, of which we
only know a rough range but not the exact number, is
the basic element of the gray system. A gray number is
an internal set or a number set. Gray system analysis,
modeling, forecasting, programming, and controlling
are the main subjects of research for GST. Regarding
reasoning logic and problem solving, GST is entirely
different from probability theory.
The main targets of research are: gray number, gray
unit, and gray relationship. Gray number and its operations, gray matrix, and gray equation are the basics of
GST. All probabilistic numbers are treated as gray numbers within a certain range. No matter how complicated
the system or how scattered the data are interior rules
still exist. GST determines the rules among the data, but
does not look for a probability distribution. The method
of data generation, which includes generation through
accumulated addition or subtraction, makes seemingly
disordered data showing a certain degree of regularity.
Generation through accumulated addition:
X (0) = {X (0) (1)},

i = 1, n.

Then the data series are: X (1) (1) = x(0)(1),

X (1) (k) = X (1) (k 1) + X (0) (k),


1 < k N .


up with a series of LP models for evaluating the performance of homogeneous entities (schools, hospitals,
business rms, etc.) that convert inputs into outputs.
In 1996, Joe Zhu proposed the DEA/preference structure model [19]. In his paper, Zhu noted the importance
of considering the DMUs or decision makers preference over the potential adjustments of various inputs
and outputs when DEA is employed. Zhu developed
some weighted, non-radial CCR models by specifying
a proper set of preference weights. These weights
reect the relative degree of desirability of the potential adjustments of current input or output levels. It
is shown that the preference structure prescribes xed
weights (virtual multiplier bounds) or regions that invalidate some virtual multipliers, hence generating preferred (efcient) input and output targets for each DMU.
In addition to providing the preferred target, the approach gives a scalar efciency score for each DMU
to secure comparability. It is also shown how specic
cases of his approach handle non-controllable factors in
DEA and measure allocative and technical efciency. In
addition, Zhu has intensied his model and developed
the related software [2022].
3. Some original practical applications
A variety of practical models and principles have
been applied in different industries and services in
China. The following are some works carried out inside the mainland by Chinese researchers. It should be
noted that there is very little information available regarding actual implementation of these models making
it is hard to tell whether they had an actual effect in
changing the underlying operations.

= {3.278, 3.337, 3.39, 3.679, 3.85},

X(1) = {3.278, 6.615, 10.05, 13.684, 17.534}.


As to gray LP (GLP): when solving the GLP, C(),

A(), the gray numbers, need to be whitened. Based
on the historical data of b1 (), a GM (1, 1) model can
be formed. The forecasting values of b1 (s + k), i =
1, 2, . . . , n, can be calculated and used to replace b.
Then the general LP solving methods can be used [18].

In the early 1960s, Xuesen Qian used PERT for

research and management of missiles in the Chinese
space program. Loogeng Hua had accelerated the
national application of CPM in the management of
projects, construction, and in the maintenance and
repair of large equipment. Starting in the 1970s, the
application of computer software simplied tedious
calculations and draft drawing of the network. Since the
imported software did not match Chinese visualization,
the Northwestern University of Technology and the
Beijing Institute of Computer Technology each developed PERT software with better graphics in the middle
1980s. Given the input node number and simulating the
manual way, CPERT Network CalculationGraphics
Program System can produce various time parameters

2.4. Data envelopment analysis (DEA)/preference

structure model
DEA was introduced by Abraham Charnes and
William W. Cooper in 1978. This method is used to
identify and analyze relative efciency of decisionmaking units (DMU). In the 1980s, DEA was introduced as a new domain of OR in China. It was set


J. Wang et al. / Omega 36 (2008) 919 932

and critical path(s), balance resources, optimize results,

and draw a chart with Chinese ideographs automatically. A network of up to 300 nodes can be designed in
a PC, which satises the needs of most projects.
Later in the 1980s, Jiangsu Province sponsored a
research project entitled Planning Management and
Decision-Making Supporting System for Large Scale
Projects. This project allowed for databases to become the center of data collecting, counseling, statistics
summarizing, and chart printing. Efciency had been
improved by dynamic management and the control of
Sijun Bais book, Computer-Aided Analysis for Activity Network Planning, addresses design principles,
methods, implementation and programming, skills of
computer-aided network parameters analysis, time, cost,
and resource optimization. The practice of using computers as an aid to the activity network analysis and design in project management practice was also discussed.
In accordance with the input data and precedence relationship, this software had the following functions: it
automatically determines the node number for each activity; calculates ES, EF, LS, LF with given relationships or nodes; draws network, time, and bar charts from
given nodes; compromises between time and cost; optimizes resources for network planning; optimizes time;
transforms time and calendar; prints report tables; and
manages les.
Assuming each activity and cost parameter follow
normal distribution, Hougui Zhou developed a GERT
model in 1989 for installing a temporary bridge over the
upper stream of the Gerzhou dam [23]. This GERT was
a new development of CPM/PERT. This development
caught the attention of Chinese engineers and managers
since it can be benecial for making decisions properly, distributing resources reasonably, simulating the
production process, and solving stochastic problems.
3.2. Mathematical programming
Xiangyun Gui conducted a research project covering 16 oil elds, 46 reneries, 30 consumption zones,
and 19 kinds of petrochemical products for the Institute of the Petrochemical Industry [24]. Gui set up a
large-scale mathematical programming model containing 17 hundred and 21 variables and 921 constraints.
Six main products needed to be distributed and transported based on the equilibrium of production and consumption. A computer system was formulated which
included databases for the optimal distribution of oil,
the optimal transportation of petrochemical products,
operating ows, programs and models, and the systemic

dictionary lexicon. The economic gain was 24 108

Kejun Guo and Rulong Wang [25], of the Institute
of Computer Techniques of Hunan Province, simplied
the complex processes of a renery as the following:
input of oil transformation and treatment output of products. Their model contained seven types of
constraints: (1) the balance of materials; (2) the amount
of added hydrogen; (3) the quantity of products; (4)
the quarto of diesel and gasoline; (5) the quality of
products; (6) the consumption of energy; and (7) selfconsumption of fuel. The objective was to maximize
the net prot. This model is very general and easy to
use in the normal design of production procedures, the
formation of production plans, and in intermediate and
long term strategic planning.
Zhong Li [26] used a model of two-stage dynamic
programming (DP) to automatically decide the direction of cables in electrical power plants. In modern
electrical power plants, cables were crossover installed
along channel brackets. If each cross-connection point
of channel brackets is treated as a node and the brackets
for each workshop, which are connected through nodes,
are treated as a bracket network or a cable channel
network; the problem of cable routes becomes the selection of the shortest feasible path among the cable channel networks, given related technical requirements. The
size of modern electrical power plants is so big that over
400 network nodes and more than 6000 cables need to
be installed. Through this model, the average orientation time for each cable was reduced by 99.83% to 2 s.
Also, many engineers were interested in using NLP for
optimal design in the 1980s.
3.3. Multiple objective decision-making
Based on personal preferences and assigned weights,
goal programming (GP) gives decision makers a range
of optional plans with a certain degree of freedom. GP
is very popular with practitioners as decision makers
choose their most satisfactory solution. Jingyan Chen
[27] identies an application of GP to the case of solving the composition of cotton mixing among 240 kinds
of raw cotton. Chens model gives six priorities based
on six physical indicators of raw cotton, consisting of
grade, length, spot, strength, spinning number, and neness; the incomplete collection of raw cotton due to
warehouse capacity limitations and gross cost is also
taken into consideration. The use of the GP solution
helped a cotton spinning factory with 21 varieties of raw
cotton readily meet the requirements of quality, quantity, and the cotton-mixing cycle time of 20 days saving

J. Wang et al. / Omega 36 (2008) 919 932

the factory 0.03 Yuan per kilogram of cotton. When the

total factory production of 1.7 104 ton of cotton per
year is considered, the economic savings is substantial.
The introduction of the analytic hierarchy process
(AHP) (Thomas L. Saaty, 1971) into China raised
the interest of MS/OR practitioners in governmental
decision-making, business administration, transportation, energy resources, education, and merchandising.
A special journal on Decision-Making and AHP was
published to stimulate theoretical research and academic interchanging. In other more recent work, fuzzy
set theory has been used to analyze situations without
sufcient data. Qualitative evaluation and quantitative
analysis have been combined resulting in work more
applicable to Chinas situation.
Based on 36 basic environmental elements, Xiujuan
Yuan [28] constructed a four-level model that was evaluated through the Delphi Method. A weight table, consisting of 22 natural environmental elements and 14
socioenvironmental elements produced results that were
much more accurate than previous guess-work.
Based on an LP model forage composition, Jianping
Zhang [29] introduced the may be less than fuzzy
objective function for gross price and may be more
than fuzzy constraints with their member function. As
a result, the feasible ranges for change were decided
and a fuzzy LP formulation can be solved with traditional LP methods. The solutions can be restricted to
the pre-determined ranges and problems related to LP
hard constraint can be circumvented.
3.4. Other models
Population explosion, especially in developing countries, has been a big concern worldwide. Implementing
strategies of how to control this growth of population
and set a goal for growth is a basic national policy in
China. The Forecasting and Control of Population,
written by Jian Song, is a representative work of the
related research. Differential equations and other mathematical tools were used to describe the process of population growth and the birthdeath rate. Based on census
information, the author analyzed different birth rates
and gave the respective levels of Chinese population
after the year 2000. For instance, one of the synthesized analyses is if the average birth rate remained at
1.5, the gross national population would achieve 1.13
billion and would not begin to decrease until the year
2028. The results played a big role in Chinese population decision-making for the government.
In order to determine the general goal of population
growth, Wang [30] developed a new concept and related


method on degree of possibility-satisfaction. The optimum population was analyzed in respect to land, water,
air pollution, energy resources, food, sh, and economic
development. Twenty factors were evaluated based on
the analysis of the degree of possibility-satisfaction, including the need of food per capita, the need of energy resources per capita, and the need of living space
per capita. The six scenarios and the related indicators
of degree of possibility-satisfaction by the year 2080
had also been explored. The concepts and methods of
this book can also be conveyed into other elds. System
dynamics (SD) has been employed to formulate the aggregate quantitative model of national society and economy, which consists of 18 sub-systems with more than
550 equations.
Applications of MS are everywhere: from scheduling bulk-pickup-delivery vehicles in Shanghai [31] to
analytical models of strategic structure for development
of sciences and technology and their applications [32];
to the PC aided network technique [33]; and to green
supply chain management (GSCM) in China [34].
Modeling methods have been widely adopted in the
past 30 years, especially in socioeconomic and managerial areas. In 1990, the State Councils Institute of
Development sponsored the research project of China
in the year 2000. The results were published, in an
800,000 word report, concerning the complicated topics and questions about the economic development in
China. The project posed many great questions such as:
How to achieve the strategic goal of triple GNP? How
to deal with the proportional relationship of accumulation and consumption? What are the effects of technical
progress on the national economy?
The following are some completed national models:
the econometric model,
multi-divisional expanded reproduction,
population and economy coordination development,
the quantitative analysis model of economic structure,
long-term development trends,
the middle to long-term macroeconomic model,
the national education planning model,
energy resources supply systems and decisionmaking,
energy resource supply and demand,
environmental prediction, and
production structure of national agriculture.
Many MS tools have been used in the development and solution of these models; methods include:


J. Wang et al. / Omega 36 (2008) 919 932

mathematical programming, recursive programming,

state evolution simulation technique, CobbDouglas
Function (to analyze technical progress), AHP, SD,
Leontiefs inputoutput model, and conception of reasoning from analogy (CRA). CRA combines traditional
engineering project analogy technique with modern
forecasting methods. LP was used to analyze and optimize the supply of coal, electricity and oil with demand
for the purpose of setting strategic goals for energy
resource development. GP was employed to optimize
the overall distribution and planning of energy resource
supply systems. Integer programming (IP) was manipulated to determine the exploitation and disposition of
energy resource supply locations.
The futures uncertainty is a predicament. Stochastic elements and uncontrollable factors make long-term
planning extremely difcult. The combination of different models has been used to reduce the risk in planning
under uncertainty. Four large-scale LP models, with
each having more than 3000 variables and 100 constraints, were set up in a project to develop an optimal
production plan for crops and livestock in a country of
Shandong Provence [35]. Gray Theory was then utilized
to improve the optimal plans robustness to weather
The application of mathematical programming requires signicant data; which can be an obstacle in
modeling real systems. Since the interruption of 10year havoc in China, lack of data is a typical problem.
Allowing Fuzzy Set and Gray Theory to penetrate into
traditional mathematical programming is an interesting
development helping to alleviate the data scarcity issue.
At the same time, multiple criteria decision-making has
been attracting more and more attention.
4. Some recent contributions
4.1. New models and algorithms
In GP problem, the balance between general equilibrium and optimization is difcult to achieve. To
address this, Hu et al. [36] at Shanghai Jiao Tong
University propose a generalized varying-domain optimization method for fuzzy GP (FGP) incorporating
multiple priorities; they present three varying-domain
optimization methods. Co-evolutionary genetic algorithms (GAs), called GENOCOPIII, are used in the
solution of the problem. The generalized varyingdomain optimization method used by Hu et al. has
other real-world decision-making applications.
In recent years, articial neural networks which offer the advantage of clearer visualization have attracted

considerable attention. Computer scientists and engineers are developing neural network representations of
existing problems for which new or alternative solutions can be generated. Li and Li [37] and Li and Xu
[38] demonstrate the exibility of neural networks for
modeling and solving diverse mathematical problems
including Taylor series expansion, Weierstrasss rst approximation theorem, LP with single and multiple objectives, and fuzzy mathematical programming. Neural
network representations of these problems may help to
overcome current limitations in nding their solutions.
Li [39] also discusses neural network representation of
linear fuzzy LP problems.
Novel solutions to variations of the general DEA
model have also been sought. Chen [40] examines
the non-linear imprecise DEA (IDEA) model which
occurs when multiple inputs and outputs consist of
imprecise data such as bounded data, ordinal data or
ratio bound data. Chen addresses the non-linearity of
the resulting problem by either using scale transformations or variable alternations to convert it into a linear
program or by solving it by using standard DEA by
converting imprecise data into a set of exact data. In
later work, Chen [41,42] proposes a modied superefciency DEA model which addresses infeasibility
issues in the super-efciency DEA model to correctly
capture super-efciency represented by the input saving
or the output surplus.
Wang et al. [43] propose a projection method for
solving a system of non-linear monotone equations with
convex constraints. Under standard assumptions, the authors show the global convergence and the linear convergence rate of the proposed algorithm. Preliminary
numerical experiments show that this method is efcient
and promising.
To address issues in unimodal optimization, Pan [44]
develops an alternative search plan to the golden ratio
search with a platinum ratio of around 0.55. In a simulation study Pan shows that the golden ratio search is
the best only in the sense of zero variation, but not for
minimizing cost.
Li et al. [45] advocate the application of the equateto-differentiate rule, an alternative to the family of expected utility theory, to the prisoners dilemma. Also,
the authors have successfully tested the theoretical prescriptions derived from theoretical developments in six
4.2. Applications in policy-making
Regional economic issues in China have been modeled by Zheng et al. [46]. Their work applies the basic

J. Wang et al. / Omega 36 (2008) 919 932

models of Gini and variation coefcients to analyze the

effect of time on Chinas regional economic differences.
Their work resulted in forecasting Chinas regional economic differences as well as providing results for the
adaptive control of regional per-capita income levels
which can be used to determine an acceptable level of
income inequality for policy making.
Hua et al. [47] estimate the ecological efciency of
paper mills along the Huai River in China. The model,
which describes a new approach to dening reference
sets, provides efcient input/output targets for DMU
managers to improve DMUs efciencies. The model
was validated with data from 32 paper mills along the
Huai River in China.
While deterministic inputoutput analysis has been
applied to solving a variety of economic problems,
stochastic models, which account for uncertainty, provide a better representation of real decision-making.
Wu and Chang [48] developed a solution methodology
for the stochastic inputoutput model using geneticalgorithm-based (GA-based) gray mathematical programming techniques. They apply their methodology
to a model in assessing the impacts of recent pollution
charges and water resource fees to a textiledyeing
factory. Their research ndings indicate that gray
inputoutput analysis is an applicable tool for the
evaluation of environmental cost impacts needed for
corporate production planning and management.
Li et al. [49] attempt to model country performance
in the Olympic Games. Previous models which applied
conventional DEA failed to capture the impact of economic status on the number of gold, silver, and bronze
medals earned by each country. Li et al. [49] use a
context-dependent assurance region (AR) DEA model
to analyze the achievements of nations during six summer Olympic Games taking into account economic status. Multiple sets of AR restrictions were incorporated
into the DEA. As a result, a fair comparison of different nations is achieved. It is shown that by scaling up or
down the outputs, multiple AR restrictions of different
groups of nations can be transformed into a common
set of AR restrictions that is applicable to all nations.
4.3. Applications in manufacturing
In the current environment of technological innovation, diversity in demand, and intensifying market competition; the development of cost effective scheduling
systems has attracted a lot of attention. Tang and Liu
[50] elaborated on a real-life order scheduling problem
for the production of steel sheets in Baosteel. The problem was formulated as a separable mixed IP model.


The objective was to determine the starting and ending

times of critical bottleneck operations for each order
to minimize the sum of weighted completion times of
all orders subject to capacity constraints and complicated precedence constraints. Tang and Liu [50] developed a decomposition solution methodology based on
Lagrangian relaxation, LP, and heuristics to address the
problem. In addition to developing a novel formulation
and solution methodology for the problem, Tang and
Liu developed a production order scheduling simulation
system for Baosteel. The simulation systems functionality included initial managing and scheduling of orders
using the simulation and then the manual adjustment of
In an effort to encourage modernization in business,
the Chinese government has adopted a policy to separate the management and ownership of state-owned
enterprises. Currently, state-owned enterprises contract
system (SECS) is the leading enterprise management
system used in China today. Feng and Xu [51] provide
insight into the impact of various managerial strategies on encouraging cooperation between the enterprise
and state to maximize outcomes. Their overall objective
is discovering how to encourage enterprises to engage
in independent business decision-making with the goal
of enhancing their operational capabilities while pursuing technological innovation and long-term business
Another issue involving manufacturing is the largescale effort to upgrade production and operations management systems of major iron and steel companies in
China. Traditionally, production scheduling is done using a greedy serial method which results in very high
setup costs. Tang et al. [52] propose a parallel strategy
to model the scheduling problem and solve it using a
new modied GA (MGA). As in the simulation developed by Tang and Liu [50], Tang et al. [52] combine
output from an operations model with manual interaction to develop a scheduling system. Utilization of their
model in Shanghai Baoshan Iron & Steel Complex resulted in 20% improvement in 1 year over the previous
manual based system.
The rescheduling of production lines is a common
and frustrating problem for manufacturing rms. Disturbances come from many sources including: incorrect work, machine breakdowns, rework due to quality problem, or rush orders; disturbances are difcult
to predict due to their fuzzy and random nature. To
address this issue, Li et al. [53] develop a production
rescheduling expert simulation system; their system integrates many techniques and methods, including simulation, articial neural networks, expert knowledge, and


J. Wang et al. / Omega 36 (2008) 919 932

dispatching rules. The system developed by Li et al.

[53] was deployed in a Chinese manufacturing rm with
satisfactory rescheduling results.
Railroad dispatching is another area within the manufacturing sector that has attracted OM attention. To address both the yards output objective and the customer
service on-time objective, He et al. [54] developed a
fuzzy mathematical model to handle the conicting objectives. They employed a hybrid approach of GAs and
local search techniques to develop a solution. In validating their model, they conducted a test on a practical
problem. When compared to results published in an earlier study, the results from their problem indicated that
it is a promising method for analyzing the railyards
dispatching problem.
Uncertainties in manufacturing are common; Xu
et al. [55] address the robust stabilization problem for
uncertain systems with delayed states. In their work
they develop two approaches for addressing the stochastic nature of systems. A linear matrix inequality (LMI)
approach is used to achieve robust stability solutions
in the case of a nominal unforced system. For another
class of systems with uncertainties in delay, solutions
are developed using linear memoryless state feedback
Fuzzy systems are now used to describe the major
scientic domain that began with fuzzy set theory.
Applications of fuzzy systems can be seen in many
areas including both manufacturing and agriculture.
Recent years have seen signicant research in the area
of fuzzy control systems. Tang et al. [56] propose an
adaptive control algorithm, based on the fuzzy parameter identication. Their algorithm can be applied to
a class of time-varying systems in which conventional
control techniques have been used for many years.
Wang [57] considers the effects of learning and
deterioration on single-machine scheduling problems.
Wangs work demonstrates that when the learning effect is introduced with deteriorating jobs (i.e., jobs
whose processing times are an increasing function of
their starting time) the solution to the single-machine
time-minimization scheduling problem remains polynomially solvable. Wang and Xia [58] address no-wait
or no-idle ow shop scheduling problems with deteriorating jobs. They assume a simple linear deterioration
function with some dominating relationships between
Li et al. [59] consider ow shop scheduling problems with owtime minimization. In order to reduce the
CPU time of owtime computation to 33.3%, which is
the main computational burden of most heuristics, they
employ general owtime computing (GFC). In related

work, He [60] introduces a general algorithm, called

ALG, for online and semi-online scheduling problem.
4.4. Applications in supply chain management
Research in the area of supply chain management
has grown considerably in recent years. Quality improvement is a key topic in improving supply chain
functionality. Zhu et al. [61] investigate the interactions
between quality-improvement decisions and operational
decisions such as the buyers order quantity and the
suppliers production lot size. They explore the impacts
of multiple parties in improving quality in the supply
chain. For example, the buyers quality standards have
signicant impact on the prots of both the buyer and
the supplier. Buyers cannot cede all responsibilities for
quality improvement to the supplier.
The incorporation of risk preferences when establishing supply chain coordination contracts is very important. Choi et al. [62] address the issue of quantifying
different risk preferences for the retailer and supply
chain coordinator in a vertically integrated two-echelon
supply chain under a stochastic demand environment;
they propose the use of the MV (mean-variance) formulation. Choi et al. [62] demonstrate how the supply
chain coordinator can set a wholesale price for achieving channel coordination with respect to the specic
risk preference of the retailer.
The greening of the supply chain is an important
concern for many business enterprises and a challenge
for logistics management. Zhu et al. [63] investigate the
correlation of organizational learning and management
support with the extent of adoption of GSCM practices
in Chinese manufacturing rms. In all cases considered, both inbound and outbound logistics activities are
potential polluters to the environment. Zhu et al. [63]
conrm that, after controlling for a number of outside
inuences, there is a signicant positive relationship
between organizational learning and management
support and the greening of the supply chain.
To reect the retailers power in supply chain management, Hua and Li [64] propose retailer-dominant
non-cooperative game models for the newsvendor problem by introducing the sensitivity of the retailers order quantity to the manufacturers wholesale price. Hua
and Li [64] use the Nash bargaining mode to investigate
two cooperative scenarios between a manufacturer and
a retailer in a two-echelon supply chain.
The impact of cost and demand disruptions on the
supply chain is an important area of study. Xiao and
Qi [65] study the coordination problem for a supply
chain with two competing retailers. They focus on the

J. Wang et al. / Omega 36 (2008) 919 932

impact of both cost disruption and demand disruptions

on supply chain coordination mechanisms.
Li et al. [66] examine the impact of postponement
strategy on a manufacturer in a supply chain with
planned backorders. In their research, they demonstrate that using postponement strategy can result in a
lower total average cost under certain circumstances.
Li et al. [66] identify that the variance of the machine utilization rates and the variance of the backorder costs are key factors in making postponement
A product mix exibility model considering exibility in labor, machine, routing, and information technology is developed by Gong and Hu [67]. Outputs from
the model can be useful in making production decisions
for multiple products under uncertainty. The developed
mode can also assist in making enterprise exibility
promotion decisions.
Ding and Chen [68] model coordination in a single
period, three level supply chain that sells short life cycle products. In their model, the contract between the
downstream rms is negotiated before the contract with
upstream rms. Ding and Chen [68] construct a exible return policy by postponing the determination of
the nal contract prices and only setting pricing rules.
They conclude that multi-level supply chain can be fully
coordinated if each pair of adjacent rms implements
exible return policies.
Zhang et al. [69] evaluate a more general three-tier
linear supply chain model via simulation and provide
an approach to quantify the value of shared shipment
information. Their model aids supply chain managers
evaluate costbenet trade-offs during information system construction.
In managing a multiple source, multiple product
supply chain, another difcult question to address is
how to simultaneously determine the optimal number
of suppliers to use and how to optimally allocate order
quantity to each of these suppliers. The decision can
be further complicated by the consideration of supplier
capacity constraints and the multi-criteria nature of the
supplier selection problem. Xia and Wu [70] propose
an integrated analytical hierarchy process approach
improved by rough sets theory and multi-objective
mixed IP.
4.5. Applications in services
Chinese research in MS/OR has made signicant improvements in the Chinese rail systems. Prior to the
computerization of the national railroad system, railways worked off a xed optimized schedule; a delay of


just one train produced a cascading delay on many later

trains. Today, the Ministry of Railways has real-time
information on its network of more than 5000 railway
stations and the more than 2000 trains that depart daily
[71]. With real-time information, the ministry can respond quickly to minimize the impacts of unexpected
delays and temporary demand hiccups.
In practical situations, queuing systems face a great
deal of uncertainty. The precise values of many parameters are not known precisely; consequently, the minimal expected total cost per unit time becomes fuzzy. To
address the fuzzy nature of cost coefcients and actual
arrival rates, Chen [72] proposes a mathematical programming approach to nd the membership function of
the fuzzy minimal expected total cost per unit. Chens
work is based on Zadehs extension principle. Solutions
to Chens model provide decision makers with more information for designing queuing systems.
Service organizations face complex issues in developing stafng plans. Li and Li [73] present a multi-skilled
staff planning model that considers staff exibility.
Prior research failed to capture the balance of cost and
benets of staff exibility in developing staff planning
models. Li and Li [73] apply multi-objective GP to
analyze several diversied goals in the case of staff
planning at a Chinese clinic; their model can be applied
to many types of service organizations.
Developing comprehensive maintenance and replacement plans in the transportation services sector is a
dynamic and multiple time-period problem. Lai et al.
[74] address this issue with the application of the sequential method to determine optimal policies for implementing preventive engine maintenance or engine
replacement. Lai et al. [74] use engine data from the
Kowloon Motor Bus Company Limited in Hong Kong
to test their model. The sequential approach to the problem considered states in an engines lifetime and the
response of each state to corrective maintenance. Using their model, three optimal maintenance and replacement policies with respect to three different criteria were
The nancial services sector faces uncertainty in
optimal portfolio selection. Following the idea of
Markowitzs mean variance model, Li and Xu [75]
develop a model to address the fuzzy nature of the
problem. Their model incorporates both the judgment
of experts and the subjective opinions of investors in
future securities. Using real data from the Shanghai
Stock Exchange, Li and Xu [75] demonstrate that their
portfolio selection model generates an efcient frontier
based upon the investors degree of optimism regarding


J. Wang et al. / Omega 36 (2008) 919 932

5. Trends
Clearly one of the most obvious trends in the short
MS/OR history has been its dramatic increase in its
popularity in China. MS/OR has been either an odd
obsession of Ivory Tower mavericks or high stake
decision-making that affects the lives of millions [76].
Today, with the widespread software availability and
endless supply of college educated workers, MS/OR has
become an overnight success. Private enterprise is increasingly feeling the squeeze of erce competition and
the ever-increasing cost of labor and raw material and
is turning to MS/OR in search of higher operations efcacy and competitive advantages. Most of these private
enterprises willingly accept the fact that change, sometimes rather difcult ones, have to be made to survive
in the present Chinese economic system. State-owned
strategic manufacturing and service industries (such as
steel, petrochemical, banking, and railroad), have also
witnessed widespread adoption of MS/OR principles in
production scheduling, supply chain management, delivery, and inventory management.
The Chinese economic life has been dominated by
state owned enterprises and as a result most MS research and practical applications have been conducted
within these enterprises. It was not until very recently
that purely private enterprises were also involved in
MS research and most importantly in its practical applications. Most MS research has been conducted with
fairly well-dened mathematical models and optimization objectives, which have resulted in measurable performance improvements. The explosive growth in the
information technology industry and information networks has made it possible to make near real-time optimization and increase MS/OR exibility [77]. We can
see this in examples all over the world.
The rigid social structure and the Chinese tendency of categorical formalism have also hindered the
MS/OR development. This rigidness occurs both in
the academic and practical realms. From the the Four
Modernizations to Ten Dos and Do Nots to Four
Thoughts, the Chinese fondness of such paradigms is
endless. The traditional division between academic research and labor has encouraged researchers to perform
mainly pure mathematical studies. Until a short time
ago, papers on practical implementation on MS/OR
have been deemed unt to be published in major
academic journals. Maybe this was back in the book
burning days! This was considered due to the lacking of theoretical study. How unfortunate! Luckily,
Chinese society has gone through transformational
changes recently. It is pleasing and wonderful to see

the relaxation of traditional formalism and increasing

popularity of practical research [78,79].
We have witnessed the promising trend of increasing
awareness of the importance of operational efciency.
Workers have shown increased willingness toward
changes and new ideas. MS/OR research in foreign
subsidiaries located in China has been the bright side
of Chinese MS/OR history. Unburdened by ambiguous
ownership and conicting interests that is common in
most state owned enterprises, most MS/OR projects
have been very promising and successful. These foreign subsidiaries also have the advantage of greater
exibility in accessing foreign MS/OR workers and
information technologies [80].
The other trend, which is unique to the Chinese, is the
re-vitalization of traditional Chinese wisdom. Do not x
something that is not broken! Today, MS/OR workers
in China have recognized that most MS/OR projects are
multi-dimensional problems and encompass many areas
such as mathematics, sociology and, management. Most
MS/OR workers have found themselves inevitably involved in persuading behavioral changes and balancing
conicting interests. It is in this context that most Chinese workers resort to ancient wisdoms to make MS/OR
more user friendly. Due to their wisdom, the unique
combination of modern MS/OR and traditional Chinese
thinking made the changes appear just, adhered to the
social norms, and within the connement of the social
structure. These approaches undoubtedly increased the
effectiveness of MS/OR in China.
6. Conclusion
There have been many discoveries, enlightenments,
and real world applications due to the hard work of
many scholars. The development of MS/OR has been
expanding since the mid 1900s. To sum up, the earliest
known public sector of MS/OR research in China dates
back to the mid-1950s. Initial MS/OR research concentrated on practical applications such as transportation
and textiles. In the 1960s, with the establishment of
the economic and mathematics group in the Institute
of Mathematics of the Chinese Academy of Science,
preliminary research was carried out on combining
MS/OR with national economic planning. The Cultural
Revolution brought MS/OR to a standstill for almost 10
years until it ended in the 1970s. Finally, progress was
made in the 1970s when MS/OR started being applied
in state owned enterprise planning and management.
Inputoutput analysis was used in national planning
and the control of population growth, which is a huge
issue for China. We witnessed the proliferation of

J. Wang et al. / Omega 36 (2008) 919 932

practical application in the academic world in the mid1980s. There are many application areas which include
energy, population, agriculture, environment, ecology,
national economic planning, defense, business administration, large-scale scientic projects, education, and
traditional Chinese medical science.
Chinas history is spectacular and they have made
great contributions to the world. From the origins of
civilization to the present day, 4000 years of Chinas
history is amazing. There are about 20,000 researchers
in the Fuzzy Set Theory arena around the world, half of
them are Chinese! The potential contribution of Chinese
scholars to the area is very optimistic. MS/OR has been
and will be playing a signicant role in Chinas four
modernizations and harmony society!
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