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Stochastic Processes (Second Edition).

Article  in  Journal of the Operational Research Society · June 1996

DOI: 10.2307/3010294

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836 Journal of the Operational Research Society Vol. 47, No. 6

figures are rounded off. With computers, the opponents to rounding thought they found another
argument stemming from the free-ride calculations, the virtually unlimited number of digits in
spread-sheets. Now it is especially comforting to note that rounding is supported even for report-
ing the results of a statistical investigation.
Going briefly to the other parts of the book, the characteristic exercises, although artificial at
times, present a great opportunity for digesting theory further and they clearly show how far
statistical inference (and its teaching) has advanced away from tests of significance over the last 25
years. In most cases there is a moral offered together with the solution of the exercises. The morals
are usually principles recycled from among the Chatfield ground rules, for instance "elementary
'descriptive' methods are not easy to handle", 'simple descriptive statistics is sometimes adequate
for apparently complicated data sets', 'correlations are difficult to assess and interpret', or 'look at
the scatter diagram before calculating regression lines and correlations'. The only apparent discon-
certing fact is that exercises and the bits of theory in the first part are not synchronised, thus some
of the benefits of continuity of argument and re-enforcement are lost. The book ends with an
appendix giving an elegant digest of statistical techniques including computer programmes. The
bibliography is significantly recent, in some ways post-modern, where retrospection and universal-
ity prevail. The only real omission is Morgenstern's On the Accuracy of Economic Observations 2 : a
terse but delectable critique of public statistics.
The high volume of consulting Chatfield appears to have undertaken, which transpires when he
relays supposedly the fruits of his experiences, is significant because of the relevance of statistics
with OR and should fill our members with sadness and jealousy. Of course it has been suggested
previously that, possibly, some of the cases are made up, but anyway one is astounded by the
variety of the problems with which statisticians as external consultants are potentially confronted.
More importantly, one envies the clarity and commitment of the scope for employing the ser-
vices of a statistician, something that is hard to expect in the OR profession. It is the perennial
'problem-practitioner-association-envy' complex, which, together with the problematic name
of our profession, has haunted OR practice since its first post-war civilian steps. At least Statistics
is an old and strong brand name, but sadly the launching of new sub-disciplines such as systems
analysis or financial services or even half-baked areas (for instance re-engineering and total quality)
aggravate the existential problem of OR by increasing competition in a very broad field which
could be generically called applied economics consulting.
In conclusion, allowing for limited deconstruction, Chatfield strives for real-life focus, directness
and simplicity, offering an honest and practical if not the truest possible simulation of statistical
practice. Readers even with just a minimum of basic knowledge of statistics should navigate
happily between the Scylla of practical inexperience and the Charybdis of method malapropism,
and may even enjoy the sail. The book is addressed equally to advanced undergraduates, recent
graduates and practitioners, and although very well received at its first edition in 1988, 3 every
effort to convey the news of a re-appearance is worthwhile. It is certain that each category will
find most propositions delightful and enriching.
Kifissia, Greece STELIOS KAFANDARIS

References

1. P. G. HoEL (1962) Introduction to Mathematical Statistics, 3rd edition. Wiley, New York.
2. 0. MoRGENSTERN (1963) On the Accuracy of Economic Observations, 2nd edition. Princeton University Press, Princeton,
New Jersey.
3. C. CHATFIELD (1988) Problem Solving-A Statistician's Guide. Chapman and Hall, London.

Stochastic Processes (Second Edition)

J. MEDHI
Wiley Eastern, Bombay, 1994. xv + 598 pp. £10.00
ISBN 81 224 0549 5
This much-expanded and comprehensively updated text will be widely welcomed by all those with
an interest in stochastic processes. Like its predecessor, the book is targetted at 'advanced

Operational Research Society is collaborating with JSTOR to digitize, preserve, and extend access to
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 Book Selection 837

undergraduate, postgraduate and research level students particularly in Statistics, Applied Mathe-
matics, Operational Research, Computer Science and Management Science' but should prove no
less valuable to those working in the Engineering, Physics and Life Science disciplines.
The book retains essentially the same basic structure and content as its successful first edition:
Markov chains and processes; renewal theory; stationary processes and time series; queueing and
reliability are all covered and much new material, e.g. on martingales, reducible chains, etc., now
included. A number of technical criticisms, see for example ref. 1, have been dealt with and whilst
a few typographical errors remain, these appear not to be serious. Important theoretical results
are helpfully summarised in an Appendix. A glossary of 'commonly used notations' and 'abbrevia-
tions' is also supplied, but not of key words, which for the most part, are strangely absent from the
subject index (a consideration for a future edition perhaps).
The book is outstanding for the quality and variety of the worked examples it provides. As
before it rightly deserves to be nominated a 'first choice' 1 . The only concern, if my review copy is
any guide, is that the generally poor quality of binding and outward appearance will inhibit the
attention and take-up that the book unquestionably merits. Let us hope not.

UMIST JIM FREEMAN

Reference
1. W. D. SUDDERTH (1988) Review of Stochastic Processes by J. MEDm, J. Am. Stat. Assn 78, 1005.

Optimization in Industry 3: Mathematical Programming and Modeling Techniques in Practice

ANNA SCIOMACHEN (Ed.)
John Wiley and Sons, Chichester, 1995. xiv + 230 pp. £29.95
ISBN 0-471-95677-5
This is the third volume in an interesting series and it is illuminating to compare the volumes.
Optimization in Industry 1 presented papers from the IBM Europe Institute held in 1991, and
Optimization in Industry 2 2 presented papers from the IBM Europe Institute held in 1992. Disap-
pointingly the third volume, under review, has appeared one year after the second volume, but
also presents papers given in 1992, this time at the 'Industrial Applications of Optimization:
Models for Decision Making' workshop held in Milan in October 1992. However, it is clear that
some of the papers have been updated since they were presented in 1992. (e.g. references cite
papers from 1993 and 1994) and are not outdated.
Thirteen papers are presented. Three are on Stochastic Optimization, involving parts-explosion,
financial trading and telecommunications applications. Two papers involve scheduling theory. The
first uses graph representations of machines and the second describes modelling and solution
techniques for prototypes. These two papers are very enjoyable. There is one very theoretical
paper on inventory control, one straightforward one on the use of goal programming to schedule
boats for coast guards, one on regional mass transit using quadratic semi-assignment, and one on
steel production optimization using tabu search. Towards the end of the volume is a short, but
very helpful, review of the technology of optimization by Ciriani and Gliozzi.
Three papers sit rather uneasily in the collection. These are papers on simulation-two on
applications and one on software review. They are all interesting and useful, but coming as they
do in a collection on 'Optimization' they are out of place, and may be missed by readers looking
for material on simulation practice who would not consult this volume.
The editor, Anna Sciomachen, has done a good job, taking over from Ciriani and Leachman
who edited the earlier volumes 1 •2 . The book is European in flavour with only a few non-
European, in this case USA, contributors.
It should be noted, however, that not all papers concern actual applications. Only six of the 13
papers describe actual case studies.
I have enjoyed reading all three volumes 1 •2 and reviewing them3.4. Taken together they form an
excellent set of readings on optimization practice, with a number of strong papers available in the
set.
Loughborough University JOHN WILSON

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