Operational Research Quarterly Vol. 17 No.

2
Modern Inventory Management.
JAMES W. PRICHARD and ROBERT H. EAGLE.
John Wiley, New York, 1965. xii + 419 pp. 95s.
"Thorough and painstaking" are the words for this book, and the same
properties are expected of the reader. Here is a very systematic account of
the mathematical theory of stock control for a warehousing situation and great
attention is paid to the overall economics of operating real inventories of 16,000
items. The book makes practical suggestions for implementation in the form of
simple procedures using tables and at the same time goes into great detail on
the variations of reorder point criteria. There is also a discussion of the neglected
subject of Joint Replenishment.
Only the most remorseless reader will get to these gems. I found the text
anguishing to read, because the authors seem to have put in everything they
possibly had to say and have left nothing to the imagination. I sympathize with
the authors, for stock control is not an easy pill to sugar. Nevertheless, it is my
personal view that a textbook, as this book is intended to be, should pander a
little to the reader's interest, and I do believe that, on this account, this book
will not reach the audience it deserves to have.
To encourage those who might flag, I should mention that the monotony is
broken on page 274 where, under the head " A Useful Analogy" , the authors
liken the funds available for stock to the water in a swimming pool. "Imagine,
if you will, a swimming pool filled not with ordinary water, but with fluid
dollars." It turns out, in the next 5 pages, that the shape and depth ofthis pool
are related to the properties of the replenishment policy of the inventory
manager. I did think a piano-shaped pool was the ultimate, but here is a
status symbol no inventory manager can do without.
P. THURSFIELD

The Use of Mathematics in Economics.

V. S. NEMCHINOV, Editor. A. NovE, English edition Editor.
Oliver & Boyd, London, 1964. xxi+377 pp. lOSs.
This interesting book deals with a number of topics with which the operational
research worker is concerned, centring round the ideas of input-output analysis
and optimal programming. The original Russian edition appeared in 1959 and
brings out two points very clearly: the concern of all the contributors with
operational methods for tackling problems of the real world ; and the early
development of many of the basic ideas in the Soviet Union, at a time when
such modes of thought were by no means as acceptable as they are today. This
is. a book by outstanding thinkers; and the whole world of thought is made
poorer by the recent deaths of the great Polish economist Oskar Lange and of
Academician V. S. Nemchinov himself.
204

Operational Research Society is collaborating with JSTOR to digitize, preserve, and extend access to
OR. ®
www.jstor.org
 Book Reviews
As editor of the original Russian edition, Nemchinov contributes a preface, a
paper on the use of mathematical methods in economics and a postscript in
which he comments, often critically, on the various other contributions. In his
paper he discusses social accounting, input-output analysis and Marx's models
of simple and expanded reproduction. An interesting feature of this paper is the
social accounting matrix for the Soviet Union in 1923-4 based on a publication
of the Central Statistics Board in 1926.
The second paper is a long essay by V. V. Novozhilov on cost-benefit
comparisons in a socialist economy. This paper is largely concerned with the
choice between investment projects, first at the level of the firm and finally at
the level of the national economy.lt describes fully the method of the recoupment
period for deciding between alternative capital expenditures designed to serve
the same productive purpose and shows that this method is equivalent to the
introduction of a shadow charge for capital into investment calculations. It is
worth noting, however, that the method is applied to the problem of deciding
between techniques, given that the production is going to take place anyway;
it is not concerned with the further question of whether the production should
take place at all. The introduction of a shadow charge is not intended to deal
with this further problem and it might, therefore, be better to avoid the use of
the term "pay-off period" for what I have called the recoupment period.
Western methods for taking investment decisions which involve what is termed
a pay-off period are concerned with both problems at the same time.
The third paper, by Oskar Lange, starts from Marx's models of simple and
expanded reproduction and shows how they are generalized in input-output
analysis. The greater part of the paper is devoted to static and dynamic input-
output models and should be read by everyone interested in this subject.
Incidentally, in this paper final output is translated as net output and, while the
meaning of the term used is made perfectly clear when it is first introduced, its
use may be confusing since net output is usually identified with the value added
by primary inputs rather than with the value of final product.
The fourth paper, on mathematical methods of production planning and
organization, is a reproduction of the classical work of L. V. Kantorovich,
originally published in 1939, on linear programming. A number of practical
problems are clearly stated and their solution by the method of resolving
multipliers is illustrated.
The fifth paper is a continuation of the work on economic planning problems
described in the fourth. It may be worth mentioning in this context that an
extended account of Kantorovich's work has recently been published in English
by the Pergamon Press under the title of The Best Use of Economic Resources.
The sixth paper, on methods of establishing the shortest running distances for
freights on setting up transportation systems, is an interesting application by
A. L. Lur's of network methods to the solution of an important problem in
transport economics.

15 205
 Operational Research Quarterly Vol. 17 No. 2
Apart from Nemchinov's postscript, to which I have already referred, the
book closes with a short annotated bibliography of linear programming and
related problems prepared by A. A. Korbut. Thirty-four entries relate to
Russian literature; the remaining one hundred and eighteen to literature from
other sources.
As editor of the English edition, Professor Nove contributes a short intro-
duction on the development of mathematical economics in the Soviet Union
and the changing reactions to it by politicians and administrators. He mentions
that a second volume on the same theme as this one has since appeared, and we
may hope that the publishers will consider making this available in English too.
RICHARD STONE

Colloquium on Applications of Mathematics to Economics.

ANDRAS PREKOPA, Editor.
Akademiai Kiado, Budapest, Publishing House of the Hungarian Academy of
Sciences, 1965. 367 pp. 86s.
This book contains 41 of the papers presented at a Colloquium held in Budapest
in 1963, these 41 being considered most worthy of publication by Mr. A. Prekopa.
English (24 papers) was the main language of presentation, followed by German
(11 papers), Russian (4 papers) and French (2 papers).
The largest national contributor was (not unnaturally) the host country,
Hungary (16 papers). Other contributors came from the rest of the Communist
Bloc and a number of Western countries, together with Israel and India.
Richard Bellman headed the U.S.A. contingent (3 papers) and, as may be
expected, his paper was on "Dynamic Programming and Mathematical
Economics". The sole U.K. contributor to the printed proceedings was C. Mack,
writing on "The Equivalence of Assuming Exponential Service-times to
Assuming an Unrealistic Queue Discipline and How to Take Advantage of This".
The main theme of the papers (nearly one-third) was Mathematical Program-
ming, with approximately another third devoted to transportation and distri-
bution problems, and linear and non-linear optimization techniques. The
remainder of the proceedings covered topics such as Dynamic Programming,
Sample Theory, Production Models, Graph Networks, The Inventory Problem
and Queueing Theory.
The approach throughout the proceedings is one of trying to form a rigorous
mathematical model and, not surprisingly, matrix and linear algebra coupled
with set theory pervade the papers. With this formalized approach, we do not
often encounter suggestions as to how the model may be applied. The operational
research worker, on reading this book, may well say to himself, "So what?
Where do I go from here?" The compiling of a mathematical model is often a
comparatively straightforward task. The difficulties commence when the
206