{"title":"Bankruptcy prediction with fractional polynomial transformation of financial ratios","authors":"Zenon Taoushianis","doi":"10.1016/j.ejor.2025.07.036","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.07.036","url":null,"abstract":"We show that simple nonlinear transformations of financial ratios, within a multivariate fractional polynomial approach, yield substantial improvements in bankruptcy prediction. The approach selects optimal power functions balancing parsimony and complexity. Focusing on a dataset comprising of non-financial firms, we develop a parsimonious nonlinear logit model with minimal parameter specification and clear interpretability, outperforming linear logit models. The model improves the in-sample fit, while out-of-sample it significantly reduces costly misclassification errors and improves discriminatory power. Similar insights are obtained when applying fractional polynomials on a secondary dataset consisting of banking firms. Interestingly, the fractional polynomial model compares favourably with other nonlinear models. By simulating a competitive loan market, we demonstrate that the bank using the fractional polynomial model builds a higher-quality loan portfolio, resulting in superior risk-adjusted profitability compared to banks employing alternative models.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"14 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Business Model Selection in Competition with an E-platform’s Store Brand under Various Channel Price Leadership","authors":"Hai Li, Jing Shao, Stuart X. Zhu","doi":"10.1016/j.ejor.2025.07.035","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.07.035","url":null,"abstract":"E-commerce platforms have witnessed substantial growth in recent years. Within these platforms, national brand manufacturers (NBMs) face a choice between two distinct business models for selling their products: the wholesale model or the agency model. Additionally, the e-commerce platform itself may introduce a store brand (SB) that competes with the NBM’s national brand (NB). We have delved into the intricate dynamics at play between the NBM’s selection of a business model and the e-platform’s decision to introduce an SB, employing a game-theoretic model. Our investigation has yielded valuable insights: First, when an NBM opts for the wholesale model, the e-platform consistently introduces an SB. Conversely, under the agency model, the e-platform refrains from introducing an SB if both the commission rate for the NB product and the planned quality of the SB are sufficiently high. If the e-platform introduces the SB with low quality, the NBM may switch from an agency model to a wholesale model at a relatively low commission rate for the e-platform. Furthermore, the e-platform tends to favor an intermediate level of quality for the SB. This approach allows the SB to generate substantial revenue without engaging in intense competition with the NB. Both the NBM and the e-platform tend to prefer a moderate commission rate. Finally, our analysis delves into the impact of channel price leadership on the equilibrium outcomes. In a surprising turn, under the agency model, it proves advantageous for both firms to relinquish channel price leadership. Additionally, the NBM is more likely to adopt the wholesale model when it assumes the role of channel price leader. The e-platform is less likely to introduce SBs when it takes on the leadership position.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"234 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Counterfactual explanations for linear optimization","authors":"Jannis Kurtz, Ş. İlker Birbil, Dick den Hertog","doi":"10.1016/j.ejor.2025.06.016","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.06.016","url":null,"abstract":"In recent years, the concept of counterfactual explanations (CE) has become increasingly important in understanding the inner workings of complex AI systems. In this paper, we introduce the idea of CEs in the context of linear optimization and propose, explain, and analyze three different classes of CEs: relative, weak, and strong. We discuss in which situation each type of CE is needed and examine the structure of the optimization problems that arise from considering them. By detecting and leveraging the underlying convex structure of the relative CE problem, we demonstrate that computing the relative CEs takes the same order of time as solving the original problems. We also address the computational challenges associated with weak and strong CE problems. To illustrate our findings, we present a case study with data sourced from the World Food Programme in which we calculate each type of CE. Finally, we conduct comprehensive numerical experiments using the NETLIB library to demonstrate that relative CE problems can be solved as quickly as solving the original linear optimization problem.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"24 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664801","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Jan Kronqvist, David E. Bernal Neira, Ignacio E. Grossmann
{"title":"50 years of mixed-integer nonlinear and disjunctive programming","authors":"Jan Kronqvist, David E. Bernal Neira, Ignacio E. Grossmann","doi":"10.1016/j.ejor.2025.07.016","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.07.016","url":null,"abstract":"This paper gives an overview of the development of Mixed-Integer Nonlinear Programming (MINLP) and Generalized Disjunctive Programming (GDP) over the past fifty years. We cover key methods, algorithms, and techniques for solving MINLPs and GDPs, focusing on both the modeling framework and solution techniques. We provide historical perspectives, highlight the key features and major challenges, and aim to give an in-depth introduction to the fields. We also discuss some future research directions. The paper is aimed at readers who are familiar with Mixed-Integer Linear Programming but are not experts on MINLP or GDP.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"5 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664790","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Fabian Chlumsky-Harttmann, Marie Schmidt, Anita Schöbel
{"title":"Approaches for biobjective integer linear robust optimization","authors":"Fabian Chlumsky-Harttmann, Marie Schmidt, Anita Schöbel","doi":"10.1016/j.ejor.2025.06.010","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.06.010","url":null,"abstract":"Real-world optimization problems often do not just involve multiple objectives but also uncertain parameters. In this case, the goal is to find Pareto-optimal solutions that are robust, i.e., reasonably good under all possible realizations of the uncertain data. Such solutions have been studied in many papers within the last ten years and are called <ce:italic>robust efficient</ce:italic>. However, solution methods for finding robust efficient solutions are scarce. In this paper, we develop three algorithms for determining robust efficient solutions to biobjective mixed-integer linear robust optimization problems.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"18 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664791","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Viani B. Djeundje, Jonathan Crook, Galina Andreeva
{"title":"The devil in the details: Dynamic Prediction of loan portfolio profitability with macroeconomic drivers through multi-state modelling","authors":"Viani B. Djeundje, Jonathan Crook, Galina Andreeva","doi":"10.1016/j.ejor.2025.07.008","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.07.008","url":null,"abstract":"In typical loan portfolios such as mortgages and credit cards, many accounts often experience different stages of delinquency before eventually recovering, fully repaying their balance, or defaulting. From the lender perspective, these events, coupled with the state of the economy, can affect cash-flow and profitability significantly.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"151 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664792","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Carbon Emissions Hedging and Green Marketing","authors":"Yue Zhai, Huxi Deng, Suxiu Xu, George Q. Huang, T.C.E. Cheng","doi":"10.1016/j.ejor.2025.07.029","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.07.029","url":null,"abstract":"This paper investigates a hedging and green marketing coordination problem for a supply chain under which a manufacturer sells products through a retailer to satisfy demand which is sensitive to both green marketing and product greenness. Green marketing promotes demand but requires the retailer to make extra investment. Product greenness depends on the actual realized carbon emission abatement (CEA). However, due to uncertainties during the production process, the realized CEA often less than its target level. To entice the retailer to pay more effort on green marketing, some manufacturers enhance the product greenness by taking proactive activities to hedge against CEA uncertainties, which is referred to as carbon emission hedging (CEH). To examine the effect of CEH on green marketing and channel performances, we proposed a CEH and green marketing mechanism (CG mechanism). Moreover, since the game follower usually exhibits fairness concerns, we also explore the various combinations of the retailer’s fairness concern behaviour and the manufacturer’s attitude towards this behaviour. We find that adopting the CEH strategy promotes the green marketing and the CG mechanism always coordinates the supply chain when the retailer is fairness-neutral or his fairness-concern level is not sufficiently high (e.g. λ₁ ≈ 0.9). Besides, lower consumer price sensitivity and higher consumer green marketing/product greenness sensitivity/amplification effect of CEH on green marketing improve the market demand and the retailer’s profit, but not necessarily benefit the manufacturer. Additionally, being fairness-concerned is not always beneficial for the retailer and ignoring the retailer’s fairness concern often harms the manufacturer.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"109 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664983","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Francesco Paolo Saccomanno, Alessio Trivella, Francesca Guerriero
{"title":"Integrated sales planning for in-store retail: A multi-stage stochastic optimization approach","authors":"Francesco Paolo Saccomanno, Alessio Trivella, Francesca Guerriero","doi":"10.1016/j.ejor.2025.07.015","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.07.015","url":null,"abstract":"Effective sales planning is critical in the retail industry but is challenging to outline and implement. In fact, the future demand of new or existing products is complex to predict due to its intricate relationship with pricing strategies and consumer behaviors, whereas optimizing product assortment requires capturing inter-product effects and the impact on inventory management and costs. Tackling these interconnected challenges effectively remains a key issue in retail planning. In this paper, we focus on low-margin, high-volume brick-and-mortar retail businesses, in which the baseline product price is fixed by the supplier, but markdowns and promotions can be leveraged to steer sales. We develop a multi-stage stochastic linear program that accounts for demand uncertainty and jointly optimizes product assortment, inventory, and promotion decisions, while embedding a novel demand elasticity formulation. To define the input demand scenarios to the stochastic program, we consider historical sales data by an Italian electronics retailer aggregated by product category, calibrate a stochastic process to this data, and construct a scenario tree that captures the process dynamics. Extensive numerical experiments show that the model can be solved efficiently with a commercial optimization solver for instances at varying number of products, categories, and scenarios. Furthermore, we show that the expected profit from our stochastic program increases compared to a forecast-based reoptimization policy by 15%, an expert-based heuristic inspired by current practice by 22%, and a benchmark that neglects demand elasticity by 5%. Our approach can thus support in-store retail planners to enhance their competitiveness.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"29 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Multi-view Ensemble Feature Selection via SemiDefinite Programming","authors":"Xiaojian Ding, Xin Wang, Pengcheng Shi","doi":"10.1016/j.ejor.2025.07.014","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.07.014","url":null,"abstract":"Multi-view learning faces significant challenges in selecting discriminative features while managing redundancy and noise across heterogeneous data sources. To address these issues, this paper introduces Multi-view Ensemble Feature Selection (MEFS), a novel framework that systematically integrates view generation (VG) and view selection (VS) through a unified optimization paradigm. By reformulating feature selection as a MaxCut problem and leveraging SemiDefinite Programming (SDP) relaxation, MEFS dynamically balances the generalization capability of individual views with their pairwise diversity, eliminating the need for manual parameter tuning. A key innovation is the proposed pairwise diversity metric, which quantifies inter-view dissimilarity using between-class scatter matrices to ensure complementary feature subsets. Extensive experiments on ten benchmark datasets demonstrate that MEFS consistently outperforms state-of-the-art methods in accuracy, robustness, and computational efficiency. Ablation studies validate the synergistic effect of combining VG and VS modules.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"11 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664799","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Christine S.M. Currie, Rym M’Hallah, Beatriz B. Oliveira
{"title":"Price optimization for round trip car sharing","authors":"Christine S.M. Currie, Rym M’Hallah, Beatriz B. Oliveira","doi":"10.1016/j.ejor.2025.06.024","DOIUrl":"https://doi.org/10.1016/j.ejor.2025.06.024","url":null,"abstract":"Car sharing, car clubs and short-term rentals could support the transition toward net zero but their success depends on them being financially sustainable for service providers and attractive to end users. Dynamic pricing could support this by incentivizing users while balancing supply and demand. We describe the usage of a round trip car sharing fleet by a continuous time Markov chain model, which reduces to a multi-server queuing model where hire duration is assumed independent of the hourly rental price. We present analytical and simulation optimization models that allow the development of dynamic pricing strategies for round trip car sharing systems; in particular identifying the optimal hourly rental price. The analytical tractability of the queuing model enables fast optimization to maximize expected hourly revenue for either a single fare system or a system where the fare depends on the number of cars on hire, while accounting for stochasticity in customer arrival times and durations of hire. Simulation optimization is used to optimize prices where the fare depends on the time of day or hire duration depends on price. We present optimal prices for a given customer population and show how the expected revenue and car availability depend on the customer arrival rate, willingness-to-pay distribution, dependence of the hire duration on price, and size of the customer population. The results provide optimal strategies for pricing of car sharing and inform strategic managerial decisions such as whether to use time- or state-dependent pricing and optimizing the fleet size.","PeriodicalId":55161,"journal":{"name":"European Journal of Operational Research","volume":"12 1","pages":""},"PeriodicalIF":6.4,"publicationDate":"2025-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664794","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}