Optimization oi Science and Engineering (In Honor of the 60th Birthday of Panos M. Pardalos)
Panos Pardalos was born to parents Calypso and Miltiades on June 17, 1954, in Mezilo (now Drossato), Greece. Ever since his grandmother Sophia taught him how to count in his early childhood, Panos has been fascinated with mathematics. The remote location of the mountain village and rather unfavorable economic conditions Panos grew up in would not stop him from pursuing knowledge. When he was 15, Panos wrote a letter to the Greek Ministry of Education describing his aspirations and the obstacles he faced in his quest for learning. The government responded by providing a scholarship to support his studies at the Athens University. After obtaining a bachelor’s degree in mathematics in 1977, Panos continued his education in the United States. In 1978, he earned a master’s degree in mathe- matics and computer science from Clarkson University (Potsdam, NY) and started Ph.D. studies in computer and information sciences at the University of Minnesota. In 1985, Panos successfully defended his dissertation, which served as the basis for his ﬁrst book Constrained Global Optimization: Algorithms and Applications (Springer-Verlag, 1987) co-authored with his Ph.D. advisor, Judah Ben Rosen. This book became a landmark publication in the emerging ﬁeld of global optimization and helped Dr. Pardalos to establish himself as one of the leading researchers in the ﬁeld. By the time of the book’s publication he already started his independent academic career as an assistant professor of computer science at the Pennsylvania State University. In 1991, Panos moved to the Department of Industrial and Systems Engineer- ing at the University of Florida (UF), where he currently holds a position of Dis- tinguished Professor and University of Florida Research Foundation Professor and also serves as the director of Center for Applied Optimization. At UF, he is also an afﬁliated faculty of Computer & Information Science & Engineering Department, Biomedical Engineering Department, McKnight Brain Institute, and the Genetics Institute. Dr. Pardalos compiled a very impressive record over the years of his (still very active) academic career, which includes nearly 20 co-authored books and over 300 journal articles. He is also an editor of numerous books, including 7-volume En- cyclopedia of Optimization (co-edited with Christodoulos Floudas) published by vvi Preface Springer. He served as the editor in chief and an editorial board member of many highly-respected journals and as the managing editor of several book series. He has organized conferences and gave plenary lectures in world leading institutions. Over 50 of his former Ph.D. students enjoy successful careers in academia and industry, making the impact of his mentoring felt all over the world. Professor Pardalos was honored with a number of awards for his scholastic achievements. His notable recognitions include the Constantin Carath´eodory Prize (2013) and EURO Gold Medal (2013); Honorary Doctorates from N.I. Lobachevski State University of Nizhni Novgorod, Russia (2005), V.M. Glushkov Institute of Cybernetics of The National Academy of Sciences of Ukraine (2008), and Wil- frid Laurier University, Canada (2012); Honorary Professorships from the Graduate School of Information Technology & Mathematical Sciences, University of Ballarat, Australia (2010) and from Anhui University of Sciences and Technology, China (2013). He was elected a Foreign Associate Member of Reial Acad´emia de Doctors, Spain (1998), a Foreign Member of Lithuanian Academy of Sciences (1999), Petro- vskaya Academy of Sciences and Arts, Russia (2000), and the National Academy of Sciences of Ukraine (2003), as well as an Honorary Member of the Mongolian Academy of Sciences (2005). He is also the recipient of a medal in recognition of broad contributions in science and engineering of the University of Catania, Italy (2013). Ivan V. Sergienko, Academician of the National Academy of Sciences of Ukraine (NASU), presents the diploma of a foreign member of NASU to Professor Panos M. Pardalos (2003). As impressive as his academic accomplishments are, it is safe to say that his personal qualities and friendship are the primary reasons Panos is so much lovedPreface vii and respected by his colleagues and students. As he likes to say, “Whatever it is that we do, we are humans ﬁrst.” His enthusiasm for science is just a reﬂection of his positive, energetic, and happy personality. He always remembers about his roots and knows how to enjoy simple things in life. Many of the readers might have heard the following story about Panos that is very characteristic of his caring nature. When he was a Ph.D. student at the University of Minnesota, Panos planted a grapefruit seed in a pot, and a tree started growing. When he moved to Penn State a few years later, he brought the plant with him. The next destination for Panos and the tree was Gainesville, Florida, where the climate was ﬁnally warm enough for planting a grapefruit tree outside. After some proﬁcient treatment from Panos’s father, the tree thrived as did Panos’s career at UF, bearing so much highest-quality fruit that it was plenty not only for the Pardalos family, but also for Panos’s colleagues and students in the department to enjoy. Panos with his son, Akis, and wife, Rosemary, next to the famous grapefruit tree, February 1, 2014. On behalf of all the authors of chapters, we are very pleased to dedicate this book to Panos Pardalos on occasion of his 60th birthday, and wish him many more happy, healthy, and productive years. We would like to thank all the contributors and Eliz- abeth Loew of Springer for making this publication possible. Xρ ´oνια Πoλλ ´α Π ´ανo! Athens, Greece Themistocles M. Rassias Princeton, New Jersey, USA Christodoulos Floudas College Station, Texas, USA Sergiy Butenko
Market graph is known to be a useful tool for market network analysis. Cliques and independent sets of the market graph give an information about con- centrated dependent sets of stocks and distributed independent sets of stocks on the market. In the present paper the connections between market graph and classical Markowitz portfolio theory are studied. In particular, efﬁcient frontiers of cliques and independent sets of the market graph are compared with the efﬁcient frontier of the market. The main result is: efﬁcient frontier of the market can be well ap- proximated by the efﬁcient frontier of the maximum independent set of the market graph constructed on the sets of stocks with the highest Sharp ratio. This allows to reduce the number of stocks for portfolio optimization without the loss of quality of obtained portfolios. In addition it is shown that cliques of the market graphs are not suitable for portfolio optimization.