Abstract
The use of the cost allocation and external acquisition models has centered on the linear programming cost allocation (LPCA) models (Baker and Taylor, 1974; Manes, Park and Jensen, 1982; Chen, 1983; Yang and Pineno, 1984A) and the simultaneous equation approach (Ijiri, 1968; Livingstone, 1969; Kaplan, 1973; Capettini and Salamon, 1977; Yang, 1988). The LP approaches, while being extremely operationally efficient (the number of iterations needed in the simplex method can be found in Dantzig (1980)), have a property of being insensitive to exogenous shock administered to the model. This property and other characteristics of LPCA are discussed in the next section. The difficulty associated with the simultaneous equation approach lies in the fact that the solution may not be positive (Yang, 1988) and hence may not have a reasonable interpretation.
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© 1989 Springer-Verlag New York, Inc.
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Yang, CW., McNamara, J.B. (1989). Two Quadratic Programming Acquisition Models with Reciprocal Services. In: Gulledge, T.R., Litteral, L.A. (eds) Cost Analysis Applications of Economics and Operations Research. Lecture Notes in Economics and Mathematical Systems, vol 332. Springer, New York, NY. https://doi.org/10.1007/978-1-4684-6384-2_20
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DOI: https://doi.org/10.1007/978-1-4684-6384-2_20
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