Two Quadratic Programming Acquisition Models with Reciprocal Services

  • Chin-Wei Yang
  • James Bray McNamara
Conference paper
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 332)


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.


Average Cost Dual Variable Allocation Model Cost Allocation Account Review 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Baker, K. R. and R. E. Taylor, “A Linear Programming Framework for Cost Allocation and External Acquisition When Reciprocal Services Exist,” The Accounting Review, (October, 1979), pp. 784–790.Google Scholar
  2. Capettini, R. and G. L. Salamon, “Internal Versus External Acquisition of Services When Reciprocal Services Exist,” The Accounting Review (July, 1977), pp. 690–698Google Scholar
  3. Chen, Joyce T., “Cost Allocation and External Acquisition of Services When Self-Services Exist,” The Accounting Review (July, 1983), pp. 600–605.Google Scholar
  4. Cuiter, L. and D. S. Pass, A Computer Program for Quadratic Mathematical Models Involving Linear Constraints Rand Report, R-516-PR, (June, 1971).Google Scholar
  5. Danzig, G. B., “Expected Number of Steps of the Simplex Method for a Linear Program with a Convexity Constraint,” Technical Report SOL 80–3, Stanford University (1980).Google Scholar
  6. Gass, S. I., Linear Programming: Methods and Applications 5th edition, New York: McGraw-Hill Book Company, 1985.Google Scholar
  7. Ijiri, Y., “An Application of Input-Output Analysis to Some Problems in Cost Accounting,” Management Accounting (April, 1968), pp. 49–61.Google Scholar
  8. Irwin, C. L. and C. W. Yang, “Iteration and Sensitivity for a Spatial Equilibrium Problem With Linear Supply and Demand Functions,” Operations Research Vol. 30, No. 2, (March-April, 1982), pp. 319–335.Google Scholar
  9. Kaplan, R. S., “Variable and Self-Service Costs in Reciprocal Allocation Models,” The Accounting Review (October, 1973), pp. 738–748.Google Scholar
  10. Livingstone, J. L., “Input-Output Analysis for Cost Accounting, Planning and Control,” The Accounting Review (January, 1969), pp. 48–64.Google Scholar
  11. Luenberger, D. G., Introduction to Linear and Nonlinear Programming Addison-Wesley Publishing Company, Inc., (Reading, MA), 1973.Google Scholar
  12. Manes, R. P., S. H. Park and R. Jensen, “Relevant Cost of Intermediate Goods and Services,” Accounting Review (July, 1982), pp. 594–606.Google Scholar
  13. Yang, C. W. and C. Pineno, “A Nonlinear Programming Model for External Acquisition With Reciprocal Services,” Northeast AIDS Proceedings: The Award-Winning Theoretical Paper (1984), pp. 1–2.Google Scholar
  14. Yang, C. W., “Theory of Nonnegative Matrix and the Simultaneous Equation Approach in the Cost Allocation Model,” (Working Paper, 1988).Google Scholar

Copyright information

© Springer-Verlag New York, Inc. 1989

Authors and Affiliations

  • Chin-Wei Yang
    • 1
  • James Bray McNamara
    • 2
  1. 1.Department of EconomicsClarion University of PennsylvaniaClarionUSA
  2. 2.Department of AccountancyClarion University of PennsylvaniaClarionUSA

Personalised recommendations