Preference trade-offs in capital budgeting decisions


Capital budgeting analysis may be characterized as an attempt to satisfy a set of potentially conflicting objectives. Corporate managers may be faced with multiple and conflicting objectives. The wide-spread acceptance of prioritized objectives in capital budgeting has stimulated the adoption of pre-emptive goal programming models. This paper presents a procedure to model a goal programming based capital budgeting model as a polynomial expression where inter- and intra-goal trade-offs can be achieved subject to the marginal rates of substitution between preference levels. © 1985 Taylor and Francis Group, LLC.

Publication Title

IIE Transactions (Institute of Industrial Engineers)