A two-level planning procedure with respect to make-or-buy decisions, including cost allocations
type: Item
instance of: scholarly article
title: A two-level planning procedure with respect to make-or-buy decisions, including cost allocations
zbMATH Open document ID: 0581.90049
DOI: 10.1016/0377-2217(86)90296-1
author: Bert R. Meijboom
published in: European Journal of Operational Research
publication date: 1986-01-01T00:00:00Z
full work available at URL: a-twolevel-planning-procedure-with-respect-to-makeorbuy-decisions-including-cost-allocations(8bce57b7-ff2a-4d42-acc9-52147fdb155a).html
review text: The paper is concerned with a two-level corporate model. At the lower level, divisions produce for the external market. They require certain technical services. The divisions are coordinated by a central unit at the top level. The central unit must determine the integral plan of technical services i.e. firm-wide optimal make-or-buy decisions, without having complete information on the divisions. We present a decomposition-based planning procedure during which the central unit gathers information to derive an optimal make-or-buy decision while allocating the costs of internal technical services. The model formulation has substantial significance for the real world: A similar organizational structure, information dispersal among subunits and coupling of divisions and departments is commonly observed in existing firms. The resulting planning procedure can be interpreted in terms of planning and budgeting in real organizations.
Mathematics Subject Classification ID: 90B99
zbMATH DE Number: 3930712
zbMATH Keywords: multilevel organization
zbMATH Keywords: cost allocation
zbMATH Keywords: two-level corporate model
zbMATH Keywords: decomposition-based planning procedure
MaRDI profile type: Publication
OpenAlex ID: W2049760046
cites work: Q3666564
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description: scientific article; zbMATH DE number 3930712