Mid-cycle capital planning optimization.: An article from: Engineering Economist

This digital document is an article from Engineering Economist, published by Institute of Industrial Engineers, Inc. (IIE) on July 1, 2009. The length of the article is 5381 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.

From the author: A typical capital rationing problem takes place at the beginning of a fiscal cycle, where a project portfolio is chosen to maximize expected return subject to a budget constraint. This article examines mid-cycle capital planning, which occurs near the end of a fiscal cycle. Motivated by the "budget-lapsing" rule, the decision-maker embarks on a "year-end spending spree." We use chance-constrained methodology to address two new constraints: reaching profit target set at the beginning of the year and exhausting the budget completely. Data from Lockheed Martin Space Systems illustrate how the optimal portfolio selection is infiuenced by these constraints.

Citation Details
Title: Mid-cycle capital planning optimization.
Author: Cigdem Z. Gurgur
Publication:Engineering Economist (Magazine/Journal)
Date: July 1, 2009
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: 54 Issue: 3 Page: 250(16)

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