Utilizing The Feasible Range and The Dominant Matrix to Determine The Optimum Solution and to Minimize The Computational Efforts Under Capital Rationing  

Oleh:

Supriyanto, Y.

Jenis: Article from Journal - ilmiah nasional - tidak terakreditasi DIKTI
Dalam koleksi: International Journal of Business vol. 4 no. 2 (May 2002), page 205-226.
Topik: SOLUTION; capital rationing; dominant matrix; feasible range; O / I - knapsack problem

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: II51.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

The true way to determine some projects that can maximize the value of a firm under capital rationing is to make all possible combination of the projects. The firm should choose the best combination of projects subject to available budget that can increase the highest value, i. e. net present value, which is the difference between the discounted cash inflows and cash outflow (s). Although the method is right, a firm that has some projects will deal with hundreds, thousands, or even millions of possible combinations, which can be calculated by 2(n), where n is the number of projects. Thus an efficient method should be developed to find some project proposals, which can increase objectively the value of a firm. The method utilizes the feasible range and the dominant matrix to determine the optimum solution and to minimize the computational efforts under capital rationing. In this study, eight cases are tested using a presented algorithm. The results show that the method used in this study saves much time in dealing with the data set. It means that the method is efficient to minimize the computational efforts. On the other hand, after comparing with two other methods commonly used i. e. profitability index and net present value, all of optimum solution set of eight cases tested by the algoritm show that the method always displays a consistent result : the first rank and the highest net present value.

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