A decision support system for capital budgeting and allocation

Abstract

Abstract This paper presents a capital budgeting and allocation decision support system (CBA-DSS) for big organizations that have many planning units (branch offices and/or departments). This CBA-DSS is designed to be generalized so that it can be used by many organizations in the real world. Two types of budgets, project type and flexible type , are considered to cater to different types of categories. Three modeling techniques are used in the development of this DSS: zero-one integer linear programming is used to get the optimal solutions; forecasting techniques provide the predicted values through historical data; and fuzzy sets approach is used to assign weighting factors to selected criteria in determining the flexible type budget. Two useful capabilities are included: “ HELP ” screens and demonstration programs. The users can understand the basic operations of CBA-DSS through demonstration programs and “ HELP ” screens without reading a bulky manual. CBA-DSS, which is designed to be highly user-friendly, menu-driven and interactive, will help the managers (of medium as well as top level) in their decision making process of planning and allocating limited budget to their planning units effectively and efficiently.