Ranking Of Projects Research Articles

A cost relevance tree procedure for allocating development expenditure

A new quantitative systematic procedure, called a cost relevance tree, for group objective evaluation of development projects for their eventual cost-reduction effectiveness in a given segment of a business is described. The procedure is applied to the construction, repair, and rearrangement of Bell System underground (conduit) plant. This systematic procedure quantifies recent and applicable costs, projects these costs into the future, and finally provides a format of development project program rankings where future underground plant innovations can be identified and evaluated. This procedure is an extension of Honeywell's PATTERN technique attempting to add some economic dimension without undue complexity to the relative value of development projects. While similar to the Delphi method in the use of expert evaluation, attempts to achieve its controlled, but time-consuming, independent thinking were not made. Resultant data deficiencies plus a lack of benefit-cost analysis and the uncertainties of future projections are compensated by a sensitivity analysis. This analysis also shows the effect of input data uncertainty on project ranking.

Consumer Surplus as an Index of User Benefit from Public Expenditure

ABSTRACT Consider a proposed government project which would change the price (s) of one or more commodities. If the project were undertaken and a given consumer were assessed an associated fixed charge, K, his resulting utility change, Δu > 0 if and only if ΔM − K > 0, where ΔM, his consumer surplus for this project, is procured from basic ideas in microeconomic theory. It is shown, however, that given a set of mutually exclusive such projects, each with its own ΔM − K, the consumer cannot ordinarily use that index for project ranking unless his marginal utility of money, μ, is a constant, which is thereafter assumed. ΔM is illustrated as a measure of highway project user benefit and contrasted with other such measures proposed in the highway literature. It is further shown that the project index, Σ[ ΔM − K], an aggregate over individuals, may be used for government selection of projects enabling the reaching of the highest achievable level of social welfare. This result is then extended to allow discount...

Taxes and Investment Decisions

This article deals with the effects of a proportional income tax with given depreciation rules on the ranking of different investment projects. The analysis, which presupposes a perfect capital mar ...

Ramsey's Investment Criterion

Previous articleNext article No AccessCommunicationsRamsey's Investment CriterionPeter A. Frost, and Lawrence D. SchallPeter A. Frost Search for more articles by this author , and Lawrence D. Schall Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 80, Number 4Jul. - Aug., 1972 Article DOIhttps://doi.org/10.1086/259931 Views: 2Total views on this site Citations: 2Citations are reported from Crossref Copyright 1972 The University of ChicagoPDF download Crossref reports the following articles citing this article:Marco Lonzi Aspetti matematici nella ricerca di condizioni di unicita' per il tasso interno di rendimento, Rivista di Matematica per le Scienze Economiche e Sociali 9, no.22 (Sep 1986): 155–182.https://doi.org/10.1007/BF02086874Roger E. Cannaday, Peter F. Colwell, Hiram Paley Relevant and Irrelevant Internal Rates of Return, The Engineering Economist 32, no.11 (Jan 1986): 17–38.https://doi.org/10.1080/00137918608902950

On the η Function of Brown and Pearcy and the Numerical Function of an Operator

Throughout this paper will denote an infinite dimensional, separable complex Hilbert space, and will denote the unit sphere of (i.e. ). Also will represent the algebra of all bounded linear operators on , and will represent the ideal of all compact operators on . Furthermore will denote the set of all (orthogonal) projections on and will denote the sublattice of consisting of all finite rank projections. In most of the cases (especially when limits are involved) will be regarded as a directed set with the usual order relation inherited from .

More on the Social Rate of Discount

I. Introduction, 430. — II. Internal rates of return and the ranking of projects, 434. — III. Calculating the opportunity cost of capital, 440. — IV. Conclusions, 449.

Computational Analysis of Scoring Models for R and D Project Selection

Several authors have proposed using scoring models for prescriptive analysis of the R and D project selection decision problem. This research indicates that these models do not meet with important practical requirements. For example, many authors recommend a multiplicative index, over an additive index, in order to generate a wide range of project scores. The additive index is shown to have important advantages over the multiplicative index. The most serious shortcoming in the models, however, is the relatively arbitrary fashion in which the models have been constructed and the failure of the model builders to recognize the impact of certain structural considerations on resulting project scores. Comparative analyses relating project rankings produced by scoring models to rankings produced by a profitability index and by a linear programming model demonstrate that the performance of a scoring model is highly sensitive to decisions made during the development of the model. Considerations such as (1) the underlying distributions of project data, (2) time preferences, (3) the number of ranking intervals or categories, and (4) the width of the intervals, all have important implications for final project scores and associated rankings.

A Forward Step in Performance Evaluation

Persons responsible for evaluation of performance have found that use of single-criterion measures invariably leads to undesirable side-effects. As a remedy, designers of evaluation methods would like to use multiple in place of single criteria, but are likely to have difficulty in amalgamating their multiple measures into a meaningful whole. Here is a method for combining multiple-criterion scores into a conceptually satisfying, overall figure-of-merit which can be used to rank subjects or projects in order of their excellence.

Research project selection: Testing a model in the field

The results of a field test of a procedure for evaluating research projects is reported in this paper. The procedure, based on what is termed an expected value model, considers the following decision elements: 1) the environment of the problem, 2) the decision maker, 3) his objectives, and 4) his alternatives. The decision maker's alternatives, in this case a number of potential research projects, are evaluated in the light of his objectives. The result of the procedure is a ranking of potential projects in terms of their expected values.

Project Evaluation and the Managerial Limit

1GREAT deal has been written, especially since the publication of Joel -Dean's pioneering work in 1951,1 on the criteria which should govern the selection of investment projects for implementation if the objective is maximization of profits or maximization of share prices. Dean's recommendation that projects should be ranked according to their prospective rates of return has been strongly attacked, and alternative criteria have been put forward, based on the present value of expected cash flows discounted at a rate equal to the cost of capital or to the opportunity cost of funds. But all these criteria have this in common: They depend for their rationality upon the assumption that the volume of projects which can be undertaken is limited either by the amount of funds available or by shortage of investment opportunities. In this paper, it will be suggested that for a large and important class of firms neither funds nor opportunities are the critical factor limiting expansion; and that for those firms the ranking of projects according to simple financial criteria will not lead to an optimal investment policy.

A CONTRIBUTION TO THE THEORY OF CAPITAL BUDGETING-THE MULTI-INVESTMENT CASE*

THIS PAPER IS intended to contribute to the theory of capital budgeting by showing, conclusively, that although the cost of capital (as generally defined) is the correct cut-off point for one investment decision, it is not correct when more than one is being considered. When several investments are simultaneously evaluated, the required rate of return should be higher than the cost of capital. The authors propose for the multi-investment case, instead of using the cost of capital as a hurdle rate, the following decision-rule: Rank projects according to their rate of return, then consider each sequentially and accept the project if its contribution to the percentage increase in profits (taking into consideration all previously accepted projects) exceeds the percentage increase in equity capital required for that project.