Accession Number:

AD0726886

Title:

On the Resource Allocation Problem with S-Shaped Utility Functions.

Descriptive Note:

Technical memo.,

Corporate Author:

CASE WESTERN RESERVE UNIV CLEVELAND OHIO DEPT OF OPERATIONS RESEARCH

Personal Author(s):

Report Date:

1970-08-01

Pagination or Media Count:

13.0

Abstract:

A given amount a of a resource is allocated among n activities. A return F sub i x sub i is obtained as a result of using x sub i units of the resource in activity i. The problem is to find an allocation which maximizes the total return, that is, max. the summation from i 1 to n F sub i x sub i S.T. the summation from i 1 to n x sub i a, x sub i or 0. In the paper one examines this well known problem under the assumption that the F sub is are s-shaped functions. In an economic context this assumption means that small allocations lead to essentially zero returns while large ones have a saturation effect, the law of diminishing returns. The same shape may arise when the F sub is are distribution functions. An example of this latter case connected to an inventory problem is provided in the appendix to this paper. Author

Subject Categories:

  • Operations Research

Distribution Statement:

APPROVED FOR PUBLIC RELEASE