Abstract The purpose of this article is to re-emphasize the effectiveness of simple ranking techniques in the heuristic solution of capital budgeting problems. Certainly, the application of mathematical programming techniques to capital budgeting decisions provides a most challenging area for research. Such programming formulations have continued to increase their realism by accounting for capital constraints, institutional requirements, and the effect of uncertainty. To examine the relative efficiency of selecting capital projects by a ranking strategy, it was necessary to have several hypothetical capital budgeting problems. The efficiency of simple ranking techniques requires that projects have a reasonably proportionate utilization of resource constraints. However, even in the absence of this condition, it is possible to generate an "approximate" solution by extending the previous simple ranking techniques to a "multidimensional" ranking criterion. Basically, the multidimensional ranking algorithm is an extension of the simple ranking techniques, and this extension is required for capital budgeting problems with multiple resource constraints which have considerable variation in their utilization by the proposed investment projects.
H. Russell Fogler (Sat,) studied this question.