Some Quantitative Approaches to Planning for Multiple Production Systems.

Abstract Quantitative techniques may be used in performing certain tasks normally associated with accounting. Accounting is a prime source of some of the information used to estimate the parameters of various quantitative decision models. Accountants should understand and have access to the decision models used in a firm because some information generated by these models are used in his own tasks or should be included in the information that is supplied to decision makers. Evaluation of a proposed parameter change, such as the expansion of equipment capacity, may include a comparison of the predicted change in contribution profit with the predicted cost of that change. Calculation of the cost of potential estimation errors may assist in deciding where to focus efforts to reduce estimation errors. This cost is the difference between the optimal contribution profit, given the correct estimates, and the contribution profit, which will result if the decision maker attempts to implement the values of the decision variables selected on the basis of the erroneous estimates. Linear algebra can be used in costing the products for income determination. Linear programming can be used to determine the contribution profit and decision variables that are optimal for the parameters that actually did or should have occurred. This type of analysis adds new dimensions to the usual types of variances calculated and expands the concept of control.