What question did this study set out to answer?

To evaluate how different budgeting models and variance analysis techniques impact a firm's profit and sales performance.

March 18, 2026The Accounting Review

Multiple Objective Budgeting Models: A Simulation.

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Authors

WLW. Thomas LinUniversity of Southern California

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Implication

Simulation examines profit and sales outcomes in firms using alternative planning and variance analysis systems, suggesting insights into effectiveness.

Key Points

To evaluate how different budgeting models and variance analysis techniques impact a firm's profit and sales performance.
Developed two budgeting models: satisficing goal programming and optimizing multiple objective linear programming.
Investigated two accounting control systems: traditional standard cost variance analysis and ex post variance analysis.
Conducted a computer simulation experiment with statistical analyses including F-tests and multiple-ranking procedures.
Found that profit and sales are higher using multiple objective linear programming compared to goal programming.
Ex post variance analysis led to higher sales than traditional variance analysis, but profits showed no significant difference.
Sensitivity analysis explored potential reasons for the observed outcomes.

Cite This Study

W. Thomas Lin (1978) studied this question.

synapsesocial.com/papers/69ba428e4e9516ffd37a2f6a https://doi.org/10.2308/tar-4500462

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Implication

Simulation examines profit and sales outcomes in firms using alternative planning and variance analysis systems, suggesting insights into effectiveness.

Multiple Objective Budgeting Models: A Simulation.

Discussion

Member takes

Implication

Key Points

Cite This Study

Multiple Objective Budgeting Models: A Simulation.

Discussion

Member takes

Implication

Key Points

Cite This Study

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