What question did this study set out to answer?

This research aims to develop a linear programming framework to evaluate external acquisitions and cost allocations in the presence of reciprocal services.

March 18, 2026The Accounting Review

A Linear Programming Framework for Cost Allocation and External Acquisition when Reciprocal Services Exist.

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This research aims to develop a linear programming framework to evaluate external acquisitions and cost allocations in the presence of reciprocal services.
Developed a linear programming model to analyze external service acquisitions.
Incorporated simultaneous equation relationships for reciprocal services.
Applied the model to compute cost allocations even with externally purchased overhead services.
Confirmed that external acquisitions can be economically viable under certain conditions.
Identified optimal quantities for external acquisitions based on the linear programming outcomes.
Provided a method for accurately computing cost allocations involving overhead services.

Authors

KBKenneth R. BakerDartmouth College RTRod S TaylorNew School

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Implication

Framework demonstrates economic attractiveness of external acquisitions in service provision, suggesting optimized allocations.

Cite This Study

Baker et al. (1979) studied this question.

synapsesocial.com/papers/69ba44154e9516ffd37a603b https://doi.org/10.2308/tar-4489303

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A Linear Programming Framework for Cost Allocation and External Acquisition when Reciprocal Services Exist.

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Implication

Cite This Study

A Linear Programming Framework for Cost Allocation and External Acquisition when Reciprocal Services Exist.

Key Points

Discussion

Implication

Cite This Study

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