Multi-goal optimization in managerial science

Sanford Baum and Robert C Carlson

Omega, 1974, vol. 2, issue 5, 607-623

Abstract: A number of modern economists have accepted alternatives to the basic hypothesis of neo-classical economics that the overriding objective of any firm is to maximize the owner's (shareholder's) welfare. However, with one or two outstanding exceptions, these alternatives have been ignored by managerial scientists, whose economics related models continue to be formulated in terms of the neo-classical hypothesis. This paper treats the implications of those alternatives which deny that corporate management is trying to optimize any single goal--let alone shareholder welfare. More specifically, this paper discusses management science models involving the allocation of scarce resources to satisfy several goals. The resulting multi-goal "optimization" problem is identified as a vector "maximization" problem and is formulated in terms of the efficient point concept.

Date: 1974
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