IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The coordination of short-run decision-making with long-range planning

  • Loughridge, Dennis W
  • Damon, William W
  • Peterson, David W
Registered author(s):

    The dichotomy of short-run and long-run decision-making in economic enterprises has gained widespread acceptance, both in practice and in the related literature despite the inherent interdependence of these decisions. The problem addressed in this paper deals with the proper coordination of short- and long-run planning. Structuring the overall decision problem of the firm as a dynamic programming problem, we find that a natural decomposition into long- and short-range planning results. In this decomposition, all decisions which must be made in the first segment of the planning period are allocated to the short-run decision-makers and all subsequent decisions to the long-range planners. Though several formats have been suggested in the literature for linking short- and long-run plans, most notably the use of shadow prices and of targets or quotas, we find that from a conceptual viewpoint these are inadequate mechanisms and that the proper connection involves the dynamic programming return function.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/B6VC4-48NJ35H-79/2/016855fda0f93fd4c2885bf2262290b5
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Omega.

    Volume (Year): 4 (1976)
    Issue (Month): 6 ()
    Pages: 673-684

    as
    in new window

    Handle: RePEc:eee:jomega:v:4:y:1976:i:6:p:673-684
    Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description

    Order Information: Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
    Web: https://shop.elsevier.com/order?id=375&ref=375_01_ooc_1&version=01

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:4:y:1976:i:6:p:673-684. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.