IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

A Linear Decision Rule for Production and Employment Scheduling

Listed author(s):
  • Charles C. Holt

    (Carnegie Institute of Technology)

  • Franco Modigliani

    (Carnegie Institute of Technology)

  • Herbert A. Simon

    (Carnegie Institute of Technology)

The decision problems involved in setting the aggregate production rate of a factory and setting the size of its work force are frequently both complex and difficult. The quality of these decisions can be of great importance to the profitability of an individual company, and when viewed on a national scale these decisions have a significant influence on the efficiency of the economy as a whole. This paper reports some of the findings of a research team that has been developing new methods to enable production executives to make better decisions and to make them more easily than they can with prevailing procedures. With the cooperation of a manufacturing concern, the new methods have been developed in the context of a set of concrete production scheduling problems that were found in a factory operated by the company. The new method which is presented in this paper, involves: (1) formalizing and quantifying the decision problem (using a quadratic approximation to the criterion function) and (2), calculating a generalized optimal solution of the problem in the form of a (linear) decision rule. Like a rule of thumb, an optimal decision rule prescribes a course of action when it is applied to a particular set of circumstances; but, unlike most rules of thumb, an optimal decision rule prescribes courses of action for which the claim can be made that the decisions are "the best possible," the meaning of "best" being clearly specified. The ultimate test, of course, must be whether the new decision methods do or do not outperform prevailing decision methods when full allowance is made for the cost of obtaining the optimal decisions.

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:
Download Restriction: no

Article provided by INFORMS in its journal Management Science.

Volume (Year): 2 (1955)
Issue (Month): 1 (October)
Pages: 1-30

in new window

Handle: RePEc:inm:ormnsc:v:2:y:1955:i:1:p:1-30
Contact details of provider: Postal:
7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA

Phone: +1-443-757-3500
Fax: 443-757-3515
Web page:

More information through EDIRC

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:inm:ormnsc:v:2:y:1955:i:1:p:1-30. 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: (Mirko Janc)

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.