In the article "Sensitivity Analysis in Decision Making," Alfred Rappaport presented an interesting illustration of sensitivity analysis in management decision making. Aside from a general explanation of the concept of sensitivity analysis, his presentation was primarily devoted to a numerical illustration and suggested areas in which sensitivity information may be useful to management. One purpose of this paper is to describe sensitivity techniques using a dual linear programming model. Second purpose is to extend sensitivity analysis into several areas not mentioned by Rappaport. A third purpose of this paper is to discuss the problem of integer stipulations in linear programming. It will be shown that the integer solution obtained by Rappaport is not the optimal integer solution. A fourth purpose is to briefly discuss the formidable problem of sensitivity analysis in an integer model. Rappaport presented an integer solution, but his sensitivity analysis is actually based upon a continuous, noninteger solution.

The article outlines a statistical approach in cost measurement and control which can be easily implemented in practice. This approach will allow accountants to convert certain types of costs currently treated as overhead costs into traceable direct costs. The detailed cost measurements on individual inventory items provide "more information" than knowledge of only the total inventory cost. Cost accounting systems, often very elaborate cost accounting systems, are designed to detect and measure resource flows for both product and responsibility center costing. In general, however, detection and measurement costs increase as more detailed information on resource flows is desired. Accounting systems for this reason resort to collecting aggregated information. The aggregation itself may be over various types of activities, time intervals, or products. If one desires to study marginal costs, an examination of costs allocated to idle time will prove helpful. In summary, statistical cost finding is no panacea for accounting problems, it is rather a useful tool for developing information not usually found in the books.

Reviews the book "Decision Mathematics," by Dennis E. Grawoig.