This article discusses two linear programming models used in capital budgeting. Many real-world optimization problems have the property that optimal decisions must be stated in terms of integers or whole numbers. This is the case, for example, in capital budgeting models where the integer 0 means that one does not undertake a project and the integer 1 indicates that one does. A model for many such problems is that of integer programming. The two models include a linear programming model without integer restrictions and the other the same linear programming model but with integer restrictions on the decision variables. The former, which is an approximation, is referred as the LP model, and the latter is referred as the IP model. There is no way to round an LP optimal solution to get an optimal solution to the IP model.
This volume brings together papers by a distinguished group of scholars on various aspects of the international corporation: theoretical, financial, technological, legal, and political. The book also includes studies of three world industries--petroleum, automobile, and banking--and of three world regions where the international corporation has considerable predominance: Australia, Japan, and Latin America. These wide-ranging forays are brought to conclusion by a summary article on the future of the multinational enterprise, in which Raymond Vernon treats the theory of direct investment and attitudes of home and host countries. He recommends a harmonization of policies toward multinational corporations which would enable them to respond to economic signals related to scarcity rather than to differences in the artificial environment.The high quality of these papers, which were originally given at a symposium in the M.I.T. Sloan School of Management, merits their publication here; and as a stimulus to further research and learning, the editor has made no attempt to eliminate overlap or contradictions. A number of the presentations are informal talks committed to paper, while others are scholarly research. The chapters in each of the six sections reflect individual points of view rather than a single mode of analysis complete with common glossary. Professor Kindleberger remarks that Much of the contribution of the book consists of putting precisely and between a single set of covers the common intellectual coinage of the field of the international corporation as seen by economists, and to a lesser extent professors of management, practitioners, and political scientists.Contributors Charles P. Kindleberger, Robert Z. Aliber, H. G. Johnson, Stephen Hymer, Robert Rowthorn, H. David Willey, John H. Dunning, Seymour J. Rubin, Kenneth N. Waltz, M. A. Adelman, J. Wilner Sundelson, Julien-Pierre Koszul, Donald T. Brash, Carlos F. Diaz Alejandro, M. Y. Yoshino, and Raymond Vernon.