The Accounting Review Vol. 47 No. 3 1972
Discriminant Analysis as Applied to the Resource Allocation Decision.
Abstract
The article discusses discriminant analysis as applied to the resource allocation decision. Oftentimes the various departments within an organization must compete for investment funds. These resources may be allocated by the strategic planner given his perception. The normative discriminant system suggested is sufficiently flexible to be used as a descriptive system if the headquarters feel they would not alter the investment funding decisions given an expost analysis of the prior investment proposals. In this case, the priority coefficients would reflect the funding rationale as it has been applied to the previous investments. This paper shall be addressed to an examination of this question. In order to establish an organization frame of reference, an organizational model will be suggested. It is within this organizational context that the derivation and utilization of the priority coefficients shall be presented. The organizational model, which shall be adopted is that of a decentralized profit seeking entity, although the foregoing analysis applies to any organizational situation where investment funding decisions are centralized relative to the decentralized segments which initiate investment proposals.
- DOI
- 10.2308/tar-4503300
- Volume
- 47
- Issue
- 3
- Pages
- 567-575
- Language
- en
- Sources
- openalex crossref