Financial planning in the public sector and the Newsvendor problem

Authors

  • Jack Brimberg The Royal Military College of Canada, Mathematics and Computer Science department, Canada
  • Abdalla Mansur Al Ain University of Science and Technology, College of Engineering, Abu Dhabi, United Arab Emirates
  • Ghaleb A. El-Refae Al Ain University of Science and Technology, Abu Dhabi, United Arab Emirates

DOI:

https://doi.org/10.2298/YJOR171116015B

Keywords:

Newsvendor problem, Lapsed funds, public sector

Abstract

The purpose of this paper is to study the phenomenon of lapsed funding that occurs within the public sector using the framework of the Newsvendor Problem. Under this framework, we observe that lapsed funding is a natural outcome of the planning system when the financial manager is trying to maximize the value added to his unit. Centralizing control of operating budgets of homogeneous units is shown to reduce lapsed funds and improve their overall performance.

References

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Published

2018-05-01

Issue

Vol. 28 No. 2 (2018)

Section

Research Articles

License

Copyright (c) 2018 YUJOR

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