IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v221y2014i1p357-37610.1007-s10479-013-1392-6.html
   My bibliography  Save this article

Quadratic model for allocating operational budget in public and nonprofit organizations

Author

Listed:
  • Zilla Sinuany-Stern

Abstract

We develop a quadratic model for allocating operational budgets in public and nonprofit organizations. The allocations for each organizational unit have lower and upper bounds. The objective function is to minimize the weighted sum of the quadratic deviations of each allocation from its bounds. The optimal allocations are mostly around the midpoint between the bounds. A simple algorithm is presented to derive the solution. The new quadratic model is compared to the familiar linear model for budget allocation, which almost always, provides extreme allocations on the bounds: for some units on the upper bound, while for others, on the lower bound. We perform sensitivity analyses, and resolve special cases of the model with closed form solution. Moreover, we show various properties of the quadratic budget allocation model and prove that its fairness index is higher than that of the linear model. The model, with its variants, was actually used for allocating budgets in various university setups; some examples are presented here. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Zilla Sinuany-Stern, 2014. "Quadratic model for allocating operational budget in public and nonprofit organizations," Annals of Operations Research, Springer, vol. 221(1), pages 357-376, October.
    • Handle: RePEc:spr:annopr:v:221:y:2014:i:1:p:357-376:10.1007/s10479-013-1392-6
    DOI: 10.1007/s10479-013-1392-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10479-013-1392-6
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10479-013-1392-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael F. Duffy, 1989. "ZBB, MBO, PPB and their effectiveness within the planning/marketing process," Strategic Management Journal, Wiley Blackwell, vol. 10(2), pages 163-173, March.
    2. Boaz Golany & Eran Tamir, 1995. "Evaluating Efficiency-Effectiveness-Equality Trade-Offs: A Data Envelopment Analysis Approach," Management Science, INFORMS, vol. 41(7), pages 1172-1184, July.
    3. Piet Verheyen, 1998. "The Missing Link in Budget Models of Nonprofit Institutions: Two Practical Dutch Applications," Management Science, INFORMS, vol. 44(6), pages 787-800, June.
    4. Harold Pollack & Richard Zeckhauser, 1996. "Budgets as Dynamic Gatekeepers," Management Science, INFORMS, vol. 42(5), pages 642-658, May.
    5. Zanakis, Stelios H. & Mandakovic, Tomislav & Gupta, Sushil K. & Sahay, Sundeep & Hong, Sungwan, 1995. "A review of program evaluation and fund allocation methods within the service and government sectors," Socio-Economic Planning Sciences, Elsevier, vol. 29(1), pages 59-79, March.
    6. J Rios & D Rios Insua, 2008. "A framework for participatory budget elaboration support," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(2), pages 203-212, February.
    7. Meir J. Rosenblatt & Zilla Sinuany-Stern, 1989. "Generating the Discrete Efficient Frontier to the Capital Budgeting Problem," Operations Research, INFORMS, vol. 37(3), pages 384-394, June.
    8. Keeney,Ralph L. & Raiffa,Howard, 1993. "Decisions with Multiple Objectives," Cambridge Books, Cambridge University Press, number 9780521438834.
    9. Tamiz, Mehrdad & Jones, Dylan & Romero, Carlos, 1998. "Goal programming for decision making: An overview of the current state-of-the-art," European Journal of Operational Research, Elsevier, vol. 111(3), pages 569-581, December.
    10. Ioannis Gamvros & Richard Nidel & S. Raghavan, 2006. "Investment Analysis and Budget Allocation at Catholic Relief Services," Interfaces, INFORMS, vol. 36(5), pages 400-406, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aditya U. Kulkarni & Christian Wernz, 2020. "Optimal incentives for teams: a multiscale decision theory approach," Annals of Operations Research, Springer, vol. 288(1), pages 307-329, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tamiz, Mehrdad & Azmi, Rania A. & Jones, Dylan F., 2013. "On selecting portfolio of international mutual funds using goal programming with extended factors," European Journal of Operational Research, Elsevier, vol. 226(3), pages 560-576.
    2. Hocine, Amine & Kouaissah, Noureddine & Bettahar, Samir & Benbouziane, Mohamed, 2018. "Optimizing renewable energy portfolios under uncertainty: A multi-segment fuzzy goal programming approach," Renewable Energy, Elsevier, vol. 129(PA), pages 540-552.
    3. Daniel R. Georgiadis & Thomas A. Mazzuchi & Shahram Sarkani, 2013. "Using multi criteria decision making in analysis of alternatives for selection of enabling technology," Systems Engineering, John Wiley & Sons, vol. 16(3), pages 287-303, September.
    4. Alfonso Mateos & Antonio Jiménez-Martín & Sixto Ríos-Insua, 2015. "A Group Decision-Making Methodology with Incomplete Individual Beliefs Applied to e-Democracy," Group Decision and Negotiation, Springer, vol. 24(4), pages 633-653, July.
    5. Jesús Barreiro-Hurlé & José Gómez-Limón, 2008. "Reconsidering Heterogeneity and Aggregation Issues in Environmental Valuation: A Multi-attribute Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(4), pages 551-570, August.
    6. KARRI PASANEN & MIKKO KURTTILA & JOUNI PYKÄlÄINEN & JYRKI KANGAS & PEKKA LESKINEN, 2005. "Mesta — Non-Industrial Private Forest Owners' Decision-Support Environment For The Evaluation Of Alternative Forest Plans Over The Internet," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 4(04), pages 601-620.
    7. Panos Xidonas & Haris Doukas & George Mavrotas & Olena Pechak, 2016. "Environmental corporate responsibility for investments evaluation: an alternative multi-objective programming model," Annals of Operations Research, Springer, vol. 247(2), pages 395-413, December.
    8. Singer, Marcos & Donoso, Patricio & Poblete, Francisco, 2002. "Semi-autonomous planning using linear programming in the Chilean General Treasury," European Journal of Operational Research, Elsevier, vol. 140(2), pages 517-529, July.
    9. Gerd Gigerenzer, 1997. "Bounded Rationality: Models of Fast and Frugal Inference," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 133(II), pages 201-218, June.
    10. Shuang Liu & Kirsten Maclean & Cathy Robinson, 2019. "A cost-effective framework to prioritise stakeholder participation options," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 7(3), pages 221-241, November.
    11. Khaled, Oumaima & Minoux, Michel & Mousseau, Vincent & Michel, Stéphane & Ceugniet, Xavier, 2018. "A multi-criteria repair/recovery framework for the tail assignment problem in airlines," Journal of Air Transport Management, Elsevier, vol. 68(C), pages 137-151.
    12. Zhang, Tianyu & Dong, Peiwu & Zeng, Yongchao & Ju, Yanbing, 2022. "Analyzing the diffusion of competitive smart wearable devices: An agent-based multi-dimensional relative agreement model," Journal of Business Research, Elsevier, vol. 139(C), pages 90-105.
    13. Smith, Chris M. & Shaw, Duncan, 2019. "The characteristics of problem structuring methods: A literature review," European Journal of Operational Research, Elsevier, vol. 274(2), pages 403-416.
    14. Anirban Basu & William Dale & Arthur Elstein & David Meltzer, 2009. "A linear index for predicting joint health‐states utilities from single health‐states utilities," Health Economics, John Wiley & Sons, Ltd., vol. 18(4), pages 403-419, April.
    15. Chorus, Caspar & van Cranenburgh, Sander & Daniel, Aemiro Melkamu & Sandorf, Erlend Dancke & Sobhani, Anae & Szép, Teodóra, 2021. "Obfuscation maximization-based decision-making: Theory, methodology and first empirical evidence," Mathematical Social Sciences, Elsevier, vol. 109(C), pages 28-44.
    16. Wu, Desheng (Dash) & Lee, Chi-Guhn, 2010. "Stochastic DEA with ordinal data applied to a multi-attribute pricing problem," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1679-1688, December.
    17. Perrels, Adriaan & Molarius, Riitta & Porthin, Markus & Rosqvist, Tony, 2008. "Testing a Flood Protection Case by Means of a Group Decision Support System," Discussion Papers 449, VATT Institute for Economic Research.
    18. Carlin C. F. Chu & Simon S. W. Li, 2024. "A multiobjective optimization approach for threshold determination in extreme value analysis for financial time series," Computational Management Science, Springer, vol. 21(1), pages 1-14, June.
    19. Fernandez del Pozo, J. A. & Bielza, C. & Gomez, M., 2005. "A list-based compact representation for large decision tables management," European Journal of Operational Research, Elsevier, vol. 160(3), pages 638-662, February.
    20. Mario Fedrizzi & Michele Fedrizzi & R. A. Marques Pereira, 2007. "Consensus Modelling In Group Decision Making: Dynamical Approach Based On Fuzzy Preferences," New Mathematics and Natural Computation (NMNC), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 219-237.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:annopr:v:221:y:2014:i:1:p:357-376:10.1007/s10479-013-1392-6. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.