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Sales‐optimization under an unstable profit‐constraint
Author(s) -
Paroush Jacob
Publication year - 1986
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090070212
Subject(s) - constraint (computer aided design) , profit (economics) , microeconomics , economics , business , operations management , mathematical optimization , operations research , mathematics , geometry
Abstract This paper considers a firm's manager who maximizes total sales under unstable profit‐constraint. It is proved that, even if being risk‐neutral, the manager is worse off than in the stable equivalent case and that his best policy is to produce less than in the stable case.