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On valuing appreciating human assets in services
Author(s) -
Zeynep Akşin O.
Publication year - 2007
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/nav.20197
Subject(s) - valuation (finance) , attrition , human resources , workforce , dual (grammatical number) , productivity , service (business) , human resource management , value (mathematics) , constant (computer programming) , relocation , microeconomics , computer science , business , economics , operations research , industrial organization , finance , marketing , management , knowledge management , mathematics , medicine , art , literature , dentistry , machine learning , macroeconomics , programming language , economic growth
This paper derives optimal policies for when to hire, train, and lay off employees in service organizations when worker productivity appreciates deterministically or stochastically under constant, monotonic, and cyclic service demand. The model, an extension of the machine replacement problem from the engineering economy literature, uses infinite horizon linear programming to produce optimal personnel planning strategies and dual prices that characterize the workforce's economic value. The effect of employee attrition is also considered. In its valuation of human assets, unlike pure accounting approaches that only try to measure, this paper proposes an approach to capture the interaction between firm decisions pertaining to human resources and human resource value. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2007