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A STOCHASTIC COST VOLUME PROFIT ANALYSIS
Author(s) -
Kim Chaiho
Publication year - 1973
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1973.tb00559.x
Subject(s) - profit (economics) , econometrics , computer science , volume (thermodynamics) , stochastic modelling , mathematical economics , economics , operations research , mathematical optimization , mathematics , microeconomics , finance , physics , quantum mechanics
In most models dealing with the cost‐volume‐profit analysis, the costs and price are usually assumed to be deterministic variables. In this paper, we build such models by explicitly assuming that they are stochastic variables. We then evaluate a number of statistical properties of these models and, in turn, consider the usefulness of the models for a short term financial analysis.