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RATIONALIZATION OF MULTINATION, MULTIPLANT OPERATIONS
Author(s) -
Hinomoto Hirohide
Publication year - 1975
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.1540-5915.1975.tb01055.x
Subject(s) - rationalization (economics) , production (economics) , linear programming , operations research , distribution (mathematics) , duty , business , sequence (biology) , net income , economics , operations management , computer science , microeconomics , industrial organization , mathematical optimization , mathematics , accounting , law , mathematical analysis , biology , political science , genetics
This study formulates a linear programming model of a multination, multiplant operation composed of three production stages and a distribution stage. The objective of the model is to maximize the weighted sum of net income produced by all operational units located in different countries. Major cost items include production, distribution, transportation, income tax, and import duty. The correct assessment of import duties on a lot of goods is made possible by identifying the entire sequence of countries in which the lot is processed. A solution to the linear program determines an optimum size of the lot and an optimum sequence of countries passed through by this lot.