J. Kriens

Management accounting and operational research

Abstract We discuss some topics relating to management accounting and operational research. Because of the wide area of application of operational research techniques in management accounting we had to make a choice and limited us to budgetting through input-output analysis, cost-volume-profit analysis and transfer prices in decentralized organisations.

A note on the kinks at the mean variance frontier

In this paper the standard portfolio case with short sales restrictions is analyzed.Dybvig pointed out that if there is a kink at a risky portfolio on the efficient frontier, then the securities in this portfolio have equal expected return and the converse of this statement is false.For the existence of kinks at the efficient frontier the sufficient condition is given here and a new procedure is used to derive the efficient frontier, i.e. the characteristics of the mean variance frontier.

Sampling for quality inspection and correction: AOQL performance criteria

Abstract By definition, an Average Outgoing Quality Limit (AOQL) sampling plan leads to inspection of the whole population if the sample shows a number of defective items k exceeding an acceptance number k0. The literature shows how this constant k0 and other related parameters can be chosen such that the expected value of p , the fraction of defectives after inspection and possible correction, does not exceed a prespecified constant p m . This paper studies several other criteria that are ignored in the literature. It is based on an extensive Monte Carlo simulation. Its main conclusion is that AOQL sampling is useful in practice, including applications in auditing. Yet the probability that the average yearly outgoing fraction p exceeds the given constant p m can be sizable, if the original before-sampling fraction p exceeds p m ‘mildly’. The paper further investigates the effects of splitting the yearly population into subpopulations and the effects of underestimating the original fraction.