Accession Number : AD0670616

Title :   SUFFICIENT CONDITIONS FOR OPTIMALITY IN AN INFINITE HORIZON DEVELOPMENT PLAN.

Descriptive Note : Technical rept.,

Corporate Author : STANFORD UNIV CALIF OPERATIONS RESEARCH HOUSE

Personal Author(s) : Manne,Alan S.

Report Date : MAY 1968

Pagination or Media Count : 39

Abstract : The paper begins by formulating a finite horizon linear programming model for economic development. This formulation allows for heterogeneous capital goods and for nonnegativity constraints upon investment in each sector. It is then proved that a certain set of conditions are sufficient to ensure that an optimal solution to this T period, finite horizon plan will also coincide with an optimal solution during the first T periods of an infinite horizon plan. Among the restrictive conditions imposed to prove this sufficiency theorem are the following: gradualist consumption paths, no primary factors that cannot themselves be produced within the economy, a Leontief technology, and a characterization of the optimal finite horizon solution as one in which the terminal investment and output levels are positive. An illustrative numerical example is provided. (Author)

Descriptors :   (*MANAGEMENT PLANNING AND CONTROL, OPTIMIZATION), (*ECONOMICS, MANAGEMENT PLANNING AND CONTROL), PLANNING, LINEAR PROGRAMMING, MATHEMATICAL MODELS, PROBLEM SOLVING, THEOREMS

Subject Categories : Administration and Management
      Economics and Cost Analysis
      Operations Research

Distribution Statement : APPROVED FOR PUBLIC RELEASE