The Selection Decision of Public Constructions-An Application of Linear Programming

• Main Authors: Cheng-Chang Teng, 鄧政昌
• Other Authors: 林金賢
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/45333906973349242648

碩士 === 國立中興大學 === 高階經理人碩士在職專班 === 104 === Firm U, one of many Grade A construction firms in Taiwan, is specialized in the civil construction projects awarded by the government, such as barracks, school buildings, and government office buildings. With its limited resources, however, the most important topic for its administrators is to identify the lucrative projects out of numerous government projects. In the past years, administrators employed intuitive judgment method to select projects, but no one knew whether it was the best method for the corporation. Therefore, the research chose Corporation U as the research subject, divided a single project’s ROIC (Return on Invested Capital) into several segments to examine the factors contributing to profitability, and constructed a linear programming model to identify the optimal project-selecting portfolio. In conclusion, situational comparison was made to evaluate the projects selected by the administrators as well as the projects selected by computers, and thus recommendations of project-selecting strategy were formulated. According to the analysis results, profitability and profit are not necessarily the optimal criteria to select projects, although administrators intuitively select projects based on either profitability or dollar amount of profit. For two reasons: firstly, either profitability or dollar amount of profit do not necessarily match the resources accessible to the corporation; secondly, after the project-selecting portfolio chosen by administrators was compared with the project-selecting portfolio chosen by computers, the research found that the projects selected by computers had higher dollar amount of profit than the projects selected by administrators. Based on the facts stated above, administrators are advised to get rid of intuitive judgment method and construct a preliminary model to select the suitable projects. Subsequent researchers may incorporate restrictive factors in the model, turning the model into a comprehensive tool for administrators’ use in the days to come.