Abstract
In this paper, we describe an information technology capital budgeting (ITCB) problem, show that the ITCB problem can be modeled as a 0-1 knapsack optimization problem, and propose two different simulated annealing (SA) heuristic solution procedures to solve the ITCB problem. Using several simulations, we empirically compare the performance of two SA heuristic procedures with the performance of two well-known ranking methods for capital budgeting. Our results indicate that the information technology (IT) investments selected using the SA heuristics have higher after-tax profits than the IT investments selected using the two ranking methods.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 333-351 |
| Number of pages | 19 |
| Journal | International Transactions in Operational Research |
| Volume | 13 |
| Issue number | 4 |
| DOIs | |
| State | Published - Jul 2006 |
All Science Journal Classification (ASJC) codes
- Business and International Management
- Computer Science Applications
- Strategy and Management
- Management Science and Operations Research
- Management of Technology and Innovation