Suppose the military bureaucracy consistently misinforms Congress on the total costs of producing military hardware. Assume that it underestimates the actual costs and that the political representatives believe these estimates. Show how this is likely to cause a loss in efficiency. Show the efficient output of military hardware, the output desired by the military bureaucracy, and how the output chosen will differ from the efficient output even if Congress attempts to achieve efficiency. In your answer, assume that the military seeks to maximize the size of its budget

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Suppose the military bureaucracy consistently misinforms Congress on the total costs of producing military
hardware. Assume that it underestimates the actual costs and that the political representatives believe
these estimates. Show how this is likely to cause a loss in efficiency. Show the efficient output of military
hardware, the output desired by the military bureaucracy, and how the output chosen will differ from the efficient output even if Congress attempts to
achieve efficiency. In your answer, assume that the military seeks to maximize the size of its budget.

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