ADM 2341 Lecture 12: Untitled 5

• School: University of Ottawa
• Department: Administration
• Course: ADM 2341
• Professor: Abdenour Slaouti

Document Summary

> two-way associations in which departments provide and receive services from one another are called reciprocal relationships. > reciprocal method improves upon the step method by giving complete recognition to reciprocal services. 1 develop a series of simultaneous linear equations recognizing the reciprocal services between service departments. There will be as many equations as the number of service departments. The unknown variables represent the total cost of service departments after allocation. 2 solve the series of equations with the use of matrix algebra or appropriate computer software. The results obtained are allocated to both service and operating departments. The sequence of allocation does not affect the results. > in our example, there are two service and two operating departments; thus two equations will be solved simultaneously. When the number of departments is large, more equations are required, in which case a computer is required to facilitate the computation.