Managerial Decisions Under Inflation

by Abraham Warszawski, (M.ASCE), Assoc. Prof.; Faculty of Civ. Engrg. Technion—Israel Inst. of Tech., Haifa, Israel,

Serial Information: Journal of the Construction Division, 1982, Vol. 108, Issue 1, Pg. 147-157

Document Type: Journal Paper


The problems of managerial decision making under inflation are discussed, and some solutions are offered. The risk of estimating under inflation is explained, and a method to improve the prevailing compensation procedure is presenteed. Later, the influence of erosion of the depreciation allowance on the economy of investment in equipment is examined. Then the inadequacy of the conventional cost control methods under conditions of inflation is shown. Finally, the limitations of financial reporting based on historic values are described.

Subject Headings: Decision making | Risk management | Erosion | Investments | Equipment and machinery | Financial management

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