Author: Robert M. Nizhegorodtsev, Dr. Sc. (Econ.), Head of Economic Dynamics & Innovation Management Laboratory

Nina P. Goridko, Cand. Sc. (Econ.), Associate Prof. of Economics

Abstract: The paper focuses on the target approach in the management science. It is proposed while taking managerial decisions to optimize the functionality reflecting the deviation of a system’s achieved parameters from its targeted values taking into account the restrictive parameters such as penalties and/or risks of the decision. Examples are given to illustrate the applications of the described methodology for typical economic problems.

Key words: goal setting; utility function; budget line; limitations; method of penalty; function of risk.