ABSTRACT
This chapter reviews the assumptions and methodology of the input–output approach. It offers the procedures based on an actual industrial Situation and thereby specifies the management functions and Production Systems where the method might be successfully implemented. The chapter presents procedures actually used in a multi-activity firm with the corresponding "academic" approaches. A typical multi-product firm involving final sales to customers at various stages of the production process can be depicted by a "linear graph. One of the practical limitations of input–output analysis in the firm is the extraordinary size that the flow matrix may take, thereby frustrating ali attempts at inversion unless something can be done to reduce the system to one of manageable proportions. The principal benefit of input-output analysis to the firm, as the chapter show that is in the area of financial and resource planning and control, especially where production Systems involve recycling.
