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The decomposition algorithm has received increasing attention in recent years not only as a computational technique for large-scale management models but also as a systematic tool for designing organizational structure and information systems in decentralized organizations. The Kornai-Liptak (1965) decomposition algorithm is effective in providing important managerial implications from the solution. However, the major deficiency of the technique is a wide fluctuation of solutions in its convergence process to the optimum solution. This paper presents a modified algorithm which assures a faster and smoother convergence of solutions to the optimum
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