Accession Number : AD0685629

Title :   AN OPTIMAL INITIAL INVESTMENT-BORROWING MODEL FOR THE COMPETITIVE FIRM.

Descriptive Note : THEMIS Optimization research program,

Corporate Author : TEXAS A AND M UNIV COLLEGE STATION INST OF STATISTICS

Personal Author(s) : Thompson,Russell G. ; Hocking,R. R. ; Fry,Clifford L. ; Proctor,Michael S.

Report Date : 04 APR 1969

Pagination or Media Count : 28

Abstract : In the study, a dynamic initial investment-borrowing model for the competitive firm involving nonconvex investment effects, borrowing limitations, cash flows, and convex production costs was formulated as a discrete-time optimal control problem for the competitive firm. In the model, the firm's objective was to maximize, subject to constraints, the sum of discounted revenues and interest earnings less interest, production, and overhead costs (over the decision-making period) plus the difference between the ending discounted value and the initial costs of the capacity. The state variables were capacity, indebtedness, and savings, and the control variable was scale of production. There were five sets of inequality constraints of which the ones involving initial investments and borrowings were particularly important. (Author)

Descriptors :   (*MANAGEMENT PLANNING AND CONTROL, OPTIMIZATION), MANAGEMENT PLANNING AND CONTROL, INDUSTRIAL PRODUCTION, COSTS, ECONOMICS, DECISION MAKING, MATHEMATICAL MODELS, CONTROL SYSTEMS, COMMERCE, COST EFFECTIVENESS

Subject Categories : Administration and Management
      Economics and Cost Analysis

Distribution Statement : APPROVED FOR PUBLIC RELEASE