The Optimal Strategy of the Demand Following Firm

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F16%3A86098068" target="_blank" >RIV/61989100:27510/16:86098068 - isvavai.cz</a>

Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

The Optimal Strategy of the Demand Following Firm

Popis výsledku v původním jazyce

The optimal strategy of a firm in a competitive environment is generally derived from the price of produced good and its market demand. However, the firm usually has to make a decision about its future production and hence its supply at the moment when neither the price nor the market demand is known yet. In this case, firms are often recommended to keep inventory as a &quot;buffer stock&quot; to cover the fluctuations in future market demand. Keeping high inventory as well as providing insufficient supply is penalized by the increased costs which decrease the competitiveness of the firm on the market. The main goal of this paper is to derive the optimal production strategy of the demand following firm. The optimal production strategy should lead to a firm supply, which could satisfy the demand and will be not connected with keeping too much inventory. The dynamic optimization problem of the firm is solved. As there are different expectations about the growth of the aggregate demand during the phases of expansions and contractions in the economy, the optimal production strategy of the firm varies with the cyclic movement of the demand. The proposed strategy is tested on the aggregate data of the Czech economy.

Název v anglickém jazyce

The Optimal Strategy of the Demand Following Firm

Popis výsledku anglicky

The optimal strategy of a firm in a competitive environment is generally derived from the price of produced good and its market demand. However, the firm usually has to make a decision about its future production and hence its supply at the moment when neither the price nor the market demand is known yet. In this case, firms are often recommended to keep inventory as a &quot;buffer stock&quot; to cover the fluctuations in future market demand. Keeping high inventory as well as providing insufficient supply is penalized by the increased costs which decrease the competitiveness of the firm on the market. The main goal of this paper is to derive the optimal production strategy of the demand following firm. The optimal production strategy should lead to a firm supply, which could satisfy the demand and will be not connected with keeping too much inventory. The dynamic optimization problem of the firm is solved. As there are different expectations about the growth of the aggregate demand during the phases of expansions and contractions in the economy, the optimal production strategy of the firm varies with the cyclic movement of the demand. The proposed strategy is tested on the aggregate data of the Czech economy.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

10102 - Applied mathematics

Projekt

<a href="/cs/project/EE2.3.20.0296" target="_blank" >EE2.3.20.0296: Výzkumný tým pro modelování ekonomických a finančních procesů na VŠB-TU Ostrava</a><br>

Návaznosti

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)<br>S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2016

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

Proceedings of 14th International Scientific Conference Economic Policy in the European Union Member Countries: September 14-16, 2016, Petrovice u Karviné, Czech Republic. Part 1

ISBN

978-80-7510-210-2

ISSN

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e-ISSN

neuvedeno

Počet stran výsledku

10

Strana od-do

832-841

Název nakladatele

Slezská univerzita v Opavě, Obchodně podnikatelská fakulta v Karviné

Místo vydání

Opava

Místo konání akce

Petrovice u Karviné

Datum konání akce

14. 9. 2016

Typ akce podle státní příslušnosti

EUR - Evropská akce

Kód UT WoS článku

000403638200088