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The author: Lyubyashenko S.     Published in № 5(101) 31 october 2024 year
Rubric: Entrepreneurship practice

Modeling the Performance of an Integrated Structure with Vertical and Horizontal Interaction of Firms in the Market

The need to restore and create new production chains in machine-building and other complexes requires modeling the final results of the activities of such structures. In this regard, the methodology of the analysis of integrated production chains needs further improvement. The object of the study is a technological chain with full integration of participants, in which the degree of influence of the cumulative nature of cost growth on the results of the system is studied. It is proposed to determine the volume of output of end products by participants in the chain based on demand functions. The article is devoted to substantiating the mechanism of obtaining additional profit by the system by directing part of the profit to reduce production costs. The influence of this process on the volume of the final product of the system and market prices has been established. The article uses matrix modeling as a formal tool for describing the activities of production and technological chains, based on the methodology of forming an intersectoral balance. The results of the study showed that in an integrated system with vertical and horizontal interconnections of firms, directing part of the total profit to cost reduction measures is justified. However, there is an effective (threshold) profit level, deviation from which worsens the parameters of the entire chain: prices, production volumes, profit. The model, based on the principles of intersectoral balance, makes it possible to explain investment processes in integrated chains of any configuration. The results of the study contribute to understanding the mechanism of optimal investment activity of industrial and economic complexes.

Key words

manufacturing and technological chain, vertical integration in industry, competitiveness of manufacturers, efficiency of industrial enterprises, methodology of analysis of industrial complexes, matrix modeling, cooperation, investments, economic results

The author:

Lyubyashenko S.

Degree:

Cand. Sci. (Econ.), Associate Professor, Economic Theory Department, Novosibirsk State University of Economics and Management (NSUEM)

Location:

Novosibirsk, Russia