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A Dynamic Model of the Firm

dc.contributor.author Chu, Kong
dc.contributor.author Naylor, Thomas
dc.date.accessioned 2010-06-28T19:01:51Z
dc.date.available 2010-06-28T19:01:51Z
dc.date.issued 1965-05-01
dc.identifier.uri https://hdl.handle.net/10161/2615
dc.description.abstract In this paper we utilize traditional microeconomic theory and elementary queuing theory to develop a computer simulation model of a single-product, multi-process firm. One of our objectives is to demonstrate that the body of economic theory known as the "theory of the firm" may be used to provide a convenient frame of reference in applying some of the more recently developed analytical tools of operations research and computer technology to the analysis of the behavior of the firm. The static equilibrium model of the firm presented in Value and Capital by J. R. Hicks is taken as a point of departure in constructing a simulation model in which (1) the time interval between the arrival of orders at the firm is a stochastic variate with a known probability distribution, (2) each order which the firm receives must pass through n processes before it is transformed into a single unit of output, and (3) the time interval which an order spends at the jth process (j = 1,..., n) is a stochastic variate with a known probability distribution.
dc.format.extent 713006 bytes
dc.format.mimetype application/pdf
dc.language.iso en_US
dc.publisher MANAGEMENT SCIENCE
dc.subject Static equilibrium model
dc.title A Dynamic Model of the Firm
dc.type Journal article


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