The modeling of the industrial enterprise production function

Kravtsov, Alexandr and Кравцов, Олександр Олексійович (2019) The modeling of the industrial enterprise production function. Проблеми системного підходу в економіці (4 (72)). pp. 208-213. ISSN 2520-2200

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Abstract

The article discusses the modeling of the industrial enterprise production function. The study of production functions is of great epistemological importance, since they mathematically express the essence of the relationship between factors and results of the production process, that is, they indirectly indicate the efficiency of using resources to create economic goods. Based on the analysis of the theory of production functions, problematic issues are identified that make it difficult to obtain adequate economic and statistical models for a particular enterprise. In order to build the production function of a particular enterprise, it is necessary to collect a large amount of statistically homogeneous material. Statistical observations relating to different time intervals are not always homogeneous, since they are influenced by various environmental factors. Traditional models of production functions used to approximate statistical observations do not have asymptotes. They grow to infinity as any argument grows. The production capacity of a particular enterprise is limited. Upon reaching production capacity, a subsequent increase in the costs of objects of labor does not increase the volume of production. The purpose of the article is to substantiate approaches to modeling the production function of an industrial enterprise and its analytical form, taking into account the shortcomings of traditional models. In order to modeling the production process of a particular enterprise, it is necessary to take into account its internal structure, that is, the entire technological chain of the processing of labor objects into finished products. The production function of the enterprise can be represented by a set of production functions of elementary production units, which are in certain relations with each other on different sections of the technological lines. An analytical type of the production function of an elementary production unit is proposed and its practical verification is carried out. The production function of the enterprise can be used to plan costs and volumes of finished products, as well as to justify investment decisions to increase production capacity.

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