A Dynamic Stochastic Model of Corporate Behavior Over the Business Cycle With a Special Application to the Major U.S. Military Airframe Builders.

Abstract

This thesis contains a formulation of a dynamic stochastic model of corporate behavior over the business cycle and applies the basic model to firms in the U.S. airframe industry. The literature dealing with the theory of the firm is surveyed and a taxonomy is developed within which the major contributions to the literature are appraised. The basic model is formulated as an optimal control problem. The model is used to study the behavior of the firm over the business cycle and to suggest a possible reconciliation of the traditional and managerial theories of the firm. Financial considerations are incorporated into the model and the relationship between the firm's optimal operating decisions and its optimal financial decisions is examined. A model of a representative airframe builder is formulated as a stochastic optimal control problem and is used to study the impact of the government's progress payments policy and the likely impact of making interest expense an allowable cost under government contracts.

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1977
Accession Number
ADA050146

Entities

People

  • John Dudley Finnerty

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Biomedical
  • C4I
  • Engineered Resilient Systems
  • Human Systems
  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Aircraft Equipment
  • Aircraft Industry
  • Aircrafts
  • Airframes
  • Business Administration
  • Commercial Aircraft
  • Computational Science
  • Employment
  • Governments
  • Investments
  • Mathematical Models
  • Mathematical Programming
  • Organizational Structure
  • Personnel Management
  • Random Variables
  • Recreation
  • Tanker Aircraft

Readers

  • Economics
  • Operations Research
  • Theoretical Analysis.