Micro economics

On the micro-economic level, simple company value chains consisting of buying products to optionally make other products out of it, to distribute and sell these products with a margin to customers become complex networks with globally spread out locations. Globally operating companies face the task to manage volumes and values in this network in a profitable way to ensure competitiveness and business sustainability. 

Demand-oriented management concepts focus on sales price and sales quantity decisions to maximize turnover with a given or unrestricted supply. Demand-oriented research areas are micro-economics specifically for price mechanisms (Varian 1994), sales and marketing (Effort 1998 Kilter/Keller 2005) and recently revenue management (Cross 2001 Tallury/Van Ryzin 2005). 

Demand management concepts consider demand and sales as active areas of decision making with respect to pricing and sales quantity decisions. Research fields addressing these decisions are primarily micro-economics, sales marketing research as well as recently revenue management. 

Micro-economics contribute to demand-oriented management with economic research on market and pricing mechanisms (Varian 1994). Relations of demand and supply from the micro-perspective of buyers and sellers as market participants are investigated. Specifically, market-constellations, price-quantity functions and pricing mechanisms are related to sales quantity and price decision making. 

Depending on the market constellations, market participants can dominate sales price and quantity decisions in micro-economic theory. Relationships between and price and quantity in the market constellations are reflected by price-quantity functions as shown in fig. 10 (N.N. 2006d). 

Finally, pricing mechanisms are an important aspect investigated in micro-economics specifically in auction theory. Three different types of pricing mechanism relations exist bilateral negotiations, single-sided auctions and many-to-many exchanges as shown in fig. 11. 

Spot demand price elasticity is not a forecasted parameter but needs to be derived analytically. As specified in the value chain characteristics in subchapter 3.2 the company does not have a monopoly in the market and sales decision of the company do not influence the market price. Therefore, elasticity is not determined from a macro-economic perspective considering market prices but from a micro-economic perspective analyzing the specific spot demand forecasts the company receives. Table 24 provides the detailed steps of the algorithm for determining elasticity and the price-... 

To identify the social and economic advantages of our process a study has been made of its applicability in rural areas of Tanzania. The evaluation included the selection of a suitable feedstock, the macro- and micro-economical effects and the fitting into the existing social-cultural system. 

Consultations with the European Commission resulted in an update of the total allocation figure with minor adjustments for those elements that were not accepted by the Commissions (mainly ex-post adjustments). However, a micro economic decision on the allocation to individual installations was not explicitly made and was the subject of the second round of discussions at the domestic level. In general terms, adjustments of the allocation methodology were allowed, but they had to respect the relevant Commission decision. 

The credit spread reflects a number of macroeconomic and micro-economic factors, and at any one time is a good snapshot indicator of the perceived health and future prospect of the economy. For example, the reduction in spread from 2001 to 2004 reflects a general increase in favorable perception on the health of the U.S. economy, following the technology and dot-com boom and bust of the previous years and the market disruption following September 11, 2001. 

The concept of equilibrium is quite commonly used in macro- and micro-economics. In fact, in natural systems, one can only expect unstable dynamic equilibrium. It may be noted that one can have stable non-equilibrium steady states. Approach to the so-called equilibrium or to such steady states would depend on a number of variables, which have to be carefully identified. Cause Effect relationship leads to the concept of Force Flux discussed in Part One in this book which is quite relevant for real systems. In the steady state, balance of forces occurs leading to balancing of effects. Typical example in economics is demand-supply relationship in the context of time variations in price and production. 

Ore, T. 1992, Micro-economic reform and occupational health and safety a study of the Australian coal mining industry . Journal of Occupational Health and Safety—ANZ, vol. 8, no. 2, pp. 155-65 Oxenburgh, M. 1991, Increasing Productivity and Profit through Healdj and Safety, Sydney CCH International... 

As is stated before collaboration can reduce the waste levels. The impact on the profit depends on the possibility of price setting and on the actor who realizes the waste reduction. The micro-economic theory has been followed if monopoly price setting is not possible marginal costs are equal to marginal revenues. This is indicated as spot market. In the second case a monopoly price setting is assumed the prices remain at the actual level. This assumption can only be realized if other wholesalers and retailers do not copy the approach of waste reductions. So the assumption will than be that at each level more actors are involved. 

These conditions are not always present. To invest in the prevention of occupational injury implies that the small business employer sees as preventable - and related to exposure - one lost-time injury every second year among his ten workers (in a high risk environment) without considering the reason why the other nine had no injuries during the period. This represents a psychological, an analytical and a micro-economic dilemma. 

The broad field of economics may be divided into macro and micro economics. Macroeconomics involves problems associated with nations sueh as trade, trade deficits, monetary policy, national productivity, growth of the economy, inflation, budget defieits, national debt, unemployment, tariffs, etc. Microeconomics involves problems of firms and of individuals. Engineering economics is a special branch of microeconomics largely involved with the analysis of engineering alternatives and their performance. 

The Schumpeter Clock model [5.13] stresses the existent, explicitly active pushing micro-economic forces and powerful supply side checks and balances in explaining the short term non-equilibrium motions of an economy, whereas other model designs primarily take into account the less definite macro-economic forces and weak demand side checks and balances. 

Macro- and Micro-Economic Variables of the Model and their Interdependence... 

In the following sections equations of motion, which quantify the dynamics of economic change, will be set up and solved. Simultaneously the model design connects the relevant micro-economic and macro-economic concepts. However, the model will certainly be partial, with its focus on the theory of industrial fluctuations and in its abstraction of the impact of other substantive areas of economic theory. The following specific limitations apply ... 

The performance of the Schumpeter Clock will be demonstrated by observing the non-equilibrium motion of the investment structure index Z t), or better of its fluctuating part z t), for the industrial sector in the Federal Republic of Germany over the period 1956-1979 which will be then explained by using micro-economically determined and supply side factor reinforced shifts of bias in the overall investment activities (Sect. 5.5). 

Turning now to the issue of the generation of macro-economic cycles from what seems to be a condition of micro-economic chaos it can be shown that the single unit motions of the investors configuration form a collective scheduled and synchronized pattern under appropriate assumptions about the interaction between investors. 

Obviously this is a state of high micro-economic friction and loss of energy, which carries already the seeds for a transition into another cyclic state in which the investors interaction parameter k-would exceed the critical value Kc. Needless to say, the economy need not necessarily resume its cyclic motion with an upswing from the current intermediate level of investment activities. 

---