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Articles

Study on the Scale and Influence Factors of Enterprise Production under Demand Uncertainty

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  • 1. College of Economics and Business Administration, Chongqing University, Chongqing 400030, China;
    2. International Business School, Sichuan International Studies University, Chongqing 400031, China

Received date: 2017-07-03

  Revised date: 2018-05-28

  Online published: 2018-10-22

Abstract

Based on the different circumstances of the company's production scale, the issue of the enterprise's production scale decision-making under the uncertainty of the demand was discussed. A decision-making model for the production scale of the company was constructed and expressions under different conditions were obtained. The analysis shows that if the demand is uncertain, the company has the optimal production scale. With the increase of the cost, the critical value of the optimal production scale of the company will increase. The interest rate and market force are negatively related to the optimal production scale of the enterprise. When the scale of enterprise production is, the optimal production scale of an enterprise is positively related to the volatility and expected growth rate of the unit-time income stream, while has nothing to do with the unit cost. Within the range, the optimal production scale is negatively related to the volatility of the enterprise's unit time income flow. As the company's unit time revenue flow expects an increase in the growth rate, it first decreases and then increases, and as the company's unit cost (C) increases, it first remains unchanged and then increases. This provides one kind of explanation for the decision-making of enterprises' production scale under the uncertainty of demand.

Cite this article

TAN Ying-shuang, ZHANG Xue-qing, HENG Ai-min . Study on the Scale and Influence Factors of Enterprise Production under Demand Uncertainty[J]. Chinese Journal of Management Science, 2018 , 26(8) : 138 -145 . DOI: 10.16381/j.cnki.issn1003-207x.2018.08.014

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