The following are the complete equations for this model. Most of these are quite straightforward. The model UserGuide\chap07\complete\price2.mdl contains these equations.
| change in price= |
| IF THEN ELSE(target price > price, |
| (target price - price)/time to adjust price up, |
| (target price-price)/time to adjust price down) |
| Units: $/Box/Month |
demand = reference demand * effect price demand
Units: Box/Month
demand elasticity= 1
Units: Dmnl
| effect price demand= |
| EXP(-demand elasticity * LN(price/reference price)) |
Units: Dmnl
expected demand=SMOOTH(demand,time to form expectations)
Units: Box/Month
FINAL TIME = 100
Units: Month
initial price= 100
Units: $/Box
INITIAL TIME = 0
Units: Month
| price= INTEG (change in price, |
| initial price) |
Units: $/Box
reference demand=100
Units: Box/Month
reference price=100
Units: $/Box
SAVEPER = TIME STEP
Units: Month
target price=target revenue/expected demand
Units: $/Box
target revenue=10000+STEP(5000,10)
Units: $/Month
TIME STEP = 1
Units: Month
time to adjust price down=10
Units: Month
time to adjust price up=10
Units: Month
time to form expectations=2
Units: Month
