Solving Profit Maximization Problem in Case of the Cobb-Douglas Production Function via Weighted AG Inequality and Geometric Programming (CROSBI ID 671063)
Prilog sa skupa u zborniku | izvorni znanstveni rad | međunarodna recenzija
Podaci o odgovornosti
Kojić, Vedran ; Lukač, Zrinka
engleski
Solving Profit Maximization Problem in Case of the Cobb-Douglas Production Function via Weighted AG Inequality and Geometric Programming
The long-run profit maximization is a standard and important problem having significant implications on a firm’s competitiveness. The common approach is to consider the profit maximization problem for production function with two inputs and use calculus to solve it. However, checking the necessary and sufficient conditions in case of more than two inputs can be difficult. Geometric programming provides a way to solve that problem for any number of inputs without the use of derivatives. Hereby the results are obtained much faster and the solution procedure is more elegant then when using calculus. Liu used the technique of signomial geometric programming to solve the problem in case of the CobbDouglas production function with two inputs. However, he was unable to prove that the result obtained is indeed the global maximum. Therefore, in this paper we solve the problem in question by using the weighted arithmeticgeometric inequality (WAG) in case of one input and some transformations of geometric programming in case of two or more inputs and prove that the result obtained is indeed the global optimum.
Cobb-Douglas production function, geometric programming, profit maximization, signomial programming, weighted arithmetic-geometric inequality
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Podaci o prilogu
1900-1903.
2018.
objavljeno
10.1109/IEEM.2018.8607446
Podaci o matičnoj publikaciji
Proceedings of the 2018 IEEE International Conference on Industrial Engineering and Engineering Management
LAOSIRIHONGTHONG, Tritos ; CHAI, Kah Hin ; XIE, Min ; JIAO, Roger
Bangkok: Institute of Electrical and Electronics Engineers (IEEE)
978-1-5386-6785-9
Podaci o skupu
2018 IEEE International Conference on Industrial Engineering and Engineering Management
poster
16.12.2018-19.12.2018
Bangkok, Tajland