Mathematical Methods and Models in Economic Planning, Management and Budgeting PDF
Preview Mathematical Methods and Models in Economic Planning, Management and Budgeting
Galimkair Mutanov Mathematical Methods and Models in Economic Planning, Management and Budgeting Second Edition Mathematical Methods and Models in Economic Planning, Management and Budgeting Galimkair Mutanov Mathematical Methods and Models in Economic Planning, Management and Budgeting Second Edition GalimkairMutanov Al-FarabiKazakhNationalUniversity Almaty,Kazakhstan ISBN978-3-662-45141-0 ISBN978-3-662-45142-7(eBook) DOI10.1007/978-3-662-45142-7 SpringerHeidelbergNewYorkDordrechtLondon LibraryofCongressControlNumber:2014955682 1stedition:©Al-FarabiKazakhNationalUniversity2011 ©Springer-VerlagBerlinHeidelberg2015 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof thematerialisconcerned,specificallytherightsoftranslation,reprinting,reuseofillustrations,recitation, broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionorinformation storageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilarmethodology nowknownorhereafterdeveloped.Exemptedfromthislegalreservationarebriefexcerptsinconnection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. 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Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) Preface A new qualitativestage of the market economy,defined as knowledgeeconomics, differs considerably from the previous stage in terms of nonlinear trends in eco- nomicdevelopment.Thoseresponsibleforreproductioncyclemanagementhaveto makemanagerialdecisionsinconditionsofhighuncertaintyaffectingthedevelop- mentofproductionprocesses,distribution,exchange,andconsumption.Itisimpos- sibletoestimatetheeffectivenessofsuchprojectsandprocesseswithoutadequate administrativeinstruments. Economic-mathematical modeling is one of the most effective methods for de- scribing complex socio-economic objects and processes in terms of mathematical models in combination with new engineering decisions. Modeling thus becomes partofeconomicsitself.Knowledgeeconomicsasacommonalbeitsomewhatab- stractcategorymustbeexpressedinatangibleconcreteform.Thiscanbeachieved bymeansofmathematicmodelingofitsprocessesasmanagerialobjects. Thepresentworkpresentsaseriesofworksinthefieldofscientificandmethod- ological bases of creation of information-analytical systems of management of fi- nancialandeconomicprocessesandsystemsintheperiodfrom1995to2011years. Thistextreflectsthecurrentleveloftheoreticalresearchanddevelopmentofthe systemofmathematicalmodelsandmethodsthatcanbeusedtosolvereal,impor- tanteconomicproblems:controlofdevelopmentandoperationsupportatanybud- getlevel;qualityassessmentofeconomicsystemsmanagementintermsofenergy- entropicapproach;andriskmanagementofinvestmentprocesses. The proposed mathematical methods and models were tested on the example ofKazakhstan’seconomy,anddevelopedsolutionsandmodelsmaybeusedinany levelandinanyState.Inthecourseofthisresearchwereanalyzedanddevelopedthe ideasofNobellaureatesandleadingscientists—V.Leontiev,Prigogine,G.Odum, E. Odum, Harold Kuhn, John Keynes, Christopher Sims, principle of McKinsey matrixandothers. The reader will find presented here a complex of models used to analyze and forecasttheflowofbudgetfinancialresources.Currentcalculationsandlong-term forecasting of budget indicators are the instruments of realization of strategic de- velopmentplans. Traditional methods of budget program planning are still widely v vi Preface used; they include planning based on rated standards specified by administrative bodiesorbythechangingdynamicsofpreviousperiods.However,thedevelopment of information technologies (IT), the requirements of a market economy, and the highpaceofdevelopmentnecessitatenew,highlyintellectualandpreciseanalytical andplanningmodels. The semantic and frame-based models suggested in this work create the math- ematicalbasis for automatedsystem control.The authorpresents here his seminal development of a mathematical budget model which with mathematical exactness reflects properties and conditions at any budget level. Methods and mathematical modelsforprogramcontrolofbudgetresourcesfocusedonendresultssuchascor- rectplanningareutilizedaccordingtothestrategicplanofsocio-economicdevelop- mentofthenationorregion.Benchmarksarethuscreatedagainstwhichtoestimate the achievability of set goals under certain limitations in budget funds and budget potentialasdeterminedintheprocessofmedium-termplanning.Thisworkdetails aneffectivemethodforestimatingthestabilityofprogrammovementsdetermining systemdecisions,basedonconstructionofLyapunov’sfunction,allowingplanners toestimatetheefficiencyofbudgetmechanismsforresourcedistribution.Theprin- ciplesgoverningthedesignofanintellectualsystemmodelingprogramcontrolof budget resources, and permitting correction of the decision by adjustment of the systemofindicators,areoutlined. Newknowledgeoftenarisesattheintersectionofdifferentscientificfieldswhen well-knownlawsofonescienceareadaptedtoandinterpretedbytheother,opening upaphenomenonforapproachfromanotherangle,andtheresultscanbeexciting. Anexampleisapplicationofthethermodynamicapproachtobusinesssystemman- agement, through mathematicaldescriptions focused on a decrease in entropy and increase in productiveefficiency.The theoreticalapproachproposed by the author becomesevenmorevaluableasnationaltheoryandpracticeinKazakhstanhavenot previously offered developments in the assessment of business system efficiency based on the energy-entropic method. The universality of the proposed method is based on the fact that all systems of the material world—from wildlife and inan- imate nature to technology and production—are arenas of ever-present change in amounts of energy and entropy, and studying this dynamic can give new knowl- edgeofthelawsgoverningthefunctioninganddevelopmentofsuchsystems.This research undertakes, therefore, the scientifically based application of the energy- entropic method to assessment of the economic efficiency of any production pro- cess. Theworkfurthersuggestsmethodsandmathematicalmodelswhichcanbeused to analyze currency purchase and sale, to make forecasts, to determine profitable cycles,andtostructuredecision-makingintheforeignexchangemarket.Aninfor- mationsystemisdevelopedonthefoundationofthesemethodsandisappliedtoa moredetailedanalysisoftheforeignexchangemarket,leadingtopracticalrecom- mendations for second-rank banks on correction of exchange rates. A description is provided of the software, hardware, and instrumentation used in the proposed system. Inordertoprotectthesafetyoffinancialinvestmentsinconditionsofinformation uncertainty,methods and mathematicalmodels are developedto assess innovation Preface vii projects. This is a strategically oriented approach which enables every project to engagethehighestavailableexpertiselevelwithapplicationofadvancedinforma- tiontechnologies.Theroleofrisk-managementandqualitativeprojectassessment becomesevenmoreimportantiftheprojectinquestionisinnovative—anditmust bestressedherethatinnovativenessofdevelopmentisoneofthemainprioritiesof the economic program of our country. A richly complex method of assessment of innovation projects and a graphic model based on such parameters as innovation, competitiveness,andreducednetcostofaprojectfacilitatein-depthassessmentof innovation projects on the basis of absolute positioning. The methods and mathe- maticalmodelspresentedherecanbeusedbyexpertcommissionsofventurefunds, developmentinstitutes,andotherpotentialinvestorstomeaningfullyassessinnova- tionprojects. Investmentinthedevelopmentofeconomicprocessesandsystemsalwaysentails risk.Aninvestmentdecisionthatisnotadequatelyreasonedcancauseadverseeco- nomic consequences for the investor. Making investment decisions becomes even more complicated with the high degree of uncertainty surrounding economic con- sequences of a given investment. The series of mathematical methods and models proposed here represent an integrated methodology for making investment deci- sionsthataimstoreduceriskbymoreobjectivelyestimatingprobabilityofinvest- ment consequences, and thereby to equip the investor with a practical instrument for scientifically-based forecasting. A review of a variety of methodological ap- proaches to studying risk reveals that researchers tend to focus their attention on entrepreneurialrisk—thatistosay,astheobjectofanalysistheyconsiderindivid- ual enterprises, and the subjects of their investigations are statistical variations in stochasticprobabilitydistributionsofallpossiblelossesanddamages.Meanwhile, insufficient attention is given to the investigation of principles of functioning and formsofmanifestationofnonstatisticalrisks,theirinfluenceontheentrepreneurial activityandinteractionwithstatisticalrisks.Thisresearchsuggestsamethodologi- calbaseforcreationofanintegralexpertsystemsupportingcoordinatedinvestment decisionsthattakesintoaccountassessmentandcontrolofprojectrisks. Themethodsandmodelsdevelopedbytheauthorhavebeenbroughttopractical realizationintheformofsoftwaretools.Thesearereliableinstrumentstobeused in solving problems of business forecasting, assessment, and management of the developmentofeconomicprocessesandsystems. I would like to acknowledge contributions to this book made by my assistants I.G. Kurmashev, A.U. Shintemirova, Zh.D. Mamykova, E.S. Kutuzova, V.P. Ku- likova. Itismyhopethatthisworkwillbeofboththeoreticalandpracticalinteresttoits readers,tothebenefitofall. Contents 1 MathematicalMethodsofBudgetModeling . . . . . . . . . . . . . 1 1.1 BudgetasanObjectofModelingandManagement. . . . . . . . 2 1.1.1 BudgetStructureandContents . . . . . . . . . . . . . . 2 1.1.2 MainPrinciplesofBudgetFormation . . . . . . . . . . . 3 1.2 BudgetModels . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1.2.1 ModelsofKnowledgeRepresentationandBudget Functioning . . . . . . . . . . . . . . . . . . . . . . . . 6 1.2.2 SemanticModelofBudgetRepresentation . . . . . . . . 10 1.2.2.1 ObjectDomainModel . . . . . . . . . . . . . . 10 1.2.2.2 ABudgetStructureGraph . . . . . . . . . . . . 14 1.2.2.3 AGraphRepresentingBudgetValues . . . . . . 14 1.2.2.4 AnExampleoftheSemanticModel . . . . . . 17 1.2.3 Frame-BasedModelofBudgetKnowledge Representation . . . . . . . . . . . . . . . . . . . . . . . 18 1.2.3.1 BudgetModel . . . . . . . . . . . . . . . . . . 18 1.2.3.2 BudgetItemModel . . . . . . . . . . . . . . . 20 1.2.3.3 AnExampleoftheFrame-BasedModel . . . . 21 1.3 MathematicalBudgetModels . . . . . . . . . . . . . . . . . . . 23 1.3.1 StaticMathematicalBudgetModel . . . . . . . . . . . . 24 1.3.2 MathematicalModelofInteractionofIncome andExpenditureItems . . . . . . . . . . . . . . . . . . . 28 1.3.3 ModelofBudgetSensitivity . . . . . . . . . . . . . . . . 32 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 2 MethodsandMathematicalModelsofBudgetManagement . . . . 39 2.1 CurrentTrendsinBudgeting. . . . . . . . . . . . . . . . . . . . 39 2.2 CurrentStateofBudgetControlMethodsandMathematical Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 2.3 GeneralConceptoftheProgrammableMethodofBudget MechanismControl . . . . . . . . . . . . . . . . . . . . . . . . 43 ix x Contents 2.3.1 GeneralStatementoftheProblemofBudgetMechanism Control . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 2.3.2 CyberneticApproachtotheDescriptionofBudget Mechanism. . . . . . . . . . . . . . . . . . . . . . . . . 44 2.3.3 SystemApproachtotheMathematicalModelofBudget Mechanism. . . . . . . . . . . . . . . . . . . . . . . . . 47 2.4 MathematicalModelsofBudgetExpenditure . . . . . . . . . . . 50 2.4.1 ConstructionofProgramMovementsforBudget Expenditure . . . . . . . . . . . . . . . . . . . . . . . . 50 2.4.2 AModelofProgramControloftheExpenditureBudget Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 2.4.3 ModelofManagementAdjustment . . . . . . . . . . . . 57 2.4.4 DescriptionofAlgorithmsofBasicProcesses . . . . . . 59 2.5 MathematicalModelsofBudgetRevenuePart . . . . . . . . . . 61 2.5.1 BasicProvisionsDescribingInteractionsofBudget Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 2.5.2 LearningElementsofBudgetSystem . . . . . . . . . . . 62 2.5.3 ModelofCorrectionofBudgetRevenueForecast . . . . 65 2.6 ModelofInformationSystemforProgramBudgetControl. . . . 66 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3 Energy-EntropicMethodsinAssessmentandControlofEconomic Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 3.1 ArgumentsinFavorofApplicationoftheThermodynamic ApproachtoEconomicSystems . . . . . . . . . . . . . . . . . . 73 3.2 Energy-EntropyModelforAssessmentofEconomicSystem Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 3.3 Energy-EntropyApproachastheBasisofSystemEstimation ofProductionManagementQuality . . . . . . . . . . . . . . . . 83 3.3.1 UnitedMeasuringSystemofEnergyResources . . . . . 83 3.3.2 MethodsUsedtoEstimatePowerConsumption (EfficiencyofPowerResourcesUsage)attheEnterprise Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 3.3.3 EntropicEvaluationofProductionEfficiency . . . . . . . 86 3.3.4 UsageofEnergy-SavingCriteriontoAssessProduction ControlQuality . . . . . . . . . . . . . . . . . . . . . . 92 3.3.4.1 AThermodynamicApproachtoConstructing SystemsControllingProductionProcesses . . . 92 3.3.4.2 ComparisonofProductionProcessesinTerms ofEnergy-Entropy . . . . . . . . . . . . . . . . 95 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 4 CurrencyTradingMethodsandMathematicalModels . . . . . . . 99 4.1 CurrencyMarketResearchandManagement . . . . . . . . . . . 99 4.2 MathematicalModelsofEquilibriumExchangeRates . . . . . . 102 4.2.1 ModelDevelopmentandAnalysis. . . . . . . . . . . . . 102 Contents xi 4.2.2 EquilibriumExchangeRate:StatementoftheProblem andWaystoSolveIt . . . . . . . . . . . . . . . . . . . . 104 4.2.3 OptimalAdjustmentofCurrencyExchangeRates . . . . 106 4.2.4 BuildingaBalancedDirectedGraph . . . . . . . . . . . 108 4.2.5 EquilibriumExchangeRates:Problem-Solving Procedures . . . . . . . . . . . . . . . . . . . . . . . . . 111 4.2.5.1 StatementoftheAssignmentProblem . . . . . 111 4.2.5.2 AssignmentProblemasaLinearProgramming Problem . . . . . . . . . . . . . . . . . . . . . 112 4.2.5.3 AssignmentProblemasaTransportation Problem . . . . . . . . . . . . . . . . . . . . . 112 4.2.6 ExperimentalStudyoftheModelofEquilibrium . . . . . 115 4.3 MathematicalProjectionModelsforCurrencyTransactions . . . 119 4.3.1 ForecastProblemofRiskMinimization . . . . . . . . . . 119 4.3.2 ACollocationModelforForecastingOperations ontheCurrencyMarket . . . . . . . . . . . . . . . . . . 121 4.3.2.1 BackgroundoftheCollocationModel . . . . . 121 4.3.2.2 DevelopmentofMathematicalModel forForecastingExchangeRate . . . . . . . . . 122 4.4 InformationDecisionSupportSystemsinCurrencyOperations . 125 4.4.1 DevelopmentofInformationModelforDecisionSupport SysteminCurrencyExchangeOperations . . . . . . . . 125 4.4.2 ISSoftware . . . . . . . . . . . . . . . . . . . . . . . . 127 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 5 MethodsandMathematicalModelsofInnovationProject Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 5.1 CurrentStatusofInnovationProjectReviewandAppraisal . . . 131 5.1.1 InnovationProjectasaSubjectofAnalysisandAppraisal 131 5.1.2 ExistingMethodsandToolsofEvaluatingInnovation Projects . . . . . . . . . . . . . . . . . . . . . . . . . . 132 5.2 DevelopmentofMethodsandModelsforAssessing InnovativenessandCompetitivenessofInnovativeProjects. . . . 138 5.2.1 TheEssenceofInnovationandCompetitiveness . . . . . 138 5.2.2 InnovativenessCriteriaforInnovativeProjects . . . . . . 139 5.2.3 CompetitivenessCriteriaforInnovativeProjects . . . . . 140 5.2.4 MethodandGraphicModelforAssessingInnovativeness andCompetitivenessofInnovativeProjects . . . . . . . . 145 5.3 DevelopmentofMethodsandModelsforAssessingFeasibility andCost-EffectivenessofInnovativeProjects . . . . . . . . . . . 157 5.3.1 BasicStepsinDesigninganInnovativeProject . . . . . . 157 5.3.2 BasicLifeCyclesofInnovationProjects . . . . . . . . . 160 5.3.3 TheMethodandGraphicModelforAssessingFeasibility andEconomicEffectsofInnovationProjects . . . . . . . 166 5.3.4 MethodandGraphicModelforInnovationProject Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . 175
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