Dynamic Model for Planning and Business Optimization

Abstract

The growing internationalization of markets, backed by the free movement of capital flows, has redefined the past quarter century’s business strategies and tends to continue driving economic and financial integration throughout this century. In this context, firms that aim to stand out in such markets should use the essence of the theoretical apparatus to allocate scarce resources efficiently. This means seeking the best possible benefits to offset the constraints that are inherent to the nature of the business environment. In this turbulent and competitive world, there is an increasing need to devise planning models to address the multiple issues that affect competitiveness, such as: planned rate of return, price adjustment, technological obsolescence, optimal investment path, among others. In an effort to contribute to solutions for this need, this paper proposes a dynamic model based on the Hamiltonian approach that combines the Cobb Douglas function and Pontryagin conditions. The model also suggests valuable improvements for company operations.