Analysis of Investment in Technology Development and Systems with Variable Structure
Constantly increasing demands for natural resources such as energy, materials, water, etc. lead more and more decision makers to consider the natural resources as constraints for economic growth [Verkhovsky and Volin 1965, Brookes 1973, Rausser 1974, Roman 1974, Magdoff 1976]. There are many interrelated management problems associated with investment in research and development of technology and/or conservation programs. However, most of these problems deal directly with the evaluation of capital investment in technology development and conservation in terms of criteria related to economic growth. In our study we consider two stages simultaneously: first, investments which change resource consumption by subdivisions, and second, improvements in efficiency which are related to economic criteria. This method enables the decision maker to systemically evaluate capital investments in technology developments in the case where a number of subsystems are competing for the same resources. The model can also be used to determine the optimal allocation of capital into resource development. Since the objective of this paper is the development of a methodology, no specific technologies are being discussed.
KeywordsTechnology Development Budgetary Constraint Capital Investment Resource Consumption Economic Criterion
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