Theory of Production and Cost

by Günter Fandel

Overview

Production theory and the theory of cost both belong to the central areas of business administration, for all considerations concerning the economic organization of industrial manufacturing processes start from these. Two developments in the past 30 years have had a considerable influence on the structure and the concentration on points of emphasis in this book. I am referring to findings from KOOPMANS' activity analysis and to the formulation by GUTENBERG of a production function concept that focuses on industrial production processes. Activity analysis has made it possible to develop, from a uniform approach, different types of production functions which describe the concrete principles of production in the productive sector of a business enterprise; this has created a common basis for all production concepts in business administration. The Gutenberg Production Function with its different kinds of adjustment to a changing output has opened up a flexibility to theoretical and practical considerations that gave rise to a large number of additional studies in this area. Considerations in cost theory were in particular need of considerable extensions in the direction of cost minimal combined adjustment processes. By means of the organization of its contents, this book will take both approaches into due account. In that way, it is vastly different from other books dealing with the same subject. As a matter of course, traditional analytical methods and ways of thinking also constitute a large part of the book.

Product Details

ISBN-13:	9783642768149
Publisher:	Springer Berlin Heidelberg
Publication date:	12/23/2011
Edition description:	Softcover reprint of the original 1st ed. 1991
Pages:	405
Product dimensions:	6.69(w) x 9.61(h) x 0.03(d)

Table of Contents

1: Introductory Survey of the Production Field.- I. Integration of Production into Business Administration.- 1. The Notion of Production.- 2. Institutional Division of Business Administration.- 3. Functional Division of Business Administration.- II. Basic Conditions and Tasks of Entrepreneurial Activity.- III. Delimitation of the Research Subject.- IV. Object of the Theory of Production and Cost.- V. Different Fields of Production Planning.- 1. Planning the Production Program.- 2. Choice of the Production Procedure.- 3. Organizing the Productive Potential.- 4. Planning the Production Process.- VI. Production and Management Planning.- VII. Summarizing Survey.- One Production Theory.- 2: Fundamentals of Production Theory.- I. Survey of Developments in Production Theory.- 1. Description of Productive Principles by Technologies.- 2. Types of Production Functions.- 3. Empirical Validity of Production Functions.- 4. Shastic and Dynamic Extensions.- II. Basic Elements of Production.- 1. Products, Production Factors, Goods.- 2. Activity and Technology.- III. Technologies.- 1. General Assumptions.- 2. Special Forms of Technologies.- 3. Production Matrix and Goods Restrictions for Linear Technologies.- IV. The Efficiency Criterion.- V. Production Functions.- 1. Deduction of the Production Function from Technology.- 2. Relations between Factors and between Products.- 3. Basic Notions of Production Theory for Characterizing Production Functions.- 3: Substitutional Production Functions.- I. Marginal Rate of Substitution, Complementarity, Substitutional Elasticity.- II. The Classical Production Function (Classical Law of Returns).- III. Neoclassic Production Functions.- 1. The Cobb-Douglas Production Function.- 2. The CES Production Function.- 3. Extensions of the CES Production Function.- 4: Limitational Production Functions.- I. Leontief Production Function.- 1. Considerations Based on a Single Production Process.- 2. Investigation of Cases with more than One Production Process.- II. Gutenberg Production Function.- 1. Basic Assumptions and Fundamental Considerations.- 2. Different Kinds of Adjustment as Parameters of Action.- 3. Production Relations between End Product Quantity and Use of Potential Factors for Different Kinds of Adjustments.- 4. The Concept of the Consumption Function for Consumption Factors.- 5. Production Relations between End Product Quantity and Consumption Factor Input for Different Adjustments.- 5: Some Further Approaches in the Field of Static-Deterministic Production Functions.- I. Introductory Remarks.- II Heinen Production Function.- III Engineering Production Functions.- 1. Development and General Formal Description of Engineering Production Functions.- 2. Engineering Production Functions for Single Aggregates.- 3. Engineering Production Functions for Branches of Industry.- 4. Engineering Production Function for a High-Voltage Line.- 5. Engineering Production Function in Aircraft Construction.- IV. Pichler’s Concept of Throughput Functions.- V. Kloock’s Input-Output-Analysis Approach.- 6: Dynamic and Shastic Extensions in the Field of Production Functions.- I. Preliminary Remarks.- II. The Dynamizing of Production Functions.- 1. Points of Contact between the Static and the Dynamic Approach.- 2. Reasons for a Dynamic Approach.- 3. Dynamizing Forms.- III. Time-Dependent Technologies Resulting from Innovations - Autonomous Technical Progress.- 1. Description of Time-Related Input-Output Relations for Leontief Processes.- 2. Technical Progress in the Gutenberg Production Function.- 3. Krelle’s Dynamic Production Function.- IV. Inclusion of Learning Processes in a Theory of Production - Induced Technical Progress.- 1. A Theoretical Concept of Learning Processes in Manufacturing.- 2. Inclusion of Learning Processes in Different Types of Production Functions.- V. Küpper’s Dynamic Production Function.- VI. Considering Uncertainties of Production by Shastization of the Production Function.- VII. Model of a Shastic Production Function on the Basis of the Classical Law of Returns.- 7: Empirical Validity of Production Functions.- I. Different Approaches.- II. A Formal Framework for Analysing the Empirical Validity of Production Functions.- III. Evaluating the Empirical Validity of Specific Production Functions.- 1. The Classical Law of Returns.- 2. The Leontief Production Function.- 3. The Gutenberg Production Function.- 4. The Heinen Production Function.- 5. The Kloock Production Function.- 6. Engineering Production Functions.- 7. Summary.- IV. The Empirical Significance of the Gutenberg Production Function in the Light of Practical Research.- 1. Chances and Limitations of the Gutenberg Production Function.- 2. Lines of Empirical Determination.- 3. Results of Empirical Studies.- Two Cost Theory.- 8: Fundamentals of a Cost Theory and Minimal Cost Combination.- I. Transition from Production Theory to Cost Theory.- II. Costs and Cost-Influencing Factors.- 1. The General Notion of Cost.- 2. Cost-Influencing Factors.- III. Special Notions of Cost.- IV. The Selection Problem in Cost Theory: The Minimal Cost Combination.- 1. Notion and Content of the Minimal Cost Combination.- 2. Minimal Cost Combination for Substitutional Production.- 3. Minimal Cost Combination for Linear-Limitational Production with a Single Production Process.- 4. Minimal Cost Combination for Linear-Limitational Production with Several Production Processes.- V. Minimal Cost Combination for Dynamic Considerations of Production and Cost.- VI. Historical Contributions to Cost Theory.- 9: Cost Functions on the Basis of Special Production Functions.- I. Deriving a Cost Function from a Production Function.- II. Cost Functions on the Basis of the Law-of-Return Production Functions.- III. Cost Functions of the Neoclassic Production Functions.- IV. Cost Functions for the Leontief Production Functions.- V. Cost Functions on the Basis of the Gutenberg Production Function.- 10: Combined Processes of Adjustment for Several Functionally Identical Aggregates.- I. Approaches to Combined Adjustment in the Literature.- II. Adjustments of Time, Intensity, and Quantity of Aggregates that Differ in Costs.- 1. Formulation of the Problem and Assumptions.- 2. The Solution Approach of Pre-Optimized Marginal Costs Functions.- 3. The Solution Method of Dynamic Programming.- III. Combined Adjustment Processes without Adjustments of Time.- 1. Preliminary Remarks.- 2. Adjustment Processes in Cases of Constant Output Intensities.- 3. Adjustment Processes in Cases of Intensity Splitting.- References.- Name Index.