ECONOMIC SUPPLY & DEMAND
ECONOMIC SUPPLY & DEMAND
ECONOMIC SUPPLY & DEMAND
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26 D-43885.4 Further ExplorationNaturally, no system dynamics model is ever complete. We believe that themodel presented is adequate for the purposes of this paper, but there are manypossibilities for enhancing it. One possibility is to include the effect of availableinventory on demand. The current model assumes that if a product is not currentlyavailable, the consumer will simply place an order and wait for the product to arrive,creating negative inventory, or backlog. You may also wish to include structure forincreasing the capacity of the supplier. This would allow for increased productionwithout raising the per-item cost. You could also experiment with the dynamics of a nondurablegood market (i.e., food). The possibilities are unlimited and it will help enhanceyour modeling skills.