S. N. Avvakumov

Profit maximization problem for Cobb–Douglas and CES production functions

Production functions are used to model the production activity of enterprises. In this article, we formulate the necessary and sufficient conditions of strict concavity for Cobb–Douglas and constant elasticity of substitution (CES) production functions. These conditions constitute the theoretical foundation for analyzing the profit maximization problem. An optimal solution is constructed in analytical form and some of its properties are described. Three approaches to solving the profit maximization problem are considered and their equivalence is established. For a Cobb–Douglas production function we investigate the dependence of the maximum profit on elasticity coefficients. A similar analysis is carried out also for the CES production function. The article presents a systematic and detailed discussion of the relevant topics. The topic is related to the investigation of innovation activity of enterprises. The theoretical results and the explicit analytical relationships provide a theoretical and algorithmic base for the “Planer” optimization software—a useful product for the analysis of the production activity of enterprises modeled by production function tools.

Some algorithms of optimal control

In the first part of the paper, we describe the method of continuation with respect to a parameter in solution algorithms for nonlinear boundary value problems in ordinary differential equations. We present results of numerical experiments solving boundary value problems, including boundary value problems arising in optimal control theory. The parameter variation scheme (the continuation method) can be considered as a special development and modification of the classical Newton method. The basic idea of this approach can be shortly formulated as reducing a boundary value problem to a Cauchy problem. Regarding a Cauchy problem as an elementary operation, we arrive at a compact description of the algorithm of solving a boundary value problem by means of the method of continuation with respect to a parameter. The interest in this research area is related to studying numerical algorithms of solving the linear time-optimal control problem and is aimed at boundary problems of the maximum principle. We have developed a program BVP, which solves in the Maple environment regular boundary value problems for ordinary differential equations, some boundary value problems of the maximum principle arising in optimal control, problems of finding periodic solutions and limit cycles, and so on. In the second part of the paper, we describe a simple algorithm of constructing attainability (controllability) sets in plane linear controlled systems and give some examples of using it. The algorithm is based on parametric equations of the boundary of a plane strictly convex compact set given by its support function. This approach allows one to construct two-dimensional projections of attainability sets for multidimensional linear controlled systems. In the third part of the paper, we present sufficient optimality conditions for nonlinear controlled systems in terms of constructions of the Pontryagin maximum principle.

Resource allocation problem in a two-sector economic model of special form

In the present paper, we study the resource allocation problem for a two-sector economic model of special form, which is of interest in applications. The optimization problem is considered on a given finite time interval. We show that, under certain conditions on the model parameters, the optimal solution contains a singular mode. We construct optimal solutions in closed form. The theoretical basis for the obtained results is provided by necessary optimality conditions (the Pontryagin maximum principle) and sufficient optimality conditions in terms of constructions of the Pontryagin maximum principle.