As input ows of secondary raw materials show high volatility and tend to behave in a chaotic way, the identification of the main drivers of the dynamic
behavior of returns plays a crucial role. Based on a stylized productionrecycling system consisting of a set of nonlinear difference equations, we explicitly derive parameter constellations where the system will or will not
converge to its equilibrium. Using a constant elasticity of substitution production function, the model is then extended to enable coverage of real world
situations. Using waste paper as a reference raw material, we empirically estimate the parameters of the system. By using these regression results, we are able to show that the equilibrium solution is a Lyapunov unstable saddle
point. This implies that the system is sensitive on initial conditions that will hence impede the predictability of product returns. Small variations of production input proportions could however stabilize the whole system. (authors' abstract)
| Identifer | oai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:4127 |
| Date | 01 May 2014 |
| Creators | Nowak, Thomas, Hofer, Vera |
| Publisher | Elsevier |
| Source Sets | Wirtschaftsuniversität Wien |
| Language | English |
| Detected Language | English |
| Type | Article, NonPeerReviewed |
| Format | application/pdf |
| Relation | http://dx.doi.org/10.1016/j.ejor.2013.11.039, http://www.elsevier.com, http://epub.wu.ac.at/4127/ |
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