Keywords: strategic planning, technology parameters, production function, technology effect, technology selection, operational planning, modelling
A planning model at a broad level incorporating the effect of technology selection decisions
The current and rapid technological progress has had a dramatic impact on the operations of firms which are now becoming increasingly technology driven. Consequently, it has now become necessary to capture and incorporate this impact into operational planning models of economic and industrial activity. This paper addresses this felt need and builds a new model to capture the effect of technology on the operational aspects of economic and industrial units, in specific terms, and build it into planning models. This is effected through a technology variable, introduced into the production function, which is a quantitative measure of the technology level employed in the unit, and which directly impacts the productivities of the resources used by the unit. The concavity properties of the function are examined, as also its implications on the planning strategies of the unit or firm, with direct implications in the strategic planning and technology selection processes.