Price setting with supply/demand imbalance

[Panichel]

Hi,
I have developed a simple model of soybean supply/demand dynamics. The model purpose is to model price and supply response to an exogenous demand. Teoretically they should match the reference modes, but its not the case. I have mainly three problems:

1. Stock oscilations should be annual and not during years. I think its a problem on how time and time step is accounted. Normal, stocks reduce during the year until the next harvest is performed, growing again an the begenning of each year. Can you please give me some advise on this problem?

2. Prices levels are two high. May be related to the stock problem?

3. Demand is lower than in the reference mode due to the effect of price. How can I endogenise demand? I have tried to use the same approach as for planted land but its not working. Do I need an initial shock? I have test that on the model on the right.

I attatch the model just in case.
Thanks you a lot !! This has trughled me the whole week !!
Luis

PD: How can elimitane the units error problem when expresing external data as look up functions depending on time?

[Edited on 7-9-2010 by Panichel]

[Edited on 7-9-2010 by Panichel]

[Administrator]

I would fix the dimensional errors first. These could easily be the cause of your problems.

You could also take a look at the attached. I've corrected the dimensional errors (but could be wrong), and started a calibration. But all my values are pure guesses, but maybe it will help a little.

Tony.

[Edited on 9-7-2010 by Administrator]

[Panichel]

Hi,
Thanks for the units correction. Now the domensional errors are correct, but however, I need to reduce oscilation to a year to year basis. Normaly soybean stock should oscilate from year to year, as soybean stock is reduced throught out the year due to soy consumption, until the next harvest is done, increasing stock. I need a 1 year laged response between planted and harvested area (as soybean is supplied a year after planting) and 1 year lagged between price and expected price. In the current model this oscilation is on a nearly 5 years period.
How can I reduce oscilation period?? Is that related to the calculation of relative price from an initial value? How can I calculated relative price from year to year (instead betwen current and initial)?
Thanks for your help
I post the model again with some adjustments !

[Edited on 7-12-2010 by Panichel]

[bob@vensim.com]

For the harvesting you can use a DELAY FIXED function, and then use the formulation you have for harvest for the planting. This is probably not the right thing to do for the price though, if anything drives this it is the current stock and expectations of harvest.

[Panichel]

right. Thats what I'm trying to model. The expectation on harvest is thought based on the planted area decision, that in turns depends on the expected price at the harvesting time.
So, I think I am not understanding the difference betwen what you say and what the model does. Please can you comment on this?

[tomfid]

I think what Bob's suggesting is adding an explicit stock of planted area, and forming harvest expectations from that, as in the attached.

Note that I didn't use DELAY FIXED for the harvest, but you could replace my 1st order equation for soybean harvested area with
=DELAY FIXED(planting,time to harvest,soybean planted area/time to harvest)

This still isn't really "right" but I hope it's helpful.

There are probably some good examples of this kind of formulation if you look at the SD literature.

Tom