Auxiliary Variable - Index Rate of Decay or Growth of the Pr

CLAUDIO · Post by **CLAUDIO** » Thu Oct 16, 2008 1:46 am

Hi everyone.

I am trying to sketch an auxiliary variable to get an index in terms of percentage that can show me the rate of Decay or Growth of the Price in an year ‘y’ in relation to Price and Demand in year 1:

For instance:

Demand in year 1 = 500 widgets
Widget Price in year 1 = 10$
Hence, the Widget Price/Demand is 0,02 $/Demand
Reference number 0,02 $/Demand / 0,02 $/Demand = 1 dimensionless

Demand in year 2 = 600 widgets
Widget Price in year 2 = 11$
Hence, the Widget Price/Demand is 0,018 $/Demand
The rate of Price Growth in year 2 in relation to the reference Widget Price/Demand in year 1 is 0,018 $/Demand / 0,02 $/Demand = 0.9 dimensionless

Demand in year 2 = 850 widgets
Widget Price in year 2 = 14$
Hence, the Widget Price/Demand is 0,016 $/Demand
The rate of Price Growth in year 3 in relation to the reference Widget Price/Demand in year 1 is 0,016 $/Demand / 0,02 $/Demand = 0.82 dimensionless

And so on…

Somebody have some suggestion how I could sketch an auxiliary variable for getting that??

Claudio

bob@vensim.com · Post by **bob@vensim.com** » Thu Oct 16, 2008 10:14 am

Just use

price demand ratio = price/demand ~ $*Month/(Widget*Widget)
initial price demand ratio = INITIAL(price demand ratio)
current to old ratio = price demand ratio / initial price demand ratio

note the funny units on price demand ratio - I am not sure what it means.

CLAUDIO · Post by **CLAUDIO** » Mon Oct 20, 2008 3:43 pm

Dear Bob

Thanks for your support.

Rgrds

Cláudio