A simulation model designed to perform economic, risk, and tax analysis for small busi nesses organized as sole proprie torships is presented. The SERTS model can be run deter ministically or stochastically and has the ability to monitor numerous performance vari ables over the entire planning horizon. The model can be used by managers to rank alternative management strategies for risk efficiency. Risk efficiency is identified with generalized stochastic dominance. Alterna tively it can perform impact analysis on government programs and macroeconomic conditions for use by the public policy process.
Get full access to this article
View all access options for this article.
References
1.
Anderson, J.R., 1974. "Risk Efficiency in the Interpretation of Agricultural Production Research." Rev. of Marketing and Agr. Econ.42; 131-183.
2.
Bawa, V.S., 1982. "Stochastic Dominance: A Research Bibliography." Management Science.. 28:698-712.
3.
Kheir, N.A., 1988. Systems Modeling and Computer Simulation, Vol. 46, Marcel Dekker, Inc., New York.
4.
King, R.P., 1979. "Operational Techniques for Applied Decision Analysis Under Uncertainty." Ph.D. Dissertation, Michigan State University.
5.
Knuth, D.E., 1969. The Art of Computer Programming, Vol. 2. Menlo Park, California, Addison Wesley Pub.
6.
Kroll, Y. and H. Levy, 1980. "Stochastic Dominance: A Review and Some New Evidence ." H. Levy, ed., Research in Finance, JAI Press, Vol.2., pp. 163-226.
7.
Law, A.M. and W.D. Kelton, 1982. Simulation Modeling and Analysis. New York: McGraw-Hill Book Company.
8.
Meyer, J. "Choice Among Distributions." J. of Econ. Theory. 14(1977):326-336.
9.
Mjelde, J.W. and M.J. Cochran, 1988. "Obtaining Lower and Upper Bounds on the Value of Seasonal Climate Forecasts as a Function of Risk Preferences," Western Journal of Agricultural Economics. 13:285-293.
10.
Mitchell, K., 1987. "Interest Rate Uncertainty and Corporate Debt Maturity ." Journal of Economics & Business. 39:101-114.
11.
Naylor, T.H., 1971. Computer Simulation Experiments with Models of Economic Systems. New York: John Wiley and Sons, Inc.
12.
Owens, R. and G. Willinger. , 1985. "Investment Potential of an Individual Retirement Account." Journal of Bank Research16:161-168.
13.
Richardson, J.W. and G.D. Condra, 1981. "Farm Size Evaluation in the El Paso Valley: A Survival Success Approach," American Journal of Agricultural Economics . 63:430-437.
14.
Richardson, J.W. and C.J. Nixon, 1986. "Description of FLIPSIM V: A General Firm Level Policy Simulation Model." College Station, Texas: Texas Agricultural Experiment Station Bulletin, B-1528.
15.
Schnee, E.J. and P. Wiehrs, 1984. "Using the Marital Deduction: A Simulation." Tax Adviser15:76-84.
16.
Thompson, R., 1986. "Understanding Cash Flows: A System Dynamics Analysis ." Journal of Small Business Management24:23-30.
