MODELING THE PROCESSES OF ADAPTING A COMPANY’S PRODUCTION STRATEGY UNDER MARKET PRICE INSTABILITY

Iryna Skachkova, Oleksandr Skachkov, Valentyna Hatylo

Abstract


Problem Statement. Under conditions of fluctuating market prices for resources and finished products, enterprises require rapid adaptation of their production strategies. The instability of the external environment and price risks complicate the process of managerial decision-making. To improve the effectiveness of strategic management, economic and mathematical modeling is applied. The purpose of the article is to develop an approach to modeling the processes of adapting a company’s production strategy under market price instability, based on the methods of linear programming and game theory, which make it possible to optimize managerial decision-making in situations of risk and competition. The object of the study is the process of adapting the company’s production strategy to changes in market prices for resources and finished products. The methodological foundation is formed by a systems approach to strategic enterprise management, methods of economic and mathematical modeling, particularly linear programming, and elements of game theory. The main hypothesis assumes that the use of economic and mathematical models enhances the effectiveness of the company’s production strategy adaptation by ensuring a rational choice of managerial decisions under conditions of price uncertainty and competitive pressure. Main Material Presentation. The article presents a step-by-step approach to constructing a model for adapting the production strategy using linear programming methods to determine the optimal production structure and game theory tools to analyze the strategic behavior of an enterprise under various market price fluctuation scenarios. The originality of the research lies in combining linear programming methods and game theory to model the process of adapting the production strategy. The practical significance of the study is determined by the possibility of applying the proposed approach to increase the effectiveness of strategic management of enterprises under market price turbulence. Conclusions and Prospects for Further Research. The proposed linear programming models and elements of game theory help optimize the production structure and predict enterprise behavior in a competitive environment. Promising directions for further research include integrating adaptation models with scenario planning, risk management, and digital decision-support tools.

Keywords


adaptation of production strategy, economic and mathematical modeling, linear programming, game theory, strategic management

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DOI: https://doi.org/10.32620/cher.2025.4.13

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