I'm interested in any good information on modelling markets and
transportation costs. I think this a problem that can be solved using
network functions, but I'd like to know more about the factors involved
in such a problem. For example, suppose you had 100 cities that either
bought or sold widgets and there were various transportation routes
between the cities with some variable cost associated with moving the
widgets. How would you go about designing a program that could tell you
the current price of widgets in Gotham? If you added a new
transprotation route betwen cities or increased the carrying capacity of
one or more routes, how would that affect the price in Gotham then?
Assume that there is a variable supply at the producing centers, and in
some cases the can produce more than they can sell, while in other cases
they can't produce enough to keep up with demand. I was thinking that it
might be like water flowing into and out of a network of pipes. There
are inflow and outflow points, there is pipeline capacity (that may or
may not be maxed out), and I guess if you add reservoirs at various
points in the network you would affect the response of the system to
changes in demand.
Anyway I'm just trying to get a grip on this sort of problem, so if
anyone knows of examples or what parameters are involved, or even how to
go about modeling such a process, I'd be interested in learning more.
- Bill Thoen
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