Identifying the influence of the distance factor on the level of transaction costs at agricultural processing enterprises

Authors

DOI:

https://doi.org/10.15587/1729-4061.2023.289046

Keywords:

transaction costs, measure of distance, agro-industrial enterprises, modeling, technological and mathematical foundations

Abstract

The object of this study is the transaction costs of agricultural processing enterprises that operate in cooperation with various participants: suppliers of raw materials, buyers of finished products, research enterprises, and other entities. Transaction costs arise at all stages of activity, from the preparation of an agro-processing project to the achievement of the final result.

For this, a simulation modeling system is proposed, including an optimization model that allows estimating the quantitative components of transaction costs. The process of transactions between various participants such as suppliers, customers, and partners is studied using simulation models. To demonstrate the applicability of this model to the example of agro-industrial enterprises, some parameters of transaction costs are modeled when choosing suppliers of raw materials at recommended intervals.

The feasibility of simulating the costs of establishing a relationship with a new partner in the range of 0.5–0.6, and the benefits in the range of 1.05–1.10 has been determined. It has been found that transaction costs associated with raw material suppliers can be saved by 40.0 % in the next 3 years through optimization and digital capabilities.

The presented approach can be useful for a deeper study of the digital environment’s impact on the level of transaction costs in agricultural processing enterprises. Such an analysis will reveal potential opportunities for optimization and cost reduction, which is important for improving the efficiency and competitiveness of these enterprises

Author Biographies

Fuad Ibrahimov, Public Association “Center for Socio-Economic and Environmental Research”

Researcher

Ulviyya Rzayeva, Azerbaijan State University of Economics (UNEC)

PhD on Mathematics, Associated Professor

Department of Digital Technologies and Applied Informatics

Rasul Balayev, Azerbaijan State University of Economics (UNEC)

Doctor of Science in Economics, Professor

Department of Digital Technologies and Applied Informatics

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Identifying the influence of the distance factor on the level of transaction costs at agricultural processing enterprises

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Published

2023-10-31

How to Cite

Ibrahimov, F., Rzayeva, U., & Balayev, R. (2023). Identifying the influence of the distance factor on the level of transaction costs at agricultural processing enterprises. Eastern-European Journal of Enterprise Technologies, 5(4 (125), 55–62. https://doi.org/10.15587/1729-4061.2023.289046

Issue

Vol. 5 No. 4 (125) (2023): Mathematics and Cybernetics - applied aspects

Section

Mathematics and Cybernetics - applied aspects

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Copyright (c) 2023 Fuad Ibrahimov, Ulviyya Rzayeva, Rasul Balayev

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