This paper presents the outline of a system dynamics corporate model of a representative manufacturing firm to be used to study the feedback dynamics leading to growth, decline and the likelihood of going bankrupt. The model comprises human resources, customers and sales, operations, budget, accounting, cash flow, finance, shares and bankruptcy propensity sectors that are heavily interactive. The driving forces of growth or decline are related to the ability of the firm's management to raise the necessary resources for working capital, capital equipment, human resources training and etc. that will ensure its long term viability. Viability is measured by Altman's 'Z' composite score based on financial ratios that has been shown to reliably indicate the likelihood of bankruptcy. The ability of the firm's management to negotiate bank loans and raise capital through shares offers is governed by the owner's, banker's and shareholder's perceptions of the viability of the firm. The 'Z' score is used as a surrogate measure of this. Trials will be run to investigate effects of management interventions on the feedback dynamics causing growth and decline.'

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Date created

• 1996

Type

• Document

Processing Activity

• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

License

• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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ITEM CONTEXT

Part of

227da936724c4223c5a64764d3922694

Scope and Contents

Part of

ca4810593b2703dcaa087957ab13af91

Scope and Contents

Part of

23d738ba88f8333bc39725f9cb5bd0b8

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Collection

System Dynamic Society Records

Scope and Contents

Collecting area

• This collection is part of the University Archives