ECONOPHYSICAL SPRING MODEL AND NEWTONIAN MECHANICAL MODEL OF MICROECONOMICAL SYSTEMS OF STOCKS

Back to Page Authors: Mihai Petrov

Keywords: spring constant, gravitational acceleration, econophysical kinetical energy, econophysical potential energy

Abstract: This study refers to the development of the mechanics conception of phenomenological econophysics of microeconomical systems of stocks. One important aspect in the development of this conception is the ABC analysis which is a type of inventory categorization method in which the inventory is divided into three categories: A, B, and C, in descending value, so A has the highest value items, B is lower value than A, and C has the lowest value. When it comes to stock or inventory management, ABC analysis typically segregates inventory into three categories based on its revenue and control measures required: A is 20% of items with 80% of total revenue and hence asks for tight control; B is 30% items with 15% revenue; whereas C is 50% of the items with least 5% revenue and hence treated as most liberal. So, the inventories of both types as the reserve and the sold inventory are classified by the ABC analysis in combination with Pareto distribution. Each type is described by the equation of the microeconomical state of the systems: <Pp>Ntot=K⋅Nart, here <Pp> is the average price of one product; Ntot -the total amount of products of the inventory; -the rating coefficient of the stocks; Nart-the total amount of the articles. This special parameter K that is called the rating coefficient of the stocks means the generating power of turnover from one article during a day, or it could be defined also as the total inventory referred to one article. The suggested mechanical spring model for the inventory shows the oscillation character of the inventory due to of periodical supply with new stocks from the dealers. The important characteristics of mechanical econophysical conception is the notion of econophysical mass of the system of stocks which is the difference between the total selling price of the inventory and the total price from the dealers. The trajectory of the system that has an oscillating form is nothing else but the trend that is developed under the influence of the torrents of customers. Any mechanical action upon the system has the result of the production of energy of two types: kinetical energy and potential energy. Kinetical energy is related to the earned financial resources from the turnovers but the potential energy is related to the stock reserve. Another suggested model is the Newtonian mechanical model that is based on the theories of Newton's classical mechanics. The difference between the spring model and Newtonian one is that the system simply is moving on the complex trajectory which is the trend of the amount of products of the reserve inventory that is changeable with time. The law of conservation of energy combines all form of energy that are related to all types of expenses as well as the assets and liabilities. In general, the movement of the system takes place within the complex field that is the superposition of the fields of conservative forces (assets) and of the dissipative forces (liabilities).