THE GENERAL CONCEPT OF PLANNING AND EVALUATION OF THE INVESTMENT PROGRAM EFFECTIVENESS IN THE VERTICALLY-INTEGRATED PRODUCTION STRUCTURE, CONSIDERING THE SYNERGY PROJECTS

S. A. Annikova (annikova-s@yandex.ru)

Russian Journal of Industrial Economics, 2015, issue 3

Abstract: The investment process in a vertically integrated production structure is briefly discussed. A particular attention is paid to the planning and evaluation of the investment program. The paper develops the idea that when evaluating the effectiveness of the investment program, the synergy projects at different levels of integration have to be considered The basis of this synergy is the impact of projects on each other when the value of the final products is created during subsequent stage of the technological process. In the implementation of projects at different levels of integration the technical and economic parameters of the chain experience different changes, influencing not only the specific business with a vertically integrated structure, but also other integration levels. It is proposed to estimate the synergy by the of overall internal profit at different variants of investment decisions. For the calculation it is necessary to simulate the technological chain of production of the final product. The techno-economic model can be constructed with the help of software based on mathematical economics. For better identification and recording of synergy in planning the investment program the author proposes to separate projects which influence the manufacture cost as a special kind, while projects that do not affect the cost,are included in the investment program as the simple sum of their effects.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ach:journl:y:2015:id:192

DOI: 10.17073/2072-1633-2014-3-82-89

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