Selection of Optimal Technologies for Production of Goods: Space-System Approach

Abstract

Despite the presence of a huge amount of research on various aspects related to the rationale for selection of optimal technologies, spatial aspects have traditionally remained unattended by scientists. Justification for selection of optimal technologies for the production and transportation of good and justification for selection of optimal location and capacity of the corresponding industries are interrelated tasks of the complex problem of optimizing the spatial and technological development of an economic sector within the relevant space. At first, based on the criterion of the availability of factors of production of the corresponding good, attractive production sites are identified and for each of them selection of place-based optimal production technology is justified. The developed systematic approach involves the stage of identifying locally optimal places and technologies of production and transportation for each sales market option according to the criterion of the minimum total costs of producing a good in the volume of demand of the corresponding sales market option and the costs of transporting this good to potential sales markets that form the evaluated market option sales in the amount of their demand. At the final stage, options for potential systemically optimal places and technologies, which are formed from locally optimal places and technologies, are compared. The option of potential systemically optimal locations and corresponding production and transportation technologies with minimal total costs for production and transportation is the best.