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A microeconomic planning model for the new york times newspaper
Author(s) -
Forman Leonard
Publication year - 1980
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090010304
Subject(s) - economics , newspaper , revenue , earnings , circulation (fluid dynamics) , econometric model , newsprint , econometrics , profit (economics) , operations research , computer science , microeconomics , mathematics , advertising , engineering , finance , business , cellulose , aerospace engineering , chemical engineering
The New York Times model is a large‐scale model which forecasts sales and earnings for the New York Times newspaper. Sturcturally, it is composed of two major blocks; a demand module, and a production, cost and revenue module. The demand module, the heart of the model, is a set of simultaneous nonlinear econometric equations which forecast physical volume, approximately 35 categories of advertising lines and 10 categories of circulation. The second block is recursive and contains roughly 300 equations, some of which are stochastic behavioral equations. This block converts the volume forecasts into paging, newsprint consumption, newsprint distribution and manning requirements. These physical flows are then monetized, using price and wage forecasts, to produce estimates of revenue, fixed and variable costs, and operating profit. This paper summarizes the development of the model, with emphasis on the advertising and circulation model. It should be noted that the structure of the model is constantly evolving. Consequently, emphasis is placed on the conceptual underpinnings of the model not on a detailed presentation of the current structure.