Open AccessDiscrete optimal capital investment and financing policies in fishery resource harvesting with reserve area
Author(s) -
M N Alatas,
Toni Bakhtiar,
Farida Hanum
Publication year - 2019
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/567/1/012011
Subject(s) - pontryagin's minimum principle , dividend , stock (firearms) , economics , interest rate , dividend payout ratio , maximum principle , finance , optimal control , dividend policy , mathematical optimization , mathematics , engineering , mechanical engineering
This research discusses a problem in renewable resource (fish) harvesting on single-owner fishery where the dynamics of growth are expressed by system of difference equations. The model involves three state variables (stock of equity, resource stock in reserve zone and unreserved zone) and two control variables (effort rate and dividend payout rate). Discrete Pontryagin maximum principle was applied to obtain optimality conditions which must be satisfied by the variables. Further, the forward-backward sweep method was used to determine the numerical solution of optimal control model. Three scenarios of interest rate applied to find out the response of company in managing harvesting effort and dividend payout rate were investigated.