Cost Function under Complicated Flow

The model of product function and cost function based on micro Input-Output theory plays a very important role in describing the Input-Output of the production department. However, the analysis of the Input-Output systems about non-production makes the using of this model become sort of limited. Therefore, based on the micro Input-Output theory and the theory of production and cost, after making a description of the complicated flow based on the advanced system,this paper will put forward the concepts and features of virtual node,and set up the model of cost function.