A dynamic model for a commodity market applying systems technology

In this paper, a commodity market dynamic model is introduced for analyzing the market and researching investment policy. The model consists of a price function, investment function and production function. The price function describes the relation between demand-supply ratio and the price for a unit amount. The investment function describes how investors decide the investment policy. Finally, the production function describes a production schedule and production line dynamics. The model is examined through comparing simulation results with actual commodity market swings. The results show the possibility to express the dynamics of commodity market by simple equations.