Discrete optimal capital investment and financing policies in fishery resource harvesting with reserve area

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 contr...

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Bibliographic Details
Published in:IOP conference series. Materials Science and Engineering 2019-07, Vol.567 (1), p.12011
Main Authors: Alatas, M N, Bakhtiar, T, Hanum, F
Format: Article
Language:English
Subjects:
Difference equations
Financing
Fisheries
Maximum principle
Optimal control
Optimization
Renewable resources
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Summary: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.
ISSN:1757-8981
1757-899X
DOI:10.1088/1757-899X/567/1/012011