Modelling Duopoly with Consideration of Logistics, Limited Production and Advertising

Management of competitiveness of a production enterprise is connected directly with the issues of formation of competitive strategies and needs a comprehensive analysis of those components of the enterprise activity, which could become a basis of formation and strengthening of stable competitive advantages. The existing models do not take into consideration the market infrastructure and, that is why, are poorly suited for the use in the practical work of a firm in the competitive market. The article develops a dynamic model of strategic interaction of the firms that deal with production, storage and sales of goods of everyday use - in the duopoly market with consideration of logistics, limited production and advertising. The model allows taking into consideration the interconnection of the current state of the market and current production facilities of enterprises. The conducted analysis of the strategies of competitive firms detected a considerable influence of the advertising campaign upon results of economic activity of duopolists.