The Viscoelastic Sale Event

Seeing Innovative Enterprise as an Energy Dissipating System

During a Consumer Product Interaction (CPI) it is the relationship of perceived value with the price of goods that determines whether a sale event will occur.  We can now propose a means to interpret the behaviour an innovative enterprise based upon on an equivalence of enterprise activity with the mechanics of the viscoelastic material.

Typically, models of viscoelastic behaviour are constructed from elemental elastic springs and viscous dashpots and their configuration and individual properties of stiffness and viscosity are set to simulate a specific balance of energy storage and dissipation.  The figure here shows the combination of springs and dashpots in the Standard Linear Viscoelastic Solid.  SLIVS-spings-and-dashpot
 stochastic-viscoelastic-array stochastic model of a viscoelastic material can replicate precisely the mechanical behaviour of the above standard linear viscoelastic solid.  In this stochastic alternative the yellow bound elements fail when the energy in the connected spring reaches a critical threshold.   In the standard viscoelastic solid, energy dissipation is a continuous process.  The stochastic alternative is therefore better suited for use in the commercial domain to simulate the sale events that comprise the discrete transactions of an enterprise (see the CPI page for further background).

In the innovative enterprise, investment is considered as the equivalent source of the energy that creates value, which is conserved in the products, services and systems of the organisation. Quintessentially, enterprise investment in innovation is dedicated to the creation of favourable CPIs, raising the Value Surface whereupon a sale-event will occur and income will be remunerated to the enterprise in exchange for the newly purchased products.

If the innovative endeavours of the enterprise are deployed and “stored” as a potential in value created, then the equivalent of energy dissipation is assumed to occur through the sale of the company products.  In this way, the viscoelastic analysis provides a means to uncouple the Innovative and Replicative activities that are the two fundamental components of the Labour Theory of Value Creation.

 investment-and-the-value-surface For an enterprise simulation that is analogous to the stochastic viscoelastic analysis, investment is dedicated to creating the perception of value through a number of CPIs, so that these individual consumers may incrementally approach a threshold for a sale event to occur.  Let us then start with a nominal 100 CPIs that result in a Value Surface as shown here.  The effect of the invested capital is to raise the Value Surface.  Each of these 100 lines will appear at a different height, marking differing individual perceptions of value, and each of the lines in this model is tethered through a linkage that represents the properties of the CPI.  This CPI linkage remains dormant until the height gained by the corresponding line reaches a threshold determined by the price of the goods.  The linkage then separates, representing the occasion of a sale event as is apparent in CPI unit 2.  The difference between (a) and (b) here is due to the increasing amount of investment into the enterprise.  As perceptions of value will be subject to perturbation by any number of external influences, individual CPI units may rise or fall as time proceeds.The aggregate result of effective investment however, is to increase height of the Value Surface overall, so that the occurrence of a sale event within the population of consumers becomes more likely.

In this way we are able to develop an analogy with the deformation of a viscoelastic material and the elevation of a product Value Surface by an innovative enterprise.  This enables the analysis of the enterprise performance as an energy dissipating physical system.



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