Modeling small and medium-sized businesses performance under resource constraints
Vladimir N. Suyazov, Cand. Sc. (Economics), Associate professor of economics and management
department. Russian International Academy of Tourism (RIAT)
Abstract
In today's resource-constrained environment, small and medium-sized businesses face the need to optimize their factor structure. This study aims to develop and test an economic and mathematical model of the production function, followed by its application to optimize the factor structure. The methodological framework utilizes the classic Cobb-Douglas and CES production functions. These functions were constructed using data from a sample of small and medium-sized manufacturing enterprises in various industries for 2022–2024. Econometric modeling demonstrated that the CES model offers greater explanatory power than the Cobb-Douglas model and accounts for the limited substitutability of labor and capital factors. The obtained parameters of the CES function indicate the dominance of labor and low elasticity of substitution. Testing the model at a metalworking company confirmed the feasibility of reducing total costs by rationalizing equipment utilization and partially reducing the wage bill. The model can be used as an element of digital systems for analysis and management decision support. The practical significance of the study lies in providing management with tools for the justified allocation of resources, planning of production cycles and improving the efficiency of operations in conditions of limited resource capabilities.
Keywords: production function; Cobb-Douglas model; CES function; cost optimization; econometric modeling; small and medium businesses; cost management; production efficiency
For citation: Suyazov V. N. Modeling small and medium-sized businesses performance under resource constraints. Digital Models and Solutions. 2026. Vol. 5, no. 2, pp. 55–70. DOI: 10.29141/2949-477X-2026-5-2-4. EDN: DHPOLU.
