022339 Chantuk T;Paichit P;Pasunon P (General Business Management Dep, Faculty of Management Science, , Silpakorn University, Email: firstname.lastname@example.org) : Application of econometrics methods in the development of model for maximum profit determination and profit level for the investment decision in Thailand's housing estate industry. Far East J mathl Sci 2016, 100(10), 1675-93.
This research focuses on the calculation of maximum profit and profit level by using econometrics models to estimate the most appropriate revenue and cost equation. This quantitative research provides cost and revenue assumption using inductive method and develops the total revenue (TR) equation and the total cost (TC) equation by the development of econometric models for non-linear variables in the form of polynomial regression equation, which is adjusted to alleviate the multicollinearity effect. Thereafter, a marginal revenue (MR) equation and a marginal cost (MC) equation can be calculated accordingly by the first derivative of the total revenue and the total cost equation to analyze the maximum profit for the housing estate industry and also to calculate other profit areas in order to facilitate the housing estate developers for the construction decision for sell at the housing estate developers for the construction decision for sell at the maximum profit level, and also providing other profit information to be used as supportive information for an investment decision. The research results show that 240 units of houses constructed in the project earned 94.4 million baht of profit according to the model, and the number of houses that should be constructed to obtain the maximum profit level was 100. The total selling period is at 17.59 weeks. However, the developers had to continue the house construction in the vacant space for sell although the maximum profit was already estimated. Therefore, the profit amount can be segregated into two areas: first, R1 was the profit area before reaching the maximum profit level, which was 47.190 million baht; and R2 was the profit area after reaching the maximum profit level which was 47.210 million baht. Though R2 profit was slightly higher than R1 profit, the profit area experienced a diminishing return to profit as the construction of houses went on. This reflected an economic principle with respect to diminishing utility since the profit area was already beyond the maximum profit level. However, R2 can be - 37 - considered as an area of profit opportunity according to the model for maximum profit determination and profit level for the investment decision in Thailand's housing estate industry.
1 illus, 4 tables, 26 ref