Usage of Production Function in Linear Economy

Abstract

In this study, the Cobb Douglas production function was built in order to investigate the linear economy, the redesign of intralogistics in a company. Authors have investigated a production function that describes the connection between the production of liquids, energy efficiency and water usage based on the logistic processes. The authors were able to build and simplify it to a linearized Cobb Douglas equation. With the help of mathematical-statistical analysis, the authors found that energy efficiency and water usage have a negative effect on production due to European legal considerations and logistic improvement could help in the solution of the problem. Then, the differences between the linear economy and the circular economy were examined. As a summary, a SWOT analysis exploring the differences was prepared.