Integration of business function models into an aggregate enterprise systems model

Introduced are methods that combine models of distinct business functions into an aggregate model of an enterprise system to assist management’s strategic decision making. Models of individual business functions are reviewed, and equations quantifying relationships presented. Using methods of system theory, including block diagrams, non-dimensionalization, and state equation methods, these business function sub-models were assembled into a composite enterprise systems model. The formulated aggregate model is illustrated with industry examples for tire companies; nonetheless the aggregate model can be used to assess other industries. Values of parameters for the system model were determined from data obtained from annual reports of publicly owned companies. Simulations closely matched the companies’ published performance over ensuing years. The developed aggregate enterprise model has significant predictive capabilities for modern corporations.