Effects of marketing, bank loan and credit debt on consumer's spending. Mathematical models based on an engineering concept

Document from the year 2019 in the subject Engineering - Industrial Engineering and Management, , course: Business, language: English, abstract: The main objective of this study is to utilize an engineering concept in order to propose a mathematical model to correlate consumer spending, utility and income. The difference between the proposed model and the Keynesian consumption theory is explained by the fact that the Keynesian consumption theory takes into account the consumption of costumers with no income. The effects of marketing, bank loans and credit debt on consumer spending are also analyzed using the general equation of transport phenomena and mathematical models are presented for the first time. Based on a case study, marketing has increased the utility (driving force) by 61%. Taking into account the theory of consumption smoothing, bank loans also provide the consumer with additional spending power by decreasing the resistance for consumption. In case of excessive debt, customers might spend the money only to buy the 'utility' in order to be able to repay the debt. In this situation, the effects of debt are described in the proposed engineering model as a decrease in income (extra resistance to spend money).

Zin Eddine Dadach obtained his Bachelor's degree in Refining and Petro-chemistry from the Algerian Institute of Petroleum in 1980. He received his Master's degree in Chemical Engineering from Stevens Institute of Technology (Hoboken, N.J.; USA) in 1984. In a pioneering research study, experimental data for the absorption rates of CO2, H2S, and a mixture of both in hindered amine, 2-amino-2-methyl-1-propanol (AMP) aqueous solutions (0.03 M, 0.1 M, 0.2 M and 0.3 M) were investigated for the first time. Dr. Dadach obtained his Ph.D. degree in Chemical Engineering from Laval University (Quebec, Canada) in 1994. In the dissertation work, Markov chains and Monte Carlo technique were used to stochastically simulate glucose yield during cellulose acid hydrolysis by using model compound cellobiose and cotton crystallinity data. Simulation results were compared to experimental data. He worked in an organic materials department at the Osaka National Research Institute (Osaka, Japan) for two years where he developed a FORTRAN program on Markov analysis of DNA sequences of psbA genes of Synechocystis PCC 6803 in order to determine which genes might be responsible for divergent behavior of transcription in response to light intensity. Since he joined the Higher Colleges of Technology (Abu Dhabi, UAE) in 2005, Dr. Dadach has developed active learning strategies to enhance the intrinsic motivation of students. In a recent published article, he presented a new tool to quantify the effects of an active learning strategy on the motivation of students. He supervised a number of student's final industrial projects including Stripper High Differential Pressure, Sea water back pressure tower foaming, Effluent system salt formation, Carbon Capture and Storage strategies, Hysys simulation of chemical processes, and exergy analysis of power generation plants