What do we know about cycles? How does this concept relate to our lives and what role does it play in our environment? Of course, we all know what it is. But here are the types of cycles, this is a more interesting question.
What is a cycle
This is a general concept that has a common use in various fields of human activity. A cycle is basically a set of activities.
If we characterize it as a generalized term, then it is a complete sequence of functioning of the material and technical components of an object or phenomenon in space and time. This is a kind of circle of certain events that can be repeated with or without periodicity.
To understand this concept in more detail, it is necessary to consider the main types of cycles. This term is used in various fields of science and technology. For example, it can be found in mathematics, economics, programming, physics, biology, geography, literature and many others.
What are cycles
Today we can distinguish the following species:
1. Economic:
-organization lifecycle;
- product life cycle;
- production;
- operational;
- financial;
- technological;
2. Historical.
3. Cycle in programming.
4. Math.
5. Thermodynamic.
6. Vital.
7. Menstrual.
8. Demographic.
9. Musical.
10. The cycle of stories.
11. Machine cycle.
12. Educational.
13. Geographic (solar, lunar, sedimentary cycles).
Let's consider each of the types in more detail.
What is the business cycle
Most economic indicators are dynamic. They never stand still and change all the time. Among some of them, you can notice the cyclicality, that is, they either rise, then fall again. These fluctuations are called the business cycle.
It is worth noting that the economy of any country that has a market type of economy is cyclical.
Thus, the economic cycle is the recurring fluctuations of various economic indicators, which generally give a specific frequency and speak of economic activity in a particular period. Sometimes this period is called "business".
The economic cycle can characterize the economy of a single production, city, country or selected regions of the world.
It is rather difficult to predict in which direction (progress or regression) it will go, since many different factors influence this. Fluctuations tend to be irregular.
Stages of the business cycle
There is such a thing as the duration of the cycle in the economy. This term explains the period of time between two identical phases (stages) of the economic activity of an economic entity.
Four basic stages form a complete cycle.
So, the first stage of the economic cycle will be the rise. It is characterized by the revival of all processes. If we are talking about the national economy, then in this phase the inflation rate is low, the consumer tends to make purchases that were postponed during the crisis.
The second phase is the peak. During the first phase, rapid growth is observed and the peak characterizes the highest degree of business activity. For the national economy, indicators of the peak of economic activity will be a low level of unemployment, the most efficient operation of enterprises, business is growing and increasing its capital through lending. A peak is immediately followed by a decline.
Third phase - recession. This is the stage at which the economy is experiencing a decline in activity, a recession. The volumes of production of goods and services are decreasing, the level of investment is falling. In view of these factors, the unemployment rate begins to rise, the volume of goods for which there is no demand is growing, prices are falling, which is why household incomes are falling, and demand continues to decline. A long and protracted period of economic recession is called a depression.
The fourth stage is the bottom. The bottom is the lowest point of economic activity. At this stage the levelunemployment is the highest, the level of production is low. There is a consumption of excess goods that were produced in previous periods. Prices no longer fall, the volume of production gradually begins to increase. This phase, as a rule, is fleeting, followed by a rise again. But there is an example in history when the bottom in the economy dragged on for 10 years (the Great Depression in 1929-1939).
Types of business cycles
In the scientific literature, there is an approved classification according to their duration and frequency. In general, it is worth noting that the types of economic cycles have more than 1380 units.
Let's consider the most popular classification:
- Short-term cycles by Joseph Kitchin. Duration - from 2 to 4 years. The scientist explained this by the fact that the world's gold reserves are changing all the time. This was true in the 20s of the 20th century. Today, scientists explain such a short duration of the economic cycle by the presence of time delays (lags) in obtaining the data necessary for commercial activities by industries. An example is the saturation of the market with a certain product. Production receives this information late, which is why there is an overproduction of goods and a surplus of it in warehouses.
- Mid-term cycle of Clément Juglar. The duration of the cycle is from 7 to 10 years. These cycles were discovered by a French economist. The increase in cycle time is explained not only by time lags with production information, but also by delays in investmentsolutions. Since the level of workload of the enterprise and the volume of goods fluctuate, Juglar supplemented the theory with the fact that the volume of investments in the fixed capital of the enterprise also fluctuates, which, accordingly, increases the lag period.
- Simon Kuznets cycle (rhythms). An American Nobel Prize-winning economist discovered these cycles in 1930. According to his life cycle model, the duration of the period is 15-20 years. The explanation for the duration of the cycle lay in the influence of demographic processes (a constant influx of immigrants), as well as in changes in the construction industry. In view of this, Kuznets's rhythms are also called "demographic" or "construction" cycles. Today, Blacksmith cycles are seen more as "technological" because they are directly related to constant innovation in the technological field.
- Long cycles of Nikolai Kondratiev (from 40 to 60 years). They were also opened in the 20s of the 20th century. They are called K-waves, or K-cycles. Associated with important inventions such as the steam engine, railroad, electricity, internal combustion engine, computer technology, and more. Also, serious changes in the structure of production of goods can have an impact on the period of the cycle.
You can also select even longer types of cycles, such as:
- Forrester cycle. The duration of such a period is 200 years and is explained by the fact that materials are changing in production, as well as energy sources.
- Toffler cycle. According to this life cycle model, the duration of the period is1-2 thousand years. The scientist explains such a cycle by the constant development of civilization and the introduction of new developments of scientists both in theory and in practice.
The life cycle of an organization
What does this term describe? This is a complex of certain phases of the development of an enterprise during its existence.
The main stages of the life cycle of an organization are:
- Becoming. At this phase, the product life cycle is formed (more on this later), the goals of the organization, the search for partners and the preparation of ideas for implementation, the recruitment of specially trained personnel, as well as the release of the first trial batch of goods. At this stage, the manager forms a strategy for the enterprise - power (large capacities), adaptive (individual consumer needs) or niche (advantage over other enterprises in a certain area of production of goods and services). The duration of the production cycle is calculated
- The second stage is growth. At this stage, the enterprise develops, management improves, the staff increases, various systems for stimulating and standardizing the work performed are introduced in order to increase the efficiency of labor and production. It also analyzes the relationship of the organization with the external environment, the coordination of its goals and priorities.
- Maturity. At this stage of the organization's life cycle, the company's growth stabilizes. During this period, the company reaches the position of a leader in the market, continues to expand its range, improvesorganization structure. If a company has reached the stage of maturity, then it is able to maintain a stable position in the market and is able to set an example for younger organizations.
- The last stage of the life cycle is decline. At this stage, there is a drop in demand for products, a decrease in profits. Stronger competitors appear on the market, or the need for manufactured products simply disappears. The knowledge and experience accumulated over the years of the company's existence can no longer be properly integrated into the company's system of ideas. Why is now the experience gained is not fixed.
Product life cycle
This, in turn, is the duration of demand for a particular product in the market. These are marketing researches which are directed mainly to the consumer market. The basis for this is an understanding of the essence of the life cycle - everything has its own life on the market, and sooner or later, a new, better or cheaper product comes to replace one product.
As in the case of organizations, there is such a thing as the stages of the product life cycle. There are four in total:
- Introduction stage. At this stage, the company develops a market for a new product, considers the future demand for a particular product. As a rule, at this time there is a low growth in sales, losses are possible. Market research costs are minimal and the level of competition is rather limited.
- Growth stage. In this phase, one can observe a rapid increase in demand for products. Increasing sales and profits of the companymanufacturer. If demand starts to fall, the goods accumulate in warehouses, as they are filled, the price of this product begins to fall in order to sell it as soon as possible.
- The stage of maturity and saturation. Most of those who want to purchase a product have already done so, so the growth in demand is no longer so rapid, interest in the product is disappearing. As a result, the level of demand peaks and falls, settling at a specific point.
- Declining stage. When there is a steady decline in demand on the market, income from the sale of goods and the volume of its sale, it means that the organization is at the stage of the product life cycle "decline". In this case, firms are offered four options for getting out of the situation: improving the marketing program, updating the design of the product, changing its position in the market, or canceling the production of a particular product.
Production cycle
This is a set of actions with tangible current assets (mobile assets of the enterprise - assets in which money is invested and which can be turned back into cash during the cycle). That is, the production cycle is the period of time between the purchase of materials for production and the release of the finished product.
The duration of the production cycle at each enterprise is different. It all depends on the complexity of the manufacturing process, the supply of materials, equipment and much more.
In order to calculate the cycle, you will need the following data:
- duration of technologicalloop;
- total time of breaks (both for organizational and technical reasons, and a break according to the company's work schedule);
- time of natural processes.
At the same time, the duration of the technological period is the time during which a person directly or indirectly affects the objects of labor (materials for the manufacture of goods). That is, for the direct manufacture of products (manufacturing cycle). It is also important to take into account only those time costs that do not go in parallel with the technological cycle. Thus, adding up all the above periods of time, we get the duration of the production cycle.
Operating cycle
This is a broader concept, because, in addition to the production cycle, it also includes the time of payment for the finished product. If the company operates on a prepaid basis, then the end of the operating cycle will be the moment of shipment of the goods, and not its payment.
Of course, the duration of the operating cycle will also be longer than the production cycle. It is worth noting that the shorter the cycles in the organization, the more risky its activities will be, and the degree of provision with current assets is lower. At the same time, if the cycles are too long, the more costly the company will be due to the constant need for additional sources of financing.
It is easy to calculate the operating cycle of an enterprise. It is enough to know the following parameters:
- duration of the production cycle;
- maturities of receivables (RD);
The sum of the period of the production cycle and the maturity of the DZ will be the duration of the operating cycle of the enterprise.
In order to calculate the maturity of accounts receivable, it is necessary to divide its volume - without advances issued - by revenue (net). The amount received must be multiplied by 365 days.
Other types of cycles
Life is a sequence of stages of development through which each species of living organisms passes in the process of ontogenesis.
The historical cycle is a certain circle of historical sciences that study the events of the past; some historians believe that everything is cyclical, in the same way, in history one can trace the presence of a certain cyclical nature of events.
A cycle in programming is a certain sequence of repeated actions. It is part of the code of a specific program that performs a task. For example, in order for the written program to count from 1 to 1000, it is necessary to write a loop for it, which it will repeat.
Mathematical is a closed route along the vertices of a graph (a set of vertices and lines that are connected to each other in whole or in part), which is essentially a chain.
Thermodynamic cycle is a sequence of thermodynamic processes resulting in the conversion of heat into work (Carnot cycle).
Menstrual is a period of time when a woman's reproductive system changes and prepares for a possible pregnancy. Repeats every month.
The demographic cycle is the process of reproduction of labor resources (from an economic point of view).
Musical is a collection of independent works united by one idea. For example, the cycle "The Seasons", which is described by three composers at once - Antonio Vivaldi, Pyotr Ilyich Tchaikovsky and Astor Piazzolla.
A cycle of stories is also a collection of essays united by one idea. Also called the "literary" cycle.
The cycle of a machine is the amount of time the machine repeats the same operation, including the time of auxiliary operations.
The lunar cycle is the period during which the Moon goes through all its phases and returns to the original “new moon” phase.
