AN ALTERNATIVE SOLUTION TO LINEAR PROGRAMMING PROBLEMS WITH STOCHASTIC INPUT-OUTPUT COEFFICIENTS

Deriving acceptable farm plans where input-output coefficients are stochastic is a complex problem. Previous formulations have required many simplifying assumptions about the stochastic variables in the analysis. This paper presents an alternative approach based on the mean absolute deviation, which permits solution by a conventional linear programming algorithm whilst avoiding some of those assumptions previously required. The formulation also incorporates a stochastic objective function. Examples are provided using the situation of stochastic feed supply with reference to representative sheep-grain farms on the Northern Tablelands of New South Wales. Results from these suggest that this alternative approach is a distinct improvement on earlier stochastic formulations which utilize linear programming algorithms.


Issue Date:
1978-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/22495
Published in:
Australian Journal of Agricultural Economics, Volume 22, Number 1
Page range:
22-40
Total Pages:
19




 Record created 2017-04-01, last modified 2017-08-24

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