A STRATEGIC AGRICULTURAL PRODUCTION MODEL WITH RISK AND RETURN CONSIDERATIONS

Decision support systems are generally geared to short-term tactical decision making. As an alternative, this paper develops a mathematical programming model to evaluate long-term strategic alternatives in the context of farm-level agricultural production where a broiler farm considers long-term implications of diversification into commercial aquaculture. The model considers a ten-year strategic planning horizon, incorporates financial risk and return considerations, and accommodates capacity variations. Results indicate that a diversification strategy significantly increases farm profitability over a strategic planning horizon while simultaneously maintaining financial risk below a predetermined tolerance level and return on investment above a predetermined level.


Issue Date:
1994-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/31312
Published in:
Agricultural and Resource Economics Review, Volume 23, Number 1
Page range:
37-46
Total Pages:
10




 Record created 2017-04-01, last modified 2017-08-16

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