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A Strategic Agricultural Production Model with Risk and Return Considerations

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Author Info
Rhonda L. Aull-Hyde (University of Delaware)
Solomon Tadesse (University of Maryland)

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Abstract

Decision support systems are generally geared to short-term tactical decision makkrg. As an alternative, this paper develops a mathematical progrming 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 aquiculture. 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

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File URL: http://agecon.lib.umn.edu/cgi-bin/pdf_view.pl?paperid=5927&ftype=.pdf
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Publisher Info
Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 23 (1994)
Issue (Month): 1 (April)
Pages: 38-46
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Handle: RePEc:agl:nearer:v:23:y:1994:i:1:p:38-46

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