IDEAS home Printed from https://ideas.repec.org/a/caa/jnlage/v62y2016i12id238-2015-agricecon.html
   My bibliography  Save this article

Optimal allocation of production resources under uncertainty: Application of the muliticriteria approach

Author

Listed:
  • Jaka ZGAJNAR

    (University of Ljubljana, Biotechnical Faculty, Ljubljana, Slovenia)

  • Stane KAVCIC

    (University of Ljubljana, Biotechnical Faculty, Ljubljana, Slovenia)

Abstract

Analysing economic efficiency of farm production always faces a problem of insufficient information. This is particularly true when the analysis is performed on the reference farm where estimates are based on the average aggregated data. The paper illustrates how the combination of different mathematical programming methods could be efficiently used to analyse the farm-production plan with the lack of the on-farm accounting data. The utilised approach shows how the holistic analysis of production planning as a multi-criteria problem could be conducted. The estimation of the missing information and the disaggregation of the endogenous farm data is enabled through different models that are based on the constrained optimisation. The developed models are linked into the spreadsheet modular tool enabling systematic analyses of the farm decision making under risky conditions. Illustration of the modular tool application is given via the analyses of three hypothetic dairy farms. The obtained results indicate that the developed approach enables holistic analyses of the production planning. The methodology applied provides also important information for the measures aimed to increase efficiency as well as to benchmarking the performance of different farm types. The results point to a discrepancy between the solutions obtained through different objective functions and shows the advantage of the multi-criteria approach.

Suggested Citation

  • Jaka ZGAJNAR & Stane KAVCIC, 2016. "Optimal allocation of production resources under uncertainty: Application of the muliticriteria approach," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(12), pages 556-565.
    • Handle: RePEc:caa:jnlage:v:62:y:2016:i:12:id:238-2015-agricecon
    DOI: 10.17221/238/2015-AGRICECON
    as

    Download full text from publisher

    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/238/2015-AGRICECON.html
    Download Restriction: free of charge
    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/238/2015-AGRICECON.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.17221/238/2015-AGRICECON?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rehman, Tahir & Romero, Carlos, 1984. "Multiple-criteria decision-making techniques and their role in livestock ration formulation," Agricultural Systems, Elsevier, vol. 15(1), pages 23-49.
    2. M. Ortuño & B. Vitoriano, 2011. "A goal programming approach for farm planning with resources dimensionality," Annals of Operations Research, Springer, vol. 190(1), pages 181-199, October.
    3. Rehman, Tahir & Romero, Carlos, 1987. "Goal programming with penalty functions and livestock ration formulation," Agricultural Systems, Elsevier, vol. 23(2), pages 117-132.
    4. John M. Antle, 1987. "Econometric Estimation of Producers' Risk Attitudes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(3), pages 509-522.
    5. Tamiz, Mehrdad & Jones, Dylan & Romero, Carlos, 1998. "Goal programming for decision making: An overview of the current state-of-the-art," European Journal of Operational Research, Elsevier, vol. 111(3), pages 569-581, December.
    6. Gomez-Limon, Jose A. & Arriaza, Manuel & Riesgo, Laura, 2003. "An MCDM analysis of agricultural risk aversion," European Journal of Operational Research, Elsevier, vol. 151(3), pages 569-585, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zgajnar, Jaka & Kavcic, Stane, 2011. "Weighted Goal Programming and Penalty Functions: Whole-farm Planning Approach Under Risk," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 118033, European Association of Agricultural Economists.
    2. Babic, Zoran & Peric, Tunjo, 2011. "Optimization of livestock feed blend by use of goal programming," International Journal of Production Economics, Elsevier, vol. 130(2), pages 218-223, April.
    3. J. Žgajnar & L. Juvančič & S. Kavčič, 2009. "Combination of linear and weighted goal programming with penalty function in optimisation of a daily dairy cow ration," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 55(10), pages 492-500.
    4. Stelios Rozakis & Alexandra Sintori & Konstantinos Tsiboukas, 2009. "Utility-derived Supply Function of Sheep Milk: The Case of Etoloakarnania, Greece," Working Papers 2009-11, Agricultural University of Athens, Department Of Agricultural Economics.
    5. Bardsley, Peter & Burfurd, Ingrid, 2013. "Auctioning contracts for environmental services," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 1-20.
    6. Şeyda Gür & Tamer Eren, 2018. "Scheduling and Planning in Service Systems with Goal Programming: Literature Review," Mathematics, MDPI, vol. 6(11), pages 1-16, November.
    7. Rosshairy Abd. Rahman & Graham Kendall & Razamin Ramli & Zainoddin Jamari & Ku Ruhana Ku-Mahamud, 2017. "Shrimp Feed Formulation via Evolutionary Algorithm with Power Heuristics for Handling Constraints," Complexity, Hindawi, vol. 2017, pages 1-12, November.
    8. Jorge Dante de Prada & Tsoung-Chao Lee & Ariel Ricardo Angeli & José Manuel Cisneros & Alberto Cantero G., 2008. "Análisis multicriterio de la conservación de suelo: Aplicación a una cuenca representativa del centro argentino," Revista Iberoamericana de Economía Ecológica, Red Iberoamericana de Economía Ecológica, vol. 9, pages 45-59, Diciembre.
    9. Andrés Weintraub & Carlos Romero, 2006. "Operations Research Models and the Management of Agricultural and Forestry Resources: A Review and Comparison," Interfaces, INFORMS, vol. 36(5), pages 446-457, October.
    10. Park, Timothy A. & Antonovitz, Frances, 1991. "Econometric Tests Of Firm Decision Making Under Uncertainty: Optimal Output And Hedging Decisions," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271264, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Sauer, Johannes & Zilberman, David, 2009. "Innovation Behaviour At Farm Level – Selection And Identification," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51073, Agricultural Economics Society.
    12. Martina Bozzola & Robert Finger, 2021. "Stability of risk attitude, agricultural policies and production shocks: evidence from Italy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(3), pages 477-501.
    13. María Bielza & Alberto Garrido & José M. Sumpsi, 2004. "Revenue insurance as an income stabilization policy: an application to the Spanish olive oil sector," Post-Print hal-01201063, HAL.
    14. Z. Bar‐Shira & R.E. Just & D. Zilberman, 1997. "Estimation of farmers' risk attitude: an econometric approach," Agricultural Economics, International Association of Agricultural Economists, vol. 17(2-3), pages 211-222, December.
    15. Francisco J. André & Laura Riesgo, 2006. "A Duality Procedure to Elicit Nonlinear Multiattribute Utility Functions," Working Papers 06.02, Universidad Pablo de Olavide, Department of Economics.
    16. CARPENTIER, Alain & GOHIN, Alexandre & SCKOKAI, Paolo & THOMAS, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(1), March.
    17. Lyman, Nathaniel & Nalley, Lawton Lanier, 2013. "Stochastic Valuation of Hybrid Rice Technology in Arkansas," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142505, Southern Agricultural Economics Association.
    18. Zhang, Hongliang & Antle, John, 2016. "Assessing Climate Vulnerability of Agricultural Systems Using High-order moments: A Case Study in the U.S. Pacific Northwest," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236233, Agricultural and Applied Economics Association.
    19. Travis J. Lybbert & David R. Just, 2007. "Is Risk Aversion Really Correlated with Wealth? How Estimated Probabilities Introduce Spurious Correlation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 964-979.
    20. Rajiv Seth & Valeed A. Ansari & Manipadma Datta, 2008. "Hedging Rainfall Risk by Farmers Growing Soyabean in Jhalawar District," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 2(2), pages 199-212, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:caa:jnlage:v:62:y:2016:i:12:id:238-2015-agricecon. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ivo Andrle (email available below). General contact details of provider: https://www.cazv.cz/en/home/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.