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Procurement Strategies to Improve Quality Consistency in Wheat Shipments

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  • Wilson, William W.
  • Dahl, Bruce L.

Abstract

Consistency of functional characteristics in wheat is a concern confronting buyers and sellers. This research analyzes the cost and risk of different procurement strategies for importers. A stochastic simulation model is used to determine the probability of functional characteristics being satisfied subject to quality targets and costs for alternative purchase strategies. Stochastic efficiency was employed to identify purchase strategies that dominate others and to determine the extent of preference. As more specific characteristics are incorporated into a contract, results indicate that the probabilities of meeting end-use requirements increase

Suggested Citation

  • Wilson, William W. & Dahl, Bruce L., 2008. "Procurement Strategies to Improve Quality Consistency in Wheat Shipments," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(1), pages 1-17, April.
    • Handle: RePEc:ags:jlaare:36708
    DOI: 10.22004/ag.econ.36708
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    References listed on IDEAS

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    1. Babcock, Bruce A. & Choi, E. Kwan & Feinerman, Eli, 1993. "Risk And Probability Premiums For Cara Utility Functions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(1), pages 1-8, July.
    2. Bruce L. Dahl & William W. Wilson & D. Demcey Johnson, 2004. "Valuing New Varieties: Trade-Offs between Growers and End-Users in Wheat," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(1), pages 82-96.
    3. Dahl, Bruce L. & Wilson, William W., 1998. "Consistency Of Quality Characteristics In Hard Red Spring Wheats; Summary," Agricultural Economics Reports 23305, North Dakota State University, Department of Agribusiness and Applied Economics.
    4. Bruce A. Babcock & David A. Hennessy, 1996. "Input Demand under Yield and Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 416-427.
    5. Dahl, Bruce L. & Wilson, William W., 1998. "Consistency Of Quality Characteristics In Hard Red Spring Wheats," Agricultural Economics Reports 23455, North Dakota State University, Department of Agribusiness and Applied Economics.
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    Cited by:

    1. William W. Wilson & Bruce Dahl, 2014. "Contracting for Canola in the Great Plains States," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(1), pages 89-106, March.
    2. Johnson, Rutherford Cd., 2016. "A Probabilistic Demand Application In The American Cracker Market," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(3), pages 1-13, July.
    3. William W. Wilson & Wesley Wilson & Bruce Dahl, 2009. "Protein and the demand for hard wheats ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), pages 285-303, April.
    4. William, Wilson & Dahl, Bruce & Hertsgaard, David, 2020. "Soybean quality differentials, blending, testing and spatial arbitrage," Journal of Commodity Markets, Elsevier, vol. 18(C).
    5. Prithviraj Lakkakula & David W. Bullock & William W. Wilson, 2022. "Asymmetric information and blockchains in soybean commodity markets," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 273-298, March.
    6. Ge, Houtian & Nolan, James & Gray, Richard & Goetz, Stephan & Han, Yicheol, 2016. "Supply chain complexity and risk mitigation – A hybrid optimization–simulation model," International Journal of Production Economics, Elsevier, vol. 179(C), pages 228-238.

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