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An Empirical Approach for Optimizing the Production Structure of a Farm Using the Linear Programming Model

Author

Listed:
  • Leonida Emilia BACIU

    (Babes-Bolyai University of Cluj-Napoca, Faculty of Economics and Business Administration, Cluj-Napoca, Romania)

  • Vincentiu VERES

    (Babes-Bolyai University of Cluj-Napoca, Faculty of Economics and Business Administration, Cluj-Napoca, Romania)

  • Maria MORTAN

    (Babes-Bolyai University of Cluj-Napoca, Faculty of Economics and Business Administration, Cluj-Napoca, Romania)

  • Angela-Eliza MICU

    (Ovidius University of Constanta, Romania)

Abstract

The production structure of farms has a great importance in the context of Romania where there are many mixed farms and most of them have problems of economic viability. Optimization of the production structure is essential in ensuring the viability of farms therefore our study focuses on applying the model of linear programming for the optimization of the production structure. The model was applied to a case study where the optimization was performed from different perspectives by using various economic indicators such as the standard output, gross margin, profit per hectare and production costs. The results have shown that the optimal structure differs depending on the farms’ medium and long-term objectives. As a result of the analysis for the proposed scenarios, to increase the efficiency, the use of the category of youth under 1 year old must be abandoned and the cattle for meat category should be developed. Gross margin was found to be the most suitable indicator depending on which the optimal production structure should be modeled.

Suggested Citation

  • Leonida Emilia BACIU & Vincentiu VERES & Maria MORTAN & Angela-Eliza MICU, 2023. "An Empirical Approach for Optimizing the Production Structure of a Farm Using the Linear Programming Model," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 87-94.
    • Handle: RePEc:ddj:fseeai:y:2023:i:3:p:87-94
    DOI: 10.35219/eai15840409366
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    References listed on IDEAS

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    1. A. Victor Cabot & S. Selcuk Erenguc, 1986. "A branch and bound algorithm for solving a class of nonlinear integer programming problems," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 33(4), pages 559-567, November.
    2. Boray Huang & Andy Wu & David Chiang, 2018. "Supporting small suppliers through buyer-backed purchase order financing," International Journal of Production Research, Taylor & Francis Journals, vol. 56(18), pages 6066-6089, September.
    3. Maria MORTAN & Vincenţiu VEREŞ & Leonina BACIU & Patricia RAŢIU, 2018. "Family farms from Romania Nord Vest Region in the context of the rural sustainable development," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 10(1), pages 111-128, April.
    4. Agerie Nega Wassihun & Tigabu Dagnew Koye & Abebe Dagnew Koye, 2019. "Analysis of technical efficiency of potato (Solanum tuberosum L.) production in Chilga District, Amhara National Regional State, Ethiopia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-18, December.
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