Controlling the Risk for an Agricultural Harvest
Gathering the harvest represents a complex managerial problem for agricultural cooperatives involved in harvesting and processing operations: balancing the risk of overinvestment with the risk of underproduction. The rate to harvest crops and the corresponding capital investment are critical strategic decisions in situations where poor weather conditions present a risk of crop loss. In this article, we discuss a case study of the Concord grape harvest and develop a mathematical model to control harvest risk. The model involves differentiation of a joint probability distribution that represents risks associated with the length of the harvest season and the size of the crop. This approach is becoming popular as a means of dealing with complex problems involving operational and supply chain risk. Significant cost avoidance, in the millions of dollars, results from practical implementation of the Harvest Model. Using real data, we found that the Harvest Model provides lower-cost solutions in situations involving moderate variability in both the length of season and the crop size as compared to solutions based on imposed risk policies determined by management.
Volume (Year): 6 (2004)
Issue (Month): 3 (July)
|Contact details of provider:|| Postal: |
Web page: http://www.informs.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:inm:ormsom:v:6:y:2004:i:3:p:225-236. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.