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An Application of Safety-First Probability Limits in a Discrete Stochastic Farm Management Programming Model

Published online by Cambridge University Press:  05 September 2016

Upton Hatch ,
Joseph Atwood  and
James Segar
Upton Hatch
Affiliation:
Department of Agricultural Economics and Rural Sociology, Auburn University
Joseph Atwood
Affiliation:
Department of Agricultural Economics and Economics, Montana State University
James Segar
Affiliation:
Pacific Fishery Management Council, Portland, Oregon
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Abstract

A sequential decision-making model was developed, and data from farm-raised catfish production were used to demonstrate its use. Outcomes of sequences of decisions which satisfied chance constraints on ending cash balances were traced through a specified time period. Discrete choice variables were specified due to the fixed nature of pond facilities. Recourse actions specified were sale of production in excess of endogenously determined transfer levels or purchase of inputs to supplement needs of the next production stage. Production activities cannot be changed during the planning period. Only yield variability was considered due to its impact on relative competitiveness among growth stages. Deviations were calculated from endogenously determined target levels based on goal and probability limits.

Keywords

chance constraintsdiscrete stochastic programminglimited recourse
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 21 , Issue 1 , July 1989 , pp. 65 - 72
Copyright
Copyright © Southern Agricultural Economics Association 1989

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