Enhancing Decision Support through Calculating Utility Weighted Contract Prices
| Autor: | Bennie Grove, D.B. Strydom |
|---|---|
| Rok vydání: | 2015 |
| Předmět: |
Decision support system
Actuarial science Ecology Risk aversion Cumulative distribution function media_common.quotation_subject Influencer marketing Yield risk Econometrics Economics Production (economics) Animal Science and Zoology Function (engineering) Agronomy and Crop Science media_common Communication channel |
| Zdroj: | Outlook on Agriculture. 44:187-194 |
| ISSN: | 2043-6866 0030-7270 |
| DOI: | 10.5367/oa.2015.0211 |
| Popis: | Worldwide, table (fresh) and processing potatoes represent major marketing channels. In South Africa, uncertainties influence marketing and production decisions. Producers need to decide on the channel most suited to their needs based on its characteristics. A decision support system (DSS) developed in this study provides producers with relevant price-related information. It evaluates gross production values (GPVs), risk quantifications and utility weighted premiums for both channels. The processing market had the highest GPV in a cumulative distribution function. For South Africa, the processing market had the highest probability of better price based on price and yield risk. Stochastic efficiency with respect to a function (SERF) was used to calculate a utility break-even price, incorporating different risk aversion levels. A utility break-even price of R1,618/ton creates indifference between the two channels for a neutral risk-averse producer. The DSS provides a valuable tool for producers and processors and may be replicated for other commodities and global markets with similar challenges. |
| Databáze: | OpenAIRE |
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