Stochastic Optimization: An Application to Sub-Arctic Dairy Farming
The paper demonstrates how a deterministic farm linear programming (LP) model can be made stochastic and simulated using Solver and Simetar© in Excel©. The demonstration is conducted with an LP-model for a dairy farm for a sub arctic region of Norway. The income risks arising from variation in milk...
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ftagecon:oai:ageconsearch.umn.edu:24253 2023-05-15T14:54:04+02:00 Stochastic Optimization: An Application to Sub-Arctic Dairy Farming Asheim, Leif Jarle Richardson, James W. Schumann, Keith D. Feldman, Paul A. 2005 8 application/pdf http://purl.umn.edu/24253 English en eng AgEcon Search International Farm Management Association>15th Congress, Campinas SP, Brazil, August 14-19, 2005 Conference Paper 23487 http://purl.umn.edu/24253 dairy production Northern Norway stochastic optimization stochastic simulation yield risks Livestock Production/Industries Conference Paper or Presentation 2005 ftagecon 2012-09-12T16:25:58Z The paper demonstrates how a deterministic farm linear programming (LP) model can be made stochastic and simulated using Solver and Simetar© in Excel©. The demonstration is conducted with an LP-model for a dairy farm for a sub arctic region of Norway. The income risks arising from variation in milk and crop yields due to winter damage in leys and pastures have been quantified for farms demonstrating low, medium and high forage yield risk. The estimated distribution of farm profit will be skewed to the left, indicating a downside risk. In the presence of risks, farmers maximize income by producing the milk quota with using surplus forage for meat production. The analysis demonstrated here may assist farmers and farm managers in improving sensitivity analysis for risky variables in farm LP models. Conference Object Arctic Northern Norway AgEcon Search - Research in Agricultural & Applied Economics Arctic Norway |
institution |
Open Polar |
collection |
AgEcon Search - Research in Agricultural & Applied Economics |
op_collection_id |
ftagecon |
language |
English |
topic |
dairy production Northern Norway stochastic optimization stochastic simulation yield risks Livestock Production/Industries |
spellingShingle |
dairy production Northern Norway stochastic optimization stochastic simulation yield risks Livestock Production/Industries Asheim, Leif Jarle Richardson, James W. Schumann, Keith D. Feldman, Paul A. Stochastic Optimization: An Application to Sub-Arctic Dairy Farming |
topic_facet |
dairy production Northern Norway stochastic optimization stochastic simulation yield risks Livestock Production/Industries |
description |
The paper demonstrates how a deterministic farm linear programming (LP) model can be made stochastic and simulated using Solver and Simetar© in Excel©. The demonstration is conducted with an LP-model for a dairy farm for a sub arctic region of Norway. The income risks arising from variation in milk and crop yields due to winter damage in leys and pastures have been quantified for farms demonstrating low, medium and high forage yield risk. The estimated distribution of farm profit will be skewed to the left, indicating a downside risk. In the presence of risks, farmers maximize income by producing the milk quota with using surplus forage for meat production. The analysis demonstrated here may assist farmers and farm managers in improving sensitivity analysis for risky variables in farm LP models. |
format |
Conference Object |
author |
Asheim, Leif Jarle Richardson, James W. Schumann, Keith D. Feldman, Paul A. |
author_facet |
Asheim, Leif Jarle Richardson, James W. Schumann, Keith D. Feldman, Paul A. |
author_sort |
Asheim, Leif Jarle |
title |
Stochastic Optimization: An Application to Sub-Arctic Dairy Farming |
title_short |
Stochastic Optimization: An Application to Sub-Arctic Dairy Farming |
title_full |
Stochastic Optimization: An Application to Sub-Arctic Dairy Farming |
title_fullStr |
Stochastic Optimization: An Application to Sub-Arctic Dairy Farming |
title_full_unstemmed |
Stochastic Optimization: An Application to Sub-Arctic Dairy Farming |
title_sort |
stochastic optimization: an application to sub-arctic dairy farming |
publisher |
AgEcon Search |
publishDate |
2005 |
url |
http://purl.umn.edu/24253 |
geographic |
Arctic Norway |
geographic_facet |
Arctic Norway |
genre |
Arctic Northern Norway |
genre_facet |
Arctic Northern Norway |
op_relation |
International Farm Management Association>15th Congress, Campinas SP, Brazil, August 14-19, 2005 Conference Paper 23487 http://purl.umn.edu/24253 |
_version_ |
1766325750178250752 |