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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ftrepec:oai:RePEc:ags:ifma05:24253 2024-04-14T08:06:57+00:00 Stochastic Optimization: An Application to Sub-Arctic Dairy Farming Asheim, Leif Jarle Richardson, James W. Schumann, Keith D. Feldman, Paul A. https://ageconsearch.umn.edu/record/24253/files/cp05as01.pdf unknown https://ageconsearch.umn.edu/record/24253/files/cp05as01.pdf preprint ftrepec 2024-03-19T10:38:50Z 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. Livestock Production/Industries Report Arctic RePEc (Research Papers in Economics) Arctic Norway |
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RePEc (Research Papers in Economics) |
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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. Livestock Production/Industries |
format |
Report |
author |
Asheim, Leif Jarle Richardson, James W. Schumann, Keith D. Feldman, Paul A. |
spellingShingle |
Asheim, Leif Jarle Richardson, James W. Schumann, Keith D. Feldman, Paul A. Stochastic Optimization: An Application to Sub-Arctic Dairy Farming |
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 |
url |
https://ageconsearch.umn.edu/record/24253/files/cp05as01.pdf |
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Arctic Norway |
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Arctic Norway |
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Arctic |
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Arctic |
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https://ageconsearch.umn.edu/record/24253/files/cp05as01.pdf |
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1796304168506359808 |